a very amusing fact always perplexed me till i found my own answer to it.
the dilemma is this : markets can either go up or down. a trader can only be long or short. this makes it 50% assured chance of winning. then how come traders not winning at least 50% of the time and how come 90% (if not more) of the traders losing 90% of the time (if not more)!
well, the following is my explanation to myself (to the extent i have been able to decipher it)
reason 1 : traders avoid seemingly "losing trades" which, in reality, are actually not "losing" setups. this accounts for 50% of the trading opportunities for the eyeballs and brains...out-rightly missed.
reason 2 : traders lop-up the seemingly "winning trades" which are actually "set-up" traps. this accounts for the remaining 50% of the trading chances. perfect 100% open heist.
reason 3 : and if at all, the traders escape the first 2 reasons, this one traps them comprehensively. traders chicken out of profitable trades too early and get frozen in the losing trades. and those who still escape, they get trapped while trying not to book profit too early and trying not to book loss too late.
these 3 perfectly explain why 97% of the traders lose and to the extent they do.
in these very reasons lie the strategy of the operators as also the solutions for the traders who want to buck the overwhelming odds of a very favourable set-up on the face of it!
most traders have a mental unwritten flexible soft approximate rough ad-hoc system.
better than having no system at all.
the only trouble is that it being mostly in the air that is where it goes amidst the psychological shocks inevitable in the market....besides remaining largely primitive because of poor chance of it being improved because of it not been in writing for scrutiny.
a loss remains mostly an experience to be forgotten and overcome instead of being a feedback for improvement and adjustment of the system.
the dilemma is this : markets can either go up or down. a trader can only be long or short. this makes it 50% assured chance of winning. then how come traders not winning at least 50% of the time and how come 90% (if not more) of the traders losing 90% of the time (if not more)!
well, the following is my explanation to myself (to the extent i have been able to decipher it)
reason 1 : traders avoid seemingly "losing trades" which, in reality, are actually not "losing" setups. this accounts for 50% of the trading opportunities for the eyeballs and brains...out-rightly missed.
reason 2 : traders lop-up the seemingly "winning trades" which are actually "set-up" traps. this accounts for the remaining 50% of the trading chances. perfect 100% open heist.
reason 3 : and if at all, the traders escape the first 2 reasons, this one traps them comprehensively. traders chicken out of profitable trades too early and get frozen in the losing trades. and those who still escape, they get trapped while trying not to book profit too early and trying not to book loss too late.
these 3 perfectly explain why 97% of the traders lose and to the extent they do.
in these very reasons lie the strategy of the operators as also the solutions for the traders who want to buck the overwhelming odds of a very favourable set-up on the face of it!
most traders have a mental unwritten flexible soft approximate rough ad-hoc system.
better than having no system at all.
the only trouble is that it being mostly in the air that is where it goes amidst the psychological shocks inevitable in the market....besides remaining largely primitive because of poor chance of it being improved because of it not been in writing for scrutiny.
a loss remains mostly an experience to be forgotten and overcome instead of being a feedback for improvement and adjustment of the system.
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