Why do traders lose money in trading? - page 11.

348Judah

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Quote from: laubeaud on June 23, 2024, 06:58:23 AM

From my experience, here are 4 reasons I discovered:

1/ Lack of Discipline— a) Not sticking to one strategy, b) not respecting your trading rules, c) not sticking to your plan.

2/ Lack of knowledge—Inadequate understanding of the market, trading strategy, financial instruments, and fundamentals can lead to poor decision-making.

3/ Not having a mechanical trading system—This leads to emotional trading. Decisions driven by emotions like fear and greed rather than rational analysis result in significant losses.

4/ Overtrading—Taking many trades will affect your decision-making ability and lead to poor decisions.

If there are other reasons why traders lose money, share them with me.

Once you're considering trading, there are many ways traders can lose their money while on any trade, there is risk in it and anything that has the potencies for generating income must also have some level of risk being involved in them, we can't void making mistakes and through this as well, many are still missing out on their trades when they realized making a mistake, we are to only ensure that we are trading base on what we can afford to lose and base on the level of our understanding of it, as another thing to consider, obviously not all traders will like to risk their money on trades and loose it, but in some circumstance, it becomes unfavorable and things can't be avoided.

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It's funny how most people can't admit that making money from trading is very, very difficult that most people are losing and only in rare cases where they are making money and even in those rare cases it is temporary because then they give up on trading because It's a very stressful activity and particularly when I research the biggest successful trades and look at their stories, it gives me the impression that they are investors and not traders, but as the guys who write the articles want to give importance to the trade, so they say that they are trades, for example these guys in this article:

10 of the World's Most Famous Traders of All Time

They are people who became very rich, but in my opinion it was thanks to long-term investments, but in the article it says that they became rich with trading. So I wonder how many people in this section are trading and making steady profits?

If we do this research we will see that out of 50 people who are trading, maybe only 1 has some profit, but not constant profit, the remaining 49 people are making losses, even following all this advice that is here. I have seen in my country some lying people who operate in the financial market, forex, have more than 5 years of experience as a trader and have consistent profits, but these people in my country do not post proof, they keep posting luxury cars and houses and are I always talk about how there are vacancies for trade courses and that the cost is $250 for each person, I don't fall for this scam, but there are people who are still mistaken that you can make money with trade, you just need to have knowledge. man, even with this knowledge the person would lose

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Quote from: laubeaud on June 23, 2024, 06:58:23 AM

If there are other reasons why traders lose money, share them with me.

In fact, the main reason for those who continue to lose money in trading activities has many reasons that must be taken into consideration, for example: analytical skills and also the knowledge of the crypto market that they have, it can boil down to the psychology and mentality of traders who always make biased decisions which allows them to act emotionally and can cause losses in their own trading, that's as simple as the main and real reason.

I have brilliant motivation for me to guide myself in carrying out trading activities, this advice makes me better when trading.

@paul pratt, said.

Quote

They jump in too soon with no risk management. Med school students take years of their lives before they become surgeons. They practice on cadavers first, and only the best survive. Not so in futures trading. There is no training requirements at all, and most people perceive themselves as being smarter than everyone else. They jump in with no knowledge or training thinking they will be rich in a year. They even tell their friends about every good trade they make. Not a peep about the losing trades is ever heard, and when they quit or go broke they pretend it never happened. They say the market is rigged, or some other untrue excuse. Enough pessimism. It is possible to be a winning trader though. It’s gonna take time, and it’s gonna take money. If you learn from mistakes and keep trying you can get there. When I first started I would scare myself on a regular basis and say “I gotta de-risk my strategy. I can’t handle the drawdown!!” Learn risk management first. Then learn to build a strategy. Learn to test it the right way. This is a biggie here. Most new traders fall into the trap of over optimization during testing. Determine worst case scenario to determine account size requirements. Never take more risk if the reward isn’t there. Weed out the bad stuff. Throw away your hard work and move to another strategy if need be. Then test your group of strategies. Do they correlate? If so you’ll be compounding risk. Better try something else. The more time to put in the more good results you’ll end up with. It’s a lot more work than people think. I’m not sitting at the beach all day and driving my Lamborghini. It’s a full time job. Maybe more. But if you work hard you can make it to the finish line. Happy trading.

