Why do most traders Fail ?
There is a very long list of reasons of why most traders fail, that is for sure. I can’t go over all of them, but I will try to talk about the main reasons most people fail when trading,as well as how to finally be able to avoid failure. Myself I have failed at trading for almost a whole year before I finally figured out what were the mistakes I was doing over and over again. It was very simple to fix these problems after I figured them out! I couldn’t believe it took me two years to learn how to become profitable!
My breakthrough came one morning when one of my friends who was interested in trading came over to watch me how I trade. He stood there near me and watched for a few hours as my account went from $400 to $1500 within a few hours of trading. He couldn’t believe it! Then, before in a matter of minutes, my account was wiped. I told him, “That’s why it’s harder than you think! Did you see how fast I lost my whole account?” His response ended up changing my trading career forever.
“Well, VorteXz… why the f*** did you wipe your account? It shows right here in your rules that you weren’t going to trade over 5% of your ballance per trade. It also says that once you have three losers in a row you’ll stop trading for the day AND it says you won’t fight the trend. It seems to me like you took more than five trades in a row that were losers, and if I saw correctly you were placing PUTS,during that big bullish move The last trade you placed was 60% of your ballance… You didn’t follow a single one of your rules!” I was astonished to realize that, even though I had my list of rules written in fron of my eyes, I was completely ignoring them!
What is the point of having rules if you are completly igoring them? If you start breaking your own rules you are just basically playing a high risk gambling game and you might start as well losing your money casino or something! Because of my friend I am now taking the time to read my short list of rules as a reminder when I am trading. To this day, I have not broken a single rule.I never break rules, I always trade like a machine, never with my heart but always with the rules in my head 🙂
Make sure you always learn from your mistakes and make this your number one rule: Never break your rules! It sounds like It may sound pretty easy, but it takes a lot of patience and dedication to do so. Each day before you start trading, take a few minutes and read the the list of your own rules. If you do, you will always have them fresh in your mind while you are trading. Remember, if you don’t follow your rules and start breaking them, you are highering your chances of failure!
Most surely you are already familiar with my trading from our Discord room, if you also have VorteXz Trading System you already know that I am trading like a machine and NEVER break any rules ! If you don’t have it, I strongly recommend that you buy it because it is a must have in your road as a great trader !
1) Having No Plan –
It is a well known fact that most new traders don’t even create a plan when they start to trade. If you don’t have you’re plan, which includes your rules and trading strategy, how are you supposed to stick to that plan? When your emotions start going out of control during a trade, you need a well written plan that you can check back to. Without a good trading plan you will most likely end up like the other 97% of traders that are constantly failing at trading
– Having a plan is very important, but first you have to know what information goes into your plan. This is a good list of things you need to decide before you start trading:
1) What time of day are you going to trade? I personally recommend London sessions and New York sessions for our type of trading
2) When are you going to quit trading for the day? Sometimes it’s best to make a goal and take a time off for the day after you reach your daily goal
3) What is your trading strategy?
4) Money Management – Now you don’t even have to worry about this because if you are in my trading room you must already be having VorteXz Smart Money Management guide, which is the best money management a trader can have !
2) Emotions –
In my begginings as a trader,most of the time when I lost money this was one of the biggest fears. If I had a single losing trade I was suddenly losing sight of my trading plan and let my own emotions take over which often led to bad trading decisions.
Traders all have two modes that we go into while trading: Reactive and Responsive. When I have a losing trade, I go into the reactive mode. While in the reactive mode you start losing your perspective and you have difficulties controlling your actions and decisions. You don’t think before you act! If you’re like me, you have to walk away from the computer when you go into reactive mode. For example, when I get a loser now, instead of forcing trades, I start listening to a song that I like or start doing an outdoor activity for a while. If I don’t get away from my trades while my emotions are taking over, I will blow my account!
When trading you always want to be in the responsive mode. In this state your mind is more relaxed and you can look at the bigger picture. This isn’t just for trading, but for every aspect in life.
– To avoid letting your emotions ruin your trades, trade like a robot! You can’t let emotions control you. If you have several winners in a row and you get yourself too cocky, in the next trade you start doing 50% of your account balance and will probably lose, because you started trading upon your feelings and emotions and not your trading plan. And if you start to lose 50% of your account because of a bad decision trade, most likely you will get angry anddepressed and you will quickly want to recover it. You might try to make up for your earlier loss by putting your remaining balance into the next random trade at that point, and from my own experience that trade will most of the times be a losser. I can safely make that assumption because I lost money on trades like that many times!I almost never did win that last trade :). Just by letting yourself know that you will never be 100% accurate, you simply accept your losses and move on. Once you can accept minor the minor losses and start looking at the long term picture you will be well on your way to achieving the financial freedom we are all looking for ! 🙂
3) Over Trading –
When I first began trading, sometime like 8 years ago I was in the get-rich-quick mode. (We all know that newbie guys that are trying to get rick quick in our trading room, don’t we ?)
