Why do Newbies Lose?
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Thread: Why do Newbies Lose?

  1. #1
    Hi all,

    Just wondering what exactly do newbies do to shed?

    I mean when you start a trade, regardless of any analysis you do, you're issued a 50:50 chance of winning/losing, so how can you lose overtime?

    Well, I guess the first issue is trading price, each trade you make it will cost you around 3 pips, so if a newbie makes 100 trades, 50 wins and 50 losses of equivalent dimensions, they will wind up down 300 pips. I believe newbies have a propensity to create many many trades in a brief time period, the market increase several pips and they buy, the market drops a couple of pips and they sell, hoping some huge rally/selloff to begin, (I know I did). So this is going to cost them. The next thing I guess is they have a tendency to close a trade when it moves into some pips profit, and hold a commerce as it goes further and further into loss, but how can this result in net loss? Surely you would just wind up with many tiny gains equalling a couple of large losses, unless you MC the account entirely.

    Anything else? Using too much leverage? , this only accelerates the process of winning/losing, so can't really be delegated to the cause of losing.

    Anyone care to talk about?

  2. #2
    My personal experience is that, newbies lose because they do Not have:Fantastic money management Emotional endurance Point 1 can be learned. Point 2 and 3 can just come by repeated practice.

  3. #3
    I believe another reason that newer traders lose is because of the absence of discipline that is essential to trade successfully. That is usually something that is developed over time through persistence and practice. They also don't know if they don't have an edge and they make the mistake of using too much dimensions (aka leverage) within their transactions during this period of time which leads to a significant loss of funds that is too big for them to return. The important thing is occupying your first two years without getting hit out of the game. As soon as you have endured that long you begin to become profitable if you haven't already by that time period. Always concentrate on risk/reward ratio, know what you will lose if you choose the trade and it moves against you and maintain a record of what is working and what isn't working since markets change and it will allow you to come up with a solid game plan which changes with the market.

  4. #4
    Most people loose because we've been fooled by randomness.

    We see a pattern and it functions. . .but did it work? We see a break out and it worked but only produced a small move, something such as 1:1 or even 0.5:1

    We say it worked although it did not really. That's what fooled by randomness means and there a book with that title.

  5. #5
    Chance of winning/loosing is not 50:50.

    It's not true that currency can go only up or down and that is why it's 50:50.

    When it goes up or down, nothing would be simpler then open short and long same time, place 10 (15, 25 or anything) pip SL, one gets hit, additional commerce runs profitable over SL that got struck spread.

    With these two transactions (short/long same time) and TP bigger than SL both SL-s can get struck simple if market is ranging just a little.

    Some times chance is 50:50, some days 40:60, some times 17:83 ... damn, not days, we can say moments. And you can not imagine those endless combinations for every single moment, quite impossible.

  6. #6
    Quote Originally Posted by ;
    Hi all,
    Just wondering what exactly do newbies do to loose?
    I mean when you start a trade, irrespective of some analysis you do, you are issued a 50:50 chance of winning/loosing, so how can you loose overtime? Well, I guess the first thing is trading cost, each transaction you make it will cost you around 3 pips, so if a newbie makes 100 transactions, 50 wins and 50 losses of equal size, they will end up down 300 pips. I think newbies have a propensity to make many transactions in a brief time period, the market rise several pips and they buy, the market falls a.. .
    First I dont know why you think you have 50 percent chance to win ?

    First in Forex we've spread(2,3,4,8...) that mean chance is always lower than 50.
    Second thing,FOrex is occupation that mean you need to learn to work on job,example is like medic,you must finished colage for a medic same is here,you need to learn to trade,you need to trade years to get expirence,knowloage...

    Also among things,you can use egy you like butr in case you dont work on such egy years and constantly change and instal new you will never earn money from Forex.

    I will tell you one thing set one Typical as you'd like, commerce in direction and retrace ffrom that average with 2-3 % risk on balance you will have postiive outcomes at end of month or trade on each good pin on daily chart and put sl 20 pips above pin also you will have positive outcomes but point is you must work one egy you had been choise...

    Also this is hard buisniese and you must know 20 chief rules if you dont honor just one your chance for profit is reduced.


    My guie find egy for your character m5,h1,h4 whaterver you prefer and commerce DEMO 6-12 month when you've got positive results that you can gradually go to reside with smal acc. .

    Additional gt; Never expect main profits from Forex,put money you are able to reside withaout them and trade only for extra profit.Also I will tell you one thing 97 percent milioners from Forex were very rich before Forex....

    Cheers and happy trading

  7. #7
    Should you start a trade at an arbitrary path, lets say brief, using a spread of 3 pips (lets ignore all other trading costs) and you decide on a TP of 47 pips, and a Sl of -53 pips. These corresponded to a rise or fall on the bid price by 50 pips every way. Therefore, if you loose, then you receive -50 pips - costs (3 pips) = -53 pips, if you win you receive 50 pips - costs (3pips) = 47 pips. So probability that bid price with increase from 50 pips is 50% and it's going to decrease by 50 pips is 50%, (generally). Thus you're trading with 50:50 odds, you merely pay trading costs on each trade

  8. #8
    Its an excellent question, and its really rare to find new traders who can beat a random platform. The wonderful thing is just how much worse they perform

    Generally we are pre programmed to perform all of the wrong things we take excessive risk once we must be conservative (e.g. permitting losses to run), we're are conservative when we should take risk (e.g. taking profit instead of letting profits run)

    We concentrate on short-term variance rather than long term functionality.

    We have difficulty understanding the nature of the random distributions in returns, we have completely unrealistic expectations that are practically impossible to realize.

    As you point out, trading within too brief a time period is a major element.

    Incorrect position sizing plays a role.

    Many people fail at all things !

    Its down to a total lack of experiece and knowledge. The problem is made worse since practically all of the information available is at top of no value since its context sensitive, advice that could be valuable in one scenario is detrimental in a different, and at worst, a lot of the advice provided or marketed is complete crap.

  9. #9
    Trading forex is complex and requires a degree of patience that's off the charts if you want to be quite successful. When you initially start trading, the amount of patience required is beyond most people's understanding. You can't gain that degree of patience unless you have experience. You can have each of the trading talent in the world, however w/o experience you're at a disadvantage to a more experienced trader. Things that I considered bizarre, so far as price action is concerned, a couple years back are really very regular now.

    There are two types of gifted traders IMHO. There's the trader who has no analytical skills, no pure talent, no original trading thoughts BUT has good communiion skills. This sort of trader will seek out a mentor and will extract ever usable information from that mentor till they have a viable egy. The other sort of trader is a person who is exceptionally talented but has no expertise. They'll get it eventually since they are simply that gifted.

  10. #10
    Quote Originally Posted by ;
    There are two kinds of talented traders IMHO.
    Ooops...I meant to state that there are two varieties of TRADERS....because the first trader allegedly does not possess any trading ability as it had been.

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