This motivation became the basic basis for me when I first started trading crypto and until now, I have considered this advice, therefore I want to share the motivation here.

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Quote from: royalfestus on June 23, 2024, 07:05:12 AM

I don't believe traders can completely avoid losses; it's all about having strategies to minimize them. Human psychology, particularly greed and the desire for more profit, is a significant factor. Controlling these emotions is challenging unless you have strong emotional management around money. Experience benefits everyone in business, regardless of the field

Yes no one can avoid loss in trading it is guaranteed. Because no one has the power to know the future of a second. We can only make one prediction. But no one can guarantee anyone's prediction. No coin's price is fixed and since millions of traders buy and sell a coin in the market, no one can guarantee when the coin's price will move in which direction. to trade for this, you have to trade with risk. And the trading budget should have the ability to lose up to 50% and if someone is doing futures trading then he should have the ability to lose the entire budget. Future trading is risky like gambling and spot trading is risky but not 100% risky.

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Quote from: Sim_card on June 26, 2024, 02:42:29 AM

Trading is similar to gamble which is either you win or lose. Risk management is very important when trading and also don't allow greed take over you and be in control of your emotions. I don't think that there is anyone that will say he has never lost in trading since he started trading because even the so called professional traders run at loss if the market goes against their direction. This is why when trading only use a little amount of money to trade and has time goes on, you will be able to come up with a strategy that will favor you.

No one always makes a profit in trading and has certainly experienced losses when they do it.
Apart from risk management, controlling our emotions we also need to study related to the coins we want to trade.
If our trading knowledge is not perfect then use small money first to train our skills to get better, so that when we master the method we can improve it slowly.

Trading requires knowledge because the market may change and we must be able to analyze this, so that when the market changes we can minimize unnecessary losses.

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Quote from: OrangeII on June 26, 2024, 12:55:03 AM

Quote from: Sebas.tian on June 25, 2024, 11:00:55 PM

I think, lack of knowledge can make traders to experience losses in their trading, because you will not know when to trade to achieve what other traders are achieving from the market, because there are some skill you will use to avoid losses when you have the knowledge of cryptocurrency. I know losing income in the cryptocurrency trading is very common among newbie, because they are in a hurry to make huge amount of income in a wrong direction that will make them to lose their capital at the end. When you make use of the simple strategy, purchase when the price is low and sell when the price is high which is the best strategy many traders are using to avoid losses in their cryptocurrency trading and they are enjoying the simple strategy in their cryptocurrency trading.

lack of knowledge in trading is the same as fighting without armor. However, before trading, everything needs to be prepared, whether it is scientific, mental, analysis, speculation, research, and others. Many people trade just because they follow someone else, and when the price falls, they blame that person. In fact, in trading you really need to have adequate knowledge and analysis. There are many factors that can cause people to lose money in trading. Therefore, before trading, we need to consider everything.

But common problem of newbie trader is they expect a lot that trading is all about buying low and sell at high that's why when they come on real trades they lose because there's sudden changes happen and they don't know what counter actions needed to do. If these people didn't come having great expectations then became greedy for fast results for sure that they can avoid any potential lose that they might encounter.

If they already experience a defeat then I guess its not good to blame their mistakes to anyone. Since that's not really good attitude since its shows how immature that people and not ready to take risky decision in investment matters. If they want to learn and get valuable lessons from what they experience then they should come back on their research then learn technical things so they would know more information about what are other things that can help to increase their chances to win on their future trades.

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Trading is similar to gamble which is either you win or lose. Risk management is very important when trading and also don't allow greed take over you and be in control of your emotions. I don't think that there is anyone that will say he has never lost in trading since he started trading because even the so called professional traders run at loss if the market goes against their direction. This is why when trading only use a little amount of money to trade and has time goes on, you will be able to come up with a strategy that will favor you.

