It is a statistic cited in the industry in the region of 90-95% of traders and investors in financial markets do not. Conceptually, the trade appears to be an easy exercise. With the wisdom that the price swings are easily identifiable and, therefore, must be profitable, yet over the failure rate shows this is far from truth. A spectator might conclude that this group of players who must be low intelligence, even stupid, considering that many within it will continue this exercise in vain year after year, repeatedly following the same path .
Albert Einstein once said: " The definition of an idiot; someone who repeatedly makes the same thing, but expects different results, not learning from experience ". However, this group is going to convince themselves that
* is part of the educational process,
* next system / methodology will be different - that work,
* I am determined not to resign, I am not a failure and ultimately If successful, I
* unlucky
...... the list could go on.
However, far been of low intelligence or stupid, the profile of this group is, in fact, more often than not one of the well-educated professionals, middle-class, business success or People career medium to high net worth. Typically, they are successful in other areas of life, especially in your career or business, but not to make a successful transition to a commercial career. Moreover, they spend huge sums of money in general education, trader accumulating a vast library of books and attend numerous trade training courses and expensive, however, still not continuously. With these apparent advantages, why is that they still do not (and often dramatically) over an extended period of time? The answer is that they attribute the failures to bad aspect of trade in incorrectly and focus on resolving this. The 3 main aspects of the negotiation are: *
the " " Psychology of negotiation,
* " Methodology " or systematic approach to entering or leaving offices,
* & ; quot; Money Management " of funds.
However, most people are focused almost exclusively on the methodology " " (or system, often using mainly technical analysis) and give scant regard to the other two between themselves and most important elements. Consider a " " system that has a win / loss ratio of 50% and also a risk / reward ratio of 1:1. This hypothetical system is equivalent to throwing "-to-currency " and, as such, ignoring transaction costs, is limited to deliver returns and breakeven point, however, it is an inherently better performance than most traders trading hopefuls.
Most would say (probably correctly) that, based on knowledge and experience in studying technical analysis to its first victory / loss ratio was better than 50 %. That is, when planning and enter a trade that have used their skill and judgement to ensure that more often than not move in the direction they want. (If this were not true that you can also throw a coin to determine when to trade). Only a modest increase in throwing a coin, say 60%, which means achieving 6 out of 10 shops winner should be easily achievable by applying a little knowledge.
Secondly correct, which argue that they can plan a trade that would have a minimum Initial risk / reward ratio of 1:2, ensuring that, on average, trade winner would be twice as profitable as any to lose. Given only a modest gain / loss ratio of 60% and a risk / reward ratio of 1:2 most traders would be happy with this achievement (certainly as a launching point for a successful career full-time) . If most traders glued to their " " rules that probably could, in fact, achieve results comparable however, in practice, other factors take over, greed, fear, ego, hesitation, hope ......
Whatever the good intentions of the original plan, the " quickly " Psychology of negotiation becomes the most important aspect. It is a person of personality traits that are ultimately determine the success or failure in implementing any system or methodology. In short, do not stick to the plan for a variety of reasons well documented. This also has a dramatic impact on the " money management " trade. It becomes non-existent, non-quantifiable and, of course, impossible to evaluate the risk to move forward when trade has become virtually style arbitrary.
If aspiring traders only critically analyze recent trades to classify if it were done the system that failed or was not in implementing the standards, then much progress would be made. However, this leads to another failure of novice traders that a negotiation log / diary rarely allowed to keep this crucial evaluation.
Final Comments
Overall, rarely miss traders make the step up to a full-time professional trader because when the performance of a system does not match the expectations they discard it and move onto its side " " system. However, is often not the system that is to blame, but the application or adherence to standards system.
If a trader who has spent a number of years unproductive pursuing this path of trying to find that allusive & ; quot; " system that works, then most likely that the problem lies within rather than selecting a system. If this applies to you then get those old books trading below the platform and focus more on the psychology of trading and money management, you know that the chapters that more jump and felt that they were not relevant to you ! If you want to succeed need to reassess their viewpoint and only then can enjoy the wealth and lifestyle that offers a full-time professional trader. An effective trading system is only the beginning and offered consistent results in any market, it is recommended a methodology below.
Choose (system) that works, stick with it and being disciplined in their implementation to ensure the success that has eluded him for so long. Its rebirth as a trader begins now.
(Take a look at " The 5 day fast Forex Course " - http://www.RapidForex.org
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