Why Traders Fail To Win?

Opportunity is missed by most people because it is dressed in overalls and looks like work.

– Thomas Edison

The markets are shifting, there is movement coming back in, more people are entering into the fray and getting active. This should all add up to greater potential for profit taking, right? Indeed many traders are entering back into a period of seeing more profitable trades going their way but still some are still incapable of finding that winning strategy or executing the profitable trade. How can that be?

First of all there is lack of experience as it takes more than just random stock selection based on a whim to identify true opportunities. There are skills to be mastered and techniques that take a while to fully grasp and be able to apply.

So whilst it might be possible to make a few profitable trades, initially the majority of trades will be losers. What is important is that the trader examines why they failed to get it right and adjust their strategy accordingly. In this way over time, the profitable trades will start to outweigh the losses and the trader will enter into the realms of ‘experienced’ and in a stronger position for understanding market movements and opportunities.

This learning process though takes time, far more than most novices appreciate and therefore they don’t invest enough time and effort. Equally, the majority of traders are convinced they have greater skills than their trading results would show, so don’t put in near enough effort to reviewing, investigating, analysing etc.

No doubt they would argue that they do but one thing is certain, the successful trader is putting in far more effort and spending their time efficiently as they have the benefit of more experience and have done this process many times over. So they can dispassionately analyse their positions, their trades and read reports far faster as they know where to look.

They then apply the new perspective or certainty that they have gained and adjust their trading plan accordingly and move on. All extremely valuable for the novice to remember and take on board as it verifies that much of trading is about putting in effort and that it takes time to get the skills but that effort will deliver a pay off if you are just patient enough.

Another potential issue is ironically fear of success, so the trader sets themself up to fail. An odd notion and in reality in our review indicated that only 10% of traders asked stated that they felt that if they were successful as a trader, their life would change in an adverse way.

While only 12% said that others would take advantage of them if they made significant profits. However what was important was that those who had a fear of what success would bring were stressed by trading and felt disappointed by it all. It could be that these people believe that money is the root of all evil or that they haven’t earned the rights to making profits for some reason or other. Whatever the cause the result is the same as if you are fearful of success you will subconsciously ensure you avoid it no matter what the market conditions are.

Finally a classic error by traders is to keep going when they are physically and or emotionally tired. We all know we are prone to errors when worn out and even if you are on the winning side of a trade you need to ensure that you are on top of it as otherwise it might well turn against you without you noticing.

The fact is that the rollercoaster of trading and emotional cost add up and can be exhausting. Therefore it is essential to take time out, to rest, to relax, to rejuvenate, to eat properly, to take breaks during the trading day etc. Without these recuperation periods the inevitable outcome is errors and lack of focus. You become your own worst enemy and set yourself up to fail.

So there are several things that can get in the way of success. All of them are identifiable and controllable as long as you have the desire to put yourself on the winning side. Get committed, plan, review, analyse, and put in the effort and then balance it out with rest. If you are one of those who truly fear the success of trading, then possibly the best option is to acknowledge that and opt out.

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