Why traders lose. Because it is the HARDEST job in the world

Don’t be fooled

Trading educators like the Online Trading Academy sell you the retail traders’ “job” as a dream come true. You might have been led to believe by an educator or a successful trade that “I can do this“.

But can you really afford to take on the risk? Do not be fooled! There is a reason why traders lose.

Let me manage your expectations…

Trading is about hard work

Like anything that you want to succeed in, it takes a minimum of 10,000 hours to merely get good at. Then you need to be lucky enough to find your edge (more on that here)

In trading, being good at it does not suffice. You probably know that at least an estimated 90% of traders lose money, 5% somewhat break even and 5% take them money of the first 90%… That is why you have to be amazing at it – and 20,000 – 30,000 hours is probably more the minimum to be able to survive in the market. That is roughly the equivalent of 6-9 years in a full time job just to learn to swim or survive. Now, of course everyone is different, but we also know that talent is overrated.

There is no correlation between hard work and results in trading. You can put on a “lucky” trade and make a lot of money with no effort.

The problem is that this will program you wrong and you will believe that you can so easily make money. This will make you put on poor trades, manage them emotionally and ultimately lose all your gains and more.

The so-called “lucky” trade will turn out to be a “bad-luck” trade in the long run.

Early in my trading I used to get up early, do my analysis and site in front of my screen trying to “work hard” and wait for a trade. Guess what: I forced the trading, took poor trades and lost money doing this.

Trading is about survival

You can only get your 20,000 hours experience by trading: analysing, journalling, backtesting, forward-testing, learning software, managing your IT.. and most importantly managing yourself (more of that later).. and that means managing your losses and the pain associated with them.

Trading is a high risk career. You become a “professional risk manager”.

 

Trading is about psychology

managing yourself (more of that later).. and that means managing your losses and the pain associated with them. Someone told me that you first need a “PhD in Losses” and that is just the start.

You need to learn to understand the four trading fears, control yourself emotionally and be at peace with your losses. You must let go of your ego and understand that the market does not reject you or is out to hurt you, but purely works on probabilities.

 

In summary ask yourself:

  • Do you have 6-9 years to learn to swim and still lose in the long run?
  • What about your family, kids and your own retirement? Remember, leverage means you can lose everything very quickly – it just takes one moment of weakness to create irreparable damage!
  • Can you afford to take on this low probability scenario?

So how long is it going to take?

When I started trading I was never told how long it might take to make money.. My educators and mentors only said what is true, it only depends on you, your effort, your funding, your persistance, but also your support)

Now with my experience I can tell you that to see you through for 5+ years to only to survive?

And remember one more thing:

Traders only talk about their wins, rarely about their losses. If someone brags about their big win, just smile and move on. Their euphoria means they are emotionally weak and they will sooner or later blow up. Trading success requires an innate calmness. More on that here.

 

 

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