The majority of beginner traders have very high expectations when it comes to trading in the financial markets. They have followed a certain social media influencer and found themselves thinking about the lavish lifestyle presented by the influencers.
What is never told to beginner traders, despite the lavish lifestyle shown, our business has the highest failure rate in the world. Since the EULA legislation made brokers emphasize the exact number of losing clients they have, numbers started worrying even me. And I am considered a professional in this business. At least I think I am.
What are the statistics saying can be shown from the picture I took from one of Europeans leading brokerage companies, FX Pro:
Nope, you’ve read that correctly. 87.28% of retail investors when trading lose money. And what got me thinking is how one trader succeeds and the other fails. What is behind this?
What I have found to be something like a pattern, is the irresponsibility of beginners to do their homework. To test out their strategy enough to be able to use it in any market condition. To work on their psychology, money management, trading management. And once people find out it takes some time to do so, they quit.
Or, they don’t even try.
The beginners think writing a journal is a stupid and boring thing to do. They think it’s for someone else, not for them.
They think that trading too big is the key that will put them in front of others. And god forbid they win a couple of trades in a row. Watch them immediately become trading gurus.
To call yourself a professional trader, you need to have at least 12 months of track record. You need a proven trading strategy that was tested out enough times to tell what will happen in any market condition.
You need to have yourself set in the right trading mode, to be able to execute the strategy you think has potential regardless of previous outcomes of your trades.
Let’s be honest, it’s easy to trade when you have 5-6 winning trades in a row. You easily open up a new position in such a situation.
Try doing that with 5-6 losing trades in a row? What’s the difference?
While browsing through my Twitter feed, I stumbled across a perfect post explaining the perspective people, especially newbies, have about trading. Check it and read it a couple of times:
Perfect question for the finishing of the statement which is so true.
‘’Any guesses why so many fail?’’
Don’t expect to be different from the herd if your path and doing is the same as the herd. You are destined to fail if you don’t invest your full attention in this business.
Demo trade, stay away from the influencers, fake gurus, journal your trades and emotions, write a trading plan. Do analyze all your trades. Learn to be able to earn!
I wish you all the best in future trading guys, I honestly do. And I hope you will overcome the obstacles I have been writing about. And become the top 10%.