If you’ve been trading for a while, I’m sure you’ve heard the statistic that 90% of traders fail. Also, I’m pretty sure that all of us strive to be a part of the 10%. How can we do this?
What the 90% does Wrong:
The best place to start is to understand what we as traders struggle with most. Below is a list of the most common ones:
- Jumping into the world of trading blind (no planning / studying / research).
- Having unrealistic expectations.
- Trading with scared.
- Trading without a strategy.
- Not sticking to a strategy.
- Not sticking to stop losses.
- Not sticking to profit targets.
- Risking too much.
- Fear of missing out (FOMO).
I didn’t put emotions on the above list because they are the cause of most of our struggles… Meaning they normally are the common denominator.
So How do You get Into the 10% ?
This might be a bit disappointing, but the answer is simple: you do the opposite. See below:
- Instead of just jumping in blindly, start by doing proper planning and researching. For example: don’t buy courses and mentorships blindly, do your research first.
- High expectations is not all wrong, but it can put unnecessary pressure on you. This goes back to the above. If you do your research, you’ll have a better idea of what expect.
- If you trade with money you can’t afford to lose, you might be too scared to put on trades or you might try to make money back that you’ve lost (revenge trade). Don’t trade with scared money. Plan.
- You have to have your own strategy. If you don’t, you will always be in limbo because there’s nothing you can measure yourself or your trades against. Whether you are right or wrong on a trade, you will never know if it was good or bad trade. You will never know where you are heading. I don’t know about you, but I don’t want that feeling.
- You have to stick with your strategy. The consequences is similar to the above point. But to add on, you must realize that searching for the holy grail strategy is fruitless. Make peace with the fact that all strategies will have losses and that you can’t predict the markets. Take the time to search for a strategy and back test it. This will give you confidence to stick with it.
- Again, you have to stick to your stop losses. Remember, one trade is all it takes to blow up your account. Your best insurance is to cut your losses where you initially planned.
- Same as above, you have to stick to you profit targets. If you don’t, the mathematics won’t work. Think expectancy.
- It’s simple: the more risk per trade, the more you stand to lose. Don’t think how much you can make on a trade, first think how much you can lose on a trade.
- FOMO is another big challenge. But it can be overcome by following the rules of your strategy. Review your strategy every time before you do analysis and before you start trading. And before you place a trade, ask yourself: “Am I following my strategy?”… if not, don’t place the trade. Understand that you are going to miss trades, that other people will be in trades (and make money) that you are not in. Make peace with the fact that can’t be in all trades.
Working through these struggles is not always easy. But by identifying them and admitting they are the cause of your struggles is a great start, because now you know what you have to work on.
Pick one of them and start doing the work. Also, always keep in mind that with patience (long term mindset) and discipline, a lot can be overcome.
Finally:
I know the solutions offered to your trading problems are not always what you want to hear, but the sooner you accept that there’s no easy fixes, the sooner you will start improving.