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Quote from: Sebas.tian on June 25, 2024, 11:00:55 PM

I think, lack of knowledge can make traders to experience losses in their trading, because you will not know when to trade to achieve what other traders are achieving from the market, because there are some skill you will use to avoid losses when you have the knowledge of cryptocurrency. I know losing income in the cryptocurrency trading is very common among newbie, because they are in a hurry to make huge amount of income in a wrong direction that will make them to lose their capital at the end. When you make use of the simple strategy, purchase when the price is low and sell when the price is high which is the best strategy many traders are using to avoid losses in their cryptocurrency trading and they are enjoying the simple strategy in their cryptocurrency trading.

lack of knowledge in trading is the same as fighting without armor. However, before trading, everything needs to be prepared, whether it is scientific, mental, analysis, speculation, research, and others. Many people trade just because they follow someone else, and when the price falls, they blame that person. In fact, in trading you really need to have adequate knowledge and analysis. There are many factors that can cause people to lose money in trading. Therefore, before trading, we need to consider everything.

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Quote from: royalfestus on June 23, 2024, 07:05:12 AM

I don't believe traders can completely avoid losses; it's all about having strategies to minimize them. Human psychology, particularly greed and the desire for more profit, is a significant factor. Controlling these emotions is challenging unless you have strong emotional management around money. Experience benefits everyone in business, regardless of the field

It baffles me today that some people online would be advocating a 100% winning strategy, what a heck!!! And to make matters worse, some gullible people would believe this and will invest massively in such, but in the end, they will lose all their money. This can only be possible with either the people lack trading knowledge and exposure or they are merely unwise. Because even if someone advertises a thing like that to you, why don't you use your brain to think whether it's possible or not?

That said, though traders can't entirely avoid losses, they can put them under check to the extent that they may still have 95% winning. You might also be wondering if that is not too high, yes, to most, it is too high, but to some few, it is not. The beauty of their trading is to have a very good strategy and trade when all confirmation are checked. If such traders also have viable management and psychology, I am certain that trading will be too easy for them.

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I think, lack of knowledge can make traders to experience losses in their trading, because you will not know when to trade to achieve what other traders are achieving from the market, because there are some skill you will use to avoid losses when you have the knowledge of cryptocurrency. I know losing income in the cryptocurrency trading is very common among newbie, because they are in a hurry to make huge amount of income in a wrong direction that will make them to lose their capital at the end. When you make use of the simple strategy, purchase when the price is low and sell when the price is high which is the best strategy many traders are using to avoid losses in their cryptocurrency trading and they are enjoying the simple strategy in their cryptocurrency trading.

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Traders often lose money in trading for several reasons, including lack of knowledge, poor risk management, emotional decision-making, and market volatility. Even experienced traders can face losses due to unforeseen market movements or overconfidence in their strategies. Just like Egle DiceGirl, a Slots Games Expert, who understands that every game has an element of risk and requires a strategic approach to maximize winnings, traders must also approach the market with a well-thought-out plan, disciplined execution, and an understanding of the inherent risks involved. Without these, the chances of making consistent profits diminish significantly.

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Quote from: mirakal on June 23, 2024, 08:14:58 AM

No matter what you do OP, this won't give an excuse for losing, all traders commit mistakes.
You have all the points as to why traders lose their money but even how careful you are, losing is still possible. Therefore, don't assume we can avoid this because of the volatile situation of the market, you can't put everything in our hands and know what will happen next. In fact, even pro-traders still lost which means that there is no perfect trading strategy to be found and it never existed. The only thing we can do is to minimize losses but can't stop it.

If you are really a trader, you know the situation already. Losing is a part of trading but I don't see it in a negative way instead, it helps me think that trading is risky and hard to rely on.

Yes, being aware about the reality in trading before one decides to trade can be of great help. That way, a trader should learn a solid risk management instead, so that he can increase his profits and lessen the chances to be at loss. There's no certainty in trading, but as long as you follow all the basic requirements to be a safe trader, you will never be constantly trading at loss.

