cowmadagan
Sergeant
- Messages
- 393
Well...
The particular reason for failure really depends on your trading strategy. For example, if you like to hedge similar pairs, like going long in both EUR/USD and USD/CHF (that means you're betting both for and against the USD for those who don't know) and you get afraid before hitting your stop, you'll likely forget that you really don't know what's going to happen, and you'll close a position that might not be a loser. One big trick for not letting your fear overwhelm you to your disadvantage is to never talk to your wife when trading. Lock the damn door. Soundproof it.
On the other hand, I really guess that the vast majority of casual traders completely lose out due to innumeracy (like illiteracy, but with numbers). This would come up anywhere from undercapitalisation to 'hey..there's no way the pound could ever drop fifteen cents, so I'd rather wait without a stop loss'
Last, I guess that proprietary trading in most banks is done by graduates, and they treat their trades the same way as many people do on their demo accounts.
I know Forexwatchman recommends going to a nanolot account basically ASAP so that you take it seriously, but I think the baby in his thinking is that you have to really feel like the money in your demo or live account is real money. You lose 1K and that means you could've had a 37" TV in your bathroom, but you don't cuz you f'd up. The bathwater is when these prop traders at banks treat it like it's not their own money.
It's a simple enough mistake, and fear has a lot to do with why many people will be successful on their (fear-free) demo and then crash and burn when going live.
The particular reason for failure really depends on your trading strategy. For example, if you like to hedge similar pairs, like going long in both EUR/USD and USD/CHF (that means you're betting both for and against the USD for those who don't know) and you get afraid before hitting your stop, you'll likely forget that you really don't know what's going to happen, and you'll close a position that might not be a loser. One big trick for not letting your fear overwhelm you to your disadvantage is to never talk to your wife when trading. Lock the damn door. Soundproof it.
On the other hand, I really guess that the vast majority of casual traders completely lose out due to innumeracy (like illiteracy, but with numbers). This would come up anywhere from undercapitalisation to 'hey..there's no way the pound could ever drop fifteen cents, so I'd rather wait without a stop loss'
Last, I guess that proprietary trading in most banks is done by graduates, and they treat their trades the same way as many people do on their demo accounts.
I know Forexwatchman recommends going to a nanolot account basically ASAP so that you take it seriously, but I think the baby in his thinking is that you have to really feel like the money in your demo or live account is real money. You lose 1K and that means you could've had a 37" TV in your bathroom, but you don't cuz you f'd up. The bathwater is when these prop traders at banks treat it like it's not their own money.
It's a simple enough mistake, and fear has a lot to do with why many people will be successful on their (fear-free) demo and then crash and burn when going live.