Why do traders fail?

coyotte · 12 January 2007

Rereading Douglas's book for around the fourth time -- this is a must first read for anyone who thinks creatively.

To basically Quote in a nutshell from pages 95 to 97:

"There is a top notch T/A Analyst who goes broke from trading --- lands a job as a Analyst with a NY broker --- he is showing the boss who is a retired Pit Trader what T/A is about when the SP hits a bottom trend line --- the boss says so this is the absolute bottom --- the Analyst - "Absolutely!".

The boss -- " That's Bull****" as he hits the SELL button." End Quote

As Douglas keeps reminding the reader "Anything can Happen".

Cheers

Wysiwyg · 13 January 2007

coyotte said:
Rereading Douglas's book for around the fourth time -- this is a must first read for anyone who thinks creatively.

To basically Quote in a nutshell from pages 95 to 97:

"There is a top notch T/A Analyst who goes broke from trading --- lands a job as a Analyst with a NY broker --- he is showing the boss who is a retired Pit Trader what T/A is about when the SP hits a bottom trend line --- the boss says so this is the absolute bottom --- the Analyst - "Absolutely!".

The boss -- " That's Bull****" as he hits the SELL button." End Quote

As Douglas keeps reminding the reader "Anything can Happen".

Wily matey.....Do you think that anyone can be targeted to trade at a loss? For example.... by their stop losses being hit, share price languishing, a sell off after entry, negative posts/press etcetera? Or do you think that it is all random and an even playing field? :run:

Realist · 13 January 2007

Most traders fail, much like most astrologers fail. Prediction does not work.... Yes!! Anything can happen.

Brokerage, taxes, and inflation reduce winnings, stop losses pull traders out of good stocks, trailing stop losses bring tax debt and brokerage fees to otherwise good holds. And charting is Astrology, it does not work!!

Shares should be bought for longterm dividend income. :

coyotte · 13 January 2007

The point Douglas is making is similar to Guppy.

That all analyst F/A T/A Gann etc is only probability.

Wavepicker hits the nail on the head when he/she says about EW "if the wave count fails" then the count is invalid.

IMO the very first thing a Trader must accept and learn to live/trade by is probability/odds --- it's no use applying it only to Trading -- you must let it become ingrained into your everyday thinking, then and only then will you apply it naturally to trading.

Cheers

coyotte · 13 January 2007

Realist said:
Most traders fail, much like most astrologers fail. Prediction does not work.... Yes!! Anything can happen :

Exactly why you would excell as TRADER Realist!

Cheers

wayneL · 13 January 2007

Realist said:
Most traders fail, much like most astrologers fail. Prediction does not work.... Yes!! Anything can happen.

Brokerage, taxes, and inflation reduce winnings, stop losses pull traders out of good stocks, trailing stop losses bring tax debt and brokerage fees to otherwise good holds. And charting is Astrology, it does not work!!

Shares should be bought for longterm dividend income. :

Not again!

I don't believe you are a simpleton, having to go over the same ground over and over and over again.

Therefore you are obviously agitating... give it a miss.

It's Snake Pliskin · 13 January 2007

Realist said:
Most traders fail, much like most astrologers fail. Prediction does not work.... Yes!! Anything can happen.

Brokerage, taxes, and inflation reduce winnings, stop losses pull traders out of good stocks, trailing stop losses bring tax debt and brokerage fees to otherwise good holds. And charting is Astrology, it does not work!!

Shares should be bought for longterm dividend income. :

Hello Realist. Long time no speak. I see you fail to recognise that fundamental types try to predict the future with their value buys. What are your feelings on this?

coyotte · 13 January 2007

Wysiwyg said:
Wily matey.....Do you think that anyone can be targeted to trade at a loss?For example.... by their stop losses being hit ,share price languishing,a sell off after entry,negative posts/press etcetera? Or do you think that it is all random and an even playing field? :run:

Don't know about individuals being targeted --- but there used to be a poster on Kitco who claimed to be a employee of one of the large US trading banks -- he claimed the Banks had the same trading programmes as the Hedge Funds (which was programmed trading) -- they could see where the Buys/Stops/Targets were and would at the right prices just swamp the market manually -- he claimed the funds just kept falling for it time and time again.