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Quote from: royalfestus on June 23, 2024, 07:05:12 AM

I don't believe traders can completely avoid losses; it's all about having strategies to minimize them. Human psychology, particularly greed and the desire for more profit, is a significant factor. Controlling these emotions is challenging unless you have strong emotional management around money. Experience benefits everyone in business, regardless of the field

It's just that no matter how capable we are as traders, losses are still visible in trading. Maybe some strategies may stop working already that have turn our trades into wrong moves, and sometimes poor decision making and lack of discipline will lead into poor results.

However, given the fact that traders still lose money in trading, then all we have to do is practice more in the market and gain more experience. Well-experienced traders have always an advantage over those others who have not. And by exposing yourself into a lot of better trading ideas, and applies solid risk management in trading, most certainly the outcome will be a lot better.

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Quote from: laubeaud on June 23, 2024, 06:58:23 AM

From my experience, here are 4 reasons I discovered:

1/ Lack of Discipline— a) Not sticking to one strategy, b) not respecting your trading rules, c) not sticking to your plan.

2/ Lack of knowledge—Inadequate understanding of the market, trading strategy, financial instruments, and fundamentals can lead to poor decision-making.

3/ Not having a mechanical trading system—This leads to emotional trading. Decisions driven by emotions like fear and greed rather than rational analysis result in significant losses.

4/ Overtrading—Taking many trades will affect your decision-making ability and lead to poor decisions.

If there are other reasons why traders lose money, share them with me.

All these reasons can be compiled in lack of proper knowledge and orientation about trading. I will also tell you that greed do have a positive impact on traders losing their money because some traders are very greedy and will prefer to wait for more profits instead of taking the little one they already have.

Some new traders do rely on signals from people they don’t know, they prefer to wait and pay for trading signals instead of learning for themselves, they will rather pay so that they can make it quick and these are the reasons why new traders lose money easily.

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Quote from: laubeaud on June 23, 2024, 06:58:23 AM

4/ Overtrading—Taking many trades will affect your decision-making ability and lead to poor decisions.

Over trading isn't just opening too many trades as some traders can be trading on different trade and will still be able to make profits. Opening different trade at the same time isn't a bad way of trading but newbie shouldn't do it. If you don't have enough experience you can mess things up finish one trade before opening another. This is how I started to trade but later I could multitask and it is still going well for me as I haven't had any problems.

Overtrading for me will be trading when you're exhausted from the days work or from trading already but you still want to trade more and it could be for reasons that aren't disciplined as chasing a loss or you are just being greedy. Every trader should know where their limits are so they don't overwork their brains and it begins to make them to be out of control and making mistakes.

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Everything you mentioned OP is true, which is where some of the points you mentioned are indeed one of the triggers for more significant losses, and maybe I will add that greed can also certainly be a trigger for losses, no matter how much profit you managed to get in the session you did but if you do not have the ability to control or restrain greed in yourself then usually in the end the results will be disappointing again.

But on the other hand I will also say that in the world of trading risk will always be a part that can never be fully tolerated, meaning that knowledge, strategy and risk management are only useful for increasing opportunities and minimizing the possibility of loss but does not mean that it can completely prevent yourself from losing, meaning that losses are something that is natural or natural for traders and all traders experience it including those who are professionals or who are successful, but when you continue to improve your knowledge and risk management as a shield then the amount of your losses will not be too significant.

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Quote from: laubeaud on June 23, 2024, 06:58:23 AM

From my experience, here are 4 reasons I discovered:

1/ Lack of Discipline— a) Not sticking to one strategy, b) not respecting your trading rules, c) not sticking to your plan.

2/ Lack of knowledge—Inadequate understanding of the market, trading strategy, financial instruments, and fundamentals can lead to poor decision-making.

3/ Not having a mechanical trading system—This leads to emotional trading. Decisions driven by emotions like fear and greed rather than rational analysis result in significant losses.

4/ Overtrading—Taking many trades will affect your decision-making ability and lead to poor decisions.

If there are other reasons why traders lose money, share them with me.