I wanted to turn my $200-$300 account into 100.000$ within the first week of trading. I was placing over 30 trades a day, and was consistently blowing my account on a daily basis.A few years ago I even raised an account from 10.000$ to 100.000 $ in a few weeks and then, in a day that I got emotional I lost it all in just a few hours !
Then,one day while I was doing my own math, I started figuring out that if I could trade 3/3 each day making $500 trades, that would be $1,200 in pure profits a day. Everything completely changes when you start thinking long term. There is no reason to make a whole bunch of trades per day. The key to success is consistency! Take only the best setups and trade a maximum of five-six times a day. Instead of trading with 50-60% accuracy trading a lot of trades per day, trade with 75% or more accuracy with as little as five trades day. You will make even more money in the long run, while spending less time looking for trades all day. When you are overtrading you are taking lot more risk of losing because the market isn’t always as we want it to be. The more trades you made, the higher the chances to lose. If the setup isn’t perfect, stay out!! This is why, in our trading room I only send 1-6 trades a day and never over trade, even tho some members might be complaining about it, I keep it simple because I know what I’m doing ! 🙂
I won’t take the trade. I can’t believe how fast the cash started adding up once I created and utilized a checklist. If you have a problem overtrading, I would highly recommend creating your own personal list to help keep trades on track!
4) Making it Complicated –
When starting to trade, it seems harder than it really is. There’s no way that trading could be simple, right? We all go on a search for the holy grail of successful trading, adding tens of indicators at a time on our chart and trying out every different type of strategy we find on google just because someone else is making money off of it(or not). We think to ourselves, “If they’re making money with that strategy, then it will make me money too!” but that is not always the case.
In order to show you just what I mean when I say “making it too complicated,” I’m going
to show you one of my early charts from my very first days of trading. Let’s take a look:
This chart may seem like a joke, but that is how my charts were looking like in my few first years of trading. I tried any and every type of indicator I could find in my search for the holy grail. You wouldn’t believe how many traders out there have the charts that look like exactly like this or even more ! The problem with this method is that all of these indicators are conflicting one with each other. You don’t need more than THREE indicators on your charts, NEVER!
The biggest lesson I learned in trading is to keep it as simple as possible! Figure out what works for you, and keep it simple. You often have to make trading decisions in split seconds, so why would you have ten different signals conflicting with each other while you’re trying to make your trade?
Now let’s take a look at a more recent chart, taken right from the best trading system ever developed for binary options, VorteXz Trading System:
This is now my simple chart. No fancy indicators, nothing special. Everything I need is on this chart. The bollinger bands show me the direction I want to be trading, the price bars (a heavily modified Value Charts developed specially for VorteXz Trading System) show me the when price action gets to extremes for a solid entry. You should never have more than THREE indicators on your chart at any given time: I am using Bollinger bands and Price bars and News Cal So I can know each time when news are near so I can avoid them. If you can’t look at a chart and instantly tell where to trade, you’re not doing it right.
5) Lacking Patience –
Lacking patience is the killer of binary traders. Having patience and discipline is the key to trading. If you don’t already have these skills, you definitely must make the effort to master them. If you don’t, you will most likely start to make one mistake after another while you are trading. It took me TWO years to master patience and discipline. This is one of the hardest parts to master,but it is absolutely necessary for successful trading.
As strange as it sounds, we want to make trading as boring and as simple as possible. If trading becomes exciting and you start letting your emotions flow at critical decision, then you are likely to make more mistakes. If that chart you’ve set up and the trade doesn’t line up 100% with your rules, then don’t trade it! When I first started trading I absolutely loved every second of it. The fast money you can make, all the adrenaine, let’s face it, it’s a beautiful feeling! But I also lost all of my money like this 🙂 When I started forcing myself to follow my rules and resist impulse of trading, I finally started to make money. Do I enjoy trading now? Not at all! But does finishing a day with a $5,000 profit make the lack of adrenaline rushes worth it? F*** yeah! Trading is only meant to make you money, so there is no place for emotions and rush. If you have the patience and discipline to follow your trading rules there is no doubt you will start to make big loads of money. Sometimes you won’t even find a good trade for more than a few hours, and you probably already know that from our trading room in Discord.Sometimes it takes me hours until I send a trade to you, some might even wonder if I am still there, but I am always patiently waiting for the right moment to enter a trade.
Is is why patience is the key to becoming a good trader. Only when you find a trade that meets 100% all your rules, that’s the only right time to place the trade !
Hope you ejoyed my article and will be a good resource for you in your road of becoming a great trader and achieve your financial freedom ! 🙂