Cheers

Wysiwyg · 13 January 2007

Okay, thanks for your reply....waaay out of my league that one.

ducati916 · 13 January 2007

Pretty much anyone with a comprehensive Level II screen can see where the orders stack up and are by default "retail", and you know the MM's can see them, and will "gun them" ...............happens everyday.

Just look at the chart for defined technical support/resistance levels, and compare them to the *static volume* on Level II..........hey presto, stoploss orders.

Scalpers will follow the MM's on a gun run, and pick up ticks on the momentum thus generated.

jog on
d998

ducati916 · 13 January 2007

Market participants who fail, fail on the basis of two reasons;

*lack of knowledge with respect to markets
*leveraged by, psychological impairment, when due to lack of knowledge, they start to lose.

Knowledge of the markets is rather an imprecise and broad term therefore;

*understanding their position [strategy]
*understanding competing strategies, that can damage their strategy.

jog on
d998

ducati916 · 13 January 2007

Further to placement of stops, what you may find also, and this is where you'll be guessing, that when I place a live market order [volume] as bait for the MM, it's an exit volume [profit target]

I'm sure much static volume on the Level II screens are exit volume [profit] rather than exit volume [loss] in respect to larger players.

Stoplosses tend to be mental, and executed immediately.
Trailing stops, when they can be automated however, are an example of laddering volume, but are again, exit volume [profit]

jog on
d998

spitrader1 · 13 January 2007

ducati916 said:
Further to placement of stops, what you may find also, and this is where you'll be guessing, that when I place a live market order [volume] as bait for the MM, it's an exit volume [profit target]

I'm sure much static volume on the Level II screens are exit volume [profit] rather than exit volume [loss] in respect to larger players.

Stoplosses tend to be mental, and executed immediately.
Trailing stops, when they can be automated however, are an example of laddering volume, but are again, exit volume [profit]

jog on
d998

ducati are you talking about the cash market here not options?? and are you referring to MM's as market makers or the facilitation traders??

ducati916 · 13 January 2007

spitrader1 said:
ducati are you talking about the cash market here not options?? and are you referring to MM's as market makers or the facilitation traders??

Correct cash market.
Facilitation traders [as an estimate]
Retail [as an estimate]
Excluding MM's [GS etc]

jog on
d998

Pager · 13 January 2007

Traders fail for many reasons, the main reason IMO is a lack of Discipline.

No Discipline and everything else will start to fall apart as well, no matter how good your approach be it technical fundermental or looking at tea leaves .

Others that are significant are lack of confidence in your Method/System and lack of confidence and the ability to accept and be happy with your inevitable losses.

Cheers

Pager

ducati916 · 13 January 2007

Pager said:
Traders fail for many reasons, the main reason IMO is a lack of Discipline.

No Discipline and everything else will start to fall apart as well, no matter how good your approach be it technical fundermental or looking at tea leaves .

Others that are significant are lack of confidence in your Method/System and lack of confidence and the ability to accept and be happy with your inevitable losses.

Cheers

Pager

Discipline, confidence................all flow from understanding, which is a derivative of knowledge.

jog on
d998

Realist · 13 January 2007

It's Snake Pliskin said:
Hello Realist. Long time no speak. I see you fail to recognise that fundamental types try to predict the future with their value buys. What are your feelings on this?

No, value types do not predict. They protect.

They try and buy a company for less than what it is CURRENTLY worth.

Pager · 13 January 2007

ducati916 said:
Discipline, confidence................all flow from understanding, which is a derivative of knowledge.

jog on
d998

That’s true depending on your approach, also the timescale you trade, for a short term trader knowledge of the instrument they trade has far less relevance than to a longer term or position trader.

Discipline on the other hand (or lack of) will be the traders undoing no matter what his/her timeframe, knowledge, understanding or resources available.

Cheers

Pager

tech/a · 13 January 2007

Traders fail because they follow "Plans" or "Rules" that are flawed,methodologies that are logical paths to success in the traders mind yet doomed to failure when executed.

Nothing more nothing less.

ice · 13 January 2007

Most wouldbe traders start out woefully underfunded.
Makes any small business startup a high risk proposition and trading is just another small business.

ice

Why do traders fail?

coyotte

Wysiwyg

Everyone wants money

Realist

Billie Jean is not my lover

coyotte

coyotte

wayneL

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Wysiwyg

Everyone wants money

ducati916

ducati916

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spitrader1

ducati916

Pager

ducati916

Realist

Billie Jean is not my lover

Pager

tech/a

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ice

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