5. Being Greedy
6. Bad risk management
7. Impulsive emotions
8. Trying to chase up loses or simply being that gambler like mind or approach

Losing money in trading is something that cant really be that avoided. It is really just that on basing on how well you would really be trying out to make adjustments
on the moment that you would really be experiencing those things specially on market movement. You would really be that making adjustments accordingly
on where you would really be able to make yourself that having that good control because once you do make yourself having that lost track or path due
that because that you do become that impulsive then this is where issues would really be starting out to come out.

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Quote from: boyptc on June 24, 2024, 06:04:21 AM

Quote from: laubeaud on June 23, 2024, 06:58:23 AM

1/ Lack of Discipline— a) Not sticking to one strategy, b) not respecting your trading rules, c) not sticking to your plan

The plan is to make a profit but whenever that plan and profit is hit, you do not follow your discipline and plan. You want to profit more and that is because that type of trader lacks discipline.

From a to c, they are all correct. You do not respect and honor your plan and the rules that you set for yourself.

You are so distracted by adjusting new rules and new goals.

That is the unfortunate truth for so many people out there, they should take profit when they think they reach the peak, and yet they don't and that's the issue. I feel like we should try to do a better job, but we somehow still manage to fail, I do not understand why, but we do.

This is why I think it would be a shame if we do not end up with anything good in the end. We are going to be forced to have some issues of course, and if we keep doing that then we are not going to be certain with what we are doing, but that doesn't mean that we are going to be always this oblivious towards the market. The more time we spend on the market, the more we learn and that experience could turn into profit as well, so we do not make the same mistake again later on.

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Quote from: Sebas.tian on June 23, 2024, 11:28:11 PM

When traders lack knowledge of trading, it will be difficult for such trader to achieve what other traders are achieving from the market, because he or she will not trade when it is time to trade because he or she lack the knowledge of cryptocurrency trading. Lack of patience can make traders to lose their funds in the cryptocurrency trading, because you need to apply long term holding even though the price is still decreasing in the market, because the price will not remain like that forever in the market and if you can endure for the bullish season to appear, it will make you not to lose in your trading. If you don't want to lose your funds in trading, try to eliminate fear in your trading which is the major thing that is causing some traders losses some time in the cryptocurrency trading.

If I read what you said above, you said you prefer the spot investment method (long term holding), Even though there are several investment methods, spot and trading both have risks. For me, spot is not that scary compared to trading. If someone is a beginner who wants to try investing, I think it would be best for them to look for a friend or close relative who has experience with crypto, at least that person's knowledge will understand much more quickly than if we learn it ourselves.

what do you mean, if we don't want to lose funds in trade, you have to get rid of fear? In my opinion, even if you eliminate this fear, it doesn't have a big influence on whether you lose your funds or not. In this case, it is the determination in choosing assets, if we choose the wrong asset, even though the fear has disappeared, we will still lose our funds.

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Quote from: laubeaud on June 23, 2024, 06:58:23 AM

2/ Lack of knowledge—Inadequate understanding of the market, trading strategy, financial instruments, and fundamentals can lead to poor decision-making.

That is the main reason why many people fail in trading because they don't have adequate understanding in trading they lack knowledge but they won't try to go and ask because they don't them they will get money on it they just try on there on without asking about how he works and after losing they will start complaining that they lost there money and it is their fault they didn't compare to ask they take risk by themselves and that is the main reason why many people can't Because you need some experience before you decide to take a risk on your own. That is the primary reason why many individuals fail can't succeed on trading. Because before taking risk by your self you need to have some experience about it before you can decide to take by your self.

Quote from: laubeaud on June 23, 2024, 06:58:23 AM

4/ Overtrading—Taking many trades will affect your decision-making ability and lead to poor decisions.

Many traders have made trading a daily career, but some are greedy and lose when it's time to cash out. They won't be able to predict the market and will likely lose their capital unless they stake another and try again and probably they will win or lose, and I see people that trade everyday some don't appreciate what they get that is why they are on stake everyday. And is like gambling you need to be giving space in anything and with doing it everyday cause addicted, if you win in trading spend like two to three days and stake again.

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