Hi Traders, welcome back to another workshop. In today's workshop, I'll be sharing some personal perspective on why do most short-term traders lose money. I've been trading for over 5 years, and yet I've seen these repeated traits happen in most losing traders.
1. Sense of Urgency - Most traders approach the market with an expectation of low risk high return. Just ask yourself, who doesn't want to achieve highest possible return in the shortest period of time? Everyone wants to make money, but the main thing is the process. - How do you extract money consistently from the markets? How do you differentiate yourself from the 95% of the losing traders?
2. Risk Management - Risk Management is one of the key element to make sure you stay in the business as long as you intend. - Without a proper Risk Management, there's no way you can come out the markets long-term being profitable. - It also directly reflect your patience level, patient traders always have a fixed risk per trade to pre-define their risk, simply because they understand that the outcome of any single trade is random. The eagerness to get-rich-quick will often blind yourself from protecting your capital.
3. Trading without an Edge - Often new traders neglect the importance of having an Edge. An Edge simply means you are being confidence in a sense that you'd always come out profitable in the long-term. The outcome of any single trade is completely random, so stop focusing on the short-term result, and never switch your trading system purposelessly.
4. Mindset - Above all comes down to this one final key element, which is the proper mindset. - Always think in terms of probability and possibility. Having a realistic mindset motivates you to put in the necessary hardwork to achieve your goals, not by day dreaming.
Let me know your thoughts in the comments below.
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