Why Day traders Fail!

By R. Nelson Molina, MD.

Trading is 15% about reading the market and knowing what to do based on your trading strategy, and 85% about actually doing the right thing at the right time using the right indicators.

Why traders fail? Well is not because they cannot read the market, but because they do not manage themselves properly. 

Traders fail because of: 

1.Ego  - After a winning streak it is easy to become complacent and take your eye off the ball. The market eats egos for breakfast all the time!  I remember a poster in my dentist's office when I was little. It read: "You don't have to brush all of your teeth, just the ones you want to keep."

2. Panic/Horror - Fear that a winning trade might turn into a losing one causes traders to exit early and not maximize their profit. Fear of taking a loss when a trade doesn't go as planned makes many traders watch the loss grow bigger and bigger as they desperately hope the price will turn round again..Ouch Ouch....

3. Lack of discipline - Not sticking to the trading strategy/Plan means that traders will take any trades, trades that either don't show any entry criteria and trades without a technical reason (breakout patterns).

Traders may continue trading after they have hit their loss limit in the hope that "this one will make rich". Trading without self control is simply gambling, and gamblers always lose in the end not matter what.

4. Avarice - After a trade has hit its target, greed can lead a trader to stay with the trade as they hope for even more profit, this happens to me over and over for many years, take half, move your stops, money in the bank is the key to become a good trader. 

Trade On

McBillion

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FTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

Nelson Molina, McBillion is not a registered broker-dealer or investment adviser. Individual performance depends upon each student's unique skills and time commitment.