Topic: Why do traders lose money in trading? - page 4. (Read 800 times)

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.

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.

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.

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.

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.

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.


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.

Anyone without proper knowledge will hardly be a successful trader. Knowledge is the most important thing we need first before attempting to trade. The main reason why some traders lose money is due to a lack of proper knowledge, along with other factors that contribute to failure. However, knowledge accounts for over 90% of success. If someone has proper knowledge, the factors you mentioned will hardly affect them.



There are some traders who are very eager to make money quickly. This eagerness leads them into overtrading. Later, they start losing money in trading because they don't have time to monitor all the trades they are making. To avoid failure in trading, try to avoid overtrading.

Speaking about new traders, they also doubt their analysis as well. Even if they have discipline, knowledge, and a rational trading system, and they don't overtrade. I also consider myself a newbie as I don't trade often. So most of the time, I am doubting myself, for example, today news came out of MT GOX, it was confirmed news but I also heard some relevant news about MT Gox Yesterday when BTC was at around $62k or $63k.

Now it's around $60k. Not a big difference though but still overall market fluctuates which is bad. I would like to add, build your confidence by practicing your analysis on paper trading or backtesting trading. Overtrading no doubt a good tip, as I once caught up in overtrading and lost all of my funds back in 2021 or 2022 while I was doing future trading.

No trade can consistently produce profits even though the trading knowledge you have is very experienced.
Trading is much more speculative and there is a lot to learn, a lack of discipline and knowledge can result in losses.
Taking a lot of trades will create a lot of things that need to be analyzed which will lead to speculation about the coins being traded.

It is better to choose a few coins and study them properly so that not many risks will occur. Trading does not always produce profits and this is where knowledge is needed to recognize potential coins.

It's true because sometimes people who trade frantically or greedily actually get lucky moments. like panic selling when the pump just happened, but in reality the pump was very short and then corrected very deeply. Of course, everything is outside the plan, but traders can make a profit.
Being emotional in trading is not entirely a factor in traders losing money. but it would be better if in trading, traders could control their emotions better. adapt to market situations and plans that have been made.

Yes, trading has certainly it's own inevitable losses so one should never expect consistent profits in trading as the market can suddenly turn unpredictable which may lead losing in your trades. That's the reason why we can't avoid losses in trading, as much as we can never guarantee profits all the time.

Trading is highly risky as well so anyone who decides to trade and aim profits should have higher experience trading in the market, otherwise all the trading funds will definitely go into waste.

Of all that you've listed OP, you've forgotten the fact that it's just a bad day for that trader that day, that's basically what it all boils down when it comes to losses in trading, your analysis isn't so on point and you don't have the things that you need to be aligned in the right place at that time, sometimes it's all just losses for you as a trader. I don't know much if I should agree with the third one though, I feel like it's not a bad idea to have emotions in trading, sometimes those big trade wins are possible because of a gut feel so I don't necessarily agree on that as a cause for losses. Maybe it's all just inexperience that has lead you to all of this losses.

What do you mean by "mechanical trading system"? Do you mean a trading bot? I can imagine how the financial markets would look like if all the traders were using automated trading bots.
There's no way everyone on the market to make a profit and nobody to lose money. Somebody has to make poor decisions and somebody has to fail at timing the market. All the things you mentioned in your list are true, but so what? There will never be a situation on the market, where all traders are perfectly disciplined, perfectly competent and have a perfect strategy.
I don't consider overtrading to be a bad thing. The day traders are gaining experience by trading more, even if some of the trades aren't profitable.

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.

Lack of knowledge is the problem that many traders face, not just beginners but also people who already starts trading. They don't trying to learn more about trading and all the things because they thinks that is difficult. That's why some people depends on the signal trading from others to trade.

Overtrading can be solved if they have knowledge so they will not confuse with their trades. They can manages their trades without a problem and could takes their profit. They can also knows when they can trade and quit from the market.

The important things if you wants to trade is have a knowledge of trading so you will have a chance to know when to trade. You can analyze the market and trade with the current situation. You can use all your skills properly while you still learn more about trading.

Here I would honestly disagree with you and in my opinion this is exactly what OP describes in his first point.

Newcomers in particular lose trades (or far too much money in unsuccessful trades) because they don't stick to a predefined plan and are "flexible in their target". But that's exactly when mistakes happen and you end up pouring money into poorly performing trades, for example.

This is where bots are a great help and prevent you from making emotion-driven decisions regarding trades.

You don't need to trade like a robot. You could have you algorithm and rhn it through a bot to automate your trades but be flexible with your targeta depending on how much the daily swing is.

Traders lose money to give that money to other traders. That is how this works because of the former would not exist there would be less profitability from trading and people would stop doing it.

Knowing how to handle emotions is important often lacking from traders.

Well, @OP, I will agree with you that some of these problems that you have listed are also factors that can make a trader lose money while trading, but I hope you will understand that trading losses are a natural phenomenon; no one can control the price movement of cryptocurrency, which is why it can go against your predicated price, and when it goes against you, you will definitely incur losses.

Normally, all traders encounter losses most of the time, and the reason for such losses may not necessarily be because of the reasons that you have pointed out. 

Among the list, this one is crucial for me. Why? Because consistency, emotion control, and risk management are involved here.
For example, not sticking to one strategy, not respecting your trading rules, not sticking to your plan - these are the common things that traders is doing that talks about "lack of discipline".

Good traders that make money than lose use low or no leverage at all. For traders that are using high leverage, they mostly later lose. Using high leverage means you are not patient and that can lead to big loss. Are you trading, using high leverage and not losing? It has been 4 years that I have been trading and I am more practical with my experience. High leverage is very bad. It makes trading to be more like gambling. Go to those exchanges, check the leaderboards and see if those people use high leverage. Most of them use 1x.