By Darrell Martin
Trading isn’t all about what you can make in the next trade, in the next hour or in the next night but in looking to the long term. This series will explore the common mistakes traders make when they begin to trade.
Why Do Most Traders Fail?
There are several reasons traders fail and this article will examine some of the most common. Being impatient is one of the most common reasons new traders fail.
Perhaps new traders have the impression that they can put in $200 and make $1000 after watching a 10-minute video. Other traders do not realize the importance of patiently trading a demo account until they are familiar with a system or strategy. Instead, traders jump in impatiently trading with live money and their trading accounts are soon wiped out.
It is possible to find a good binary trade where you make $50 without knowing how you made the $50. Because it was so easy, new traders may think they do not need to waste time on education because they are already “successful.” Was that trading or gambling? It was probably beginner’s luck. The trader has a huge lack of trading education even though there is a ton of free education available to help you become a better trader. Without the proper education, traders fail because they are actually gambling and not trading. They reward themselves for bad behavior by continuing to trade without proper education.
Thinking you know it all–Not improving is another way traders fail. You might think that since you’ve owned a business, have a college degree, are a doctor or an expert in your field, you can’t learn anymore. You may think you don’t need to listen to training courses, or that you can do it on your own. If you think that you know it all, or that you don’t need to learn anything new, or change with the times, then prepare to watch your account slowly go down, down, down!
Maybe you are the type of trader who tries one system for a time, does all right with it, then hears of another system, and tries that one. You are constantly jumping between systems. You become a jack-of-all-trades but a master of none. You don’t really understand or master any of them, and because of this, you get the rules mixed up. By jumping between systems, you are all over the place, mixed up with what you should be watching for in which system, which causes you to fail in trading.
You could feel it’s best to follow your gut feelings, instead of following a set system of rules. “Trade what you feel,” is your mantra. However, if you’re not following what the chart and the system are telling you to do, and you’re just going with your gut, you’re not finding success as a trader. Following your gut feelings is not going to work for trading. Gut feelings can change daily with your mood as well.
Developing any skill requires an investment of time, practicing of skills, and being open to learning for success in the long term. It is important to have patience when trading. Take the time to demo trade and watch educational trading videos that will help you in your trading. Be teachable. All traders can learn something. Nobody knows it all! Following your gut feelings will not bring you the success you desire. Learn a system until it is like “muscle memory”, following the rules with exactness, before moving onto another system.
The next article in this series will discuss some aspects of trading, that cause beginning traders to fail. As you learn what causes failure, you will be able to find more success in your trading when you eliminate your problem areas in your trading.