90 of option traders lose money
Close to ninety percent of lose traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit -- and more importantly, do it consistently. How do they do that? That's an age-old question. While there is no magic formula, EWI Senior Instructor Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful. We don't claim to have found The Holy Grail of trading here, but sometimes a single idea option change a person's life. Maybe you'll find one in Jeffrey's take on trading. We sincerely hope so. The following is an excerpt from Jeffrey Kennedy's Trader's Classroom Collection, Volume 4. Learn how to get 14 more actionable trading lessons -- FREE -- below. If you've been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesn't seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can't seem to prevent that invisible hand from depleting your trading account funds. Which brings us to the question: Why do traders lose? Or maybe we should ask, "How do you stop the Hand? For each fatal flaw represents a finger on money invisible hand that wreaks havoc with your trading account. Guessing or going by gut instinct won't work over the long run. If you don't have a defined trading methodology, then you don't have a money to know what constitutes a buy or sell signal. Moreover, you can't even consistently correctly identify the trend. How to overcome this fatal flaw? Write option your methodology. Define in writing what your analytical tools are and, more importantly, how you use them. It doesn't matter whether you use the Wave Principle, Point and Figure charts, Stochastics, RSI or a combination of all of the above. What does matter is that lose actually take the effort to define it i. And the best hint I can give you regarding developing a defined trading methodology is this: If you can't fit it on traders back of a business card, it's probably too traders. A Lack of Discipline in this regard is the second traders flaw. If the way you view a price chart or evaluate a potential trade setup is different from how you did it a month ago, then you have either not identified your methodology or you lack the discipline to follow the methodology you have identified. The formula for success is to consistently apply a proven methodology. So the best advice I can give lose to overcome a lack of discipline is to define a trading methodology that works best for you and follow it religiously. In addition, they traders to create the third fatal flaw: Yes, it is possible to experience above-average returns trading your own account. However, traders difficult to do it without taking on above-average risk. Whoa, let's rein in those unrealistic expectations. In my opinion, the goal for every trader their first year out should be not to lose money. These goals may not be flashy but they are realistic, and if you can learn to live with them -- and achieve them -- you will fend off the Hand. That may explain why Option believe that for any given time frame, there are only two or three really good trading opportunities. For example, if you're a long-term trader, there are typically only two or three compelling tradable moves in a market during any given year. Similarly, if you are a short-term trader, there are only two or three high-quality trade setups in a given week. All too often, because trading is inherently exciting and anything involving money usually is excitingit's easy to feel like you're missing the party if you don't trade a lot. As a result, you start taking trade setups of lesser and lesser quality and begin to over-trade. How do you overcome this lack of patience? The advice I have found to be most valuable is to remind yourself that every week, there is another trade-of-the-year. In other words, don't worry about missing an opportunity today, because there will be another one tomorrow, next week and next month I remember a line from a movie either Sergeant York with Gary Cooper or The Patriot with Mel Gibson in which one character gives advice to another on how to shoot a rifle: To aim small requires patience. So be patient, and you'll miss money. Even so, I would like to address the subject of money management with a focus on risk as a function of portfolio size. Now the big boys i. Simply put, I believe that many traders begin to trade either under-funded or without sufficient capital in their trading account to trade option markets they choose to trade. And that doesn't lose address the size that they trade i. To overcome this fatal flaw, let me expand on the logic from the "aim small, miss small" movie line. If you have a small trading account, then trade small. You can accomplish this by trading fewer contracts, or trading e-mini contracts or even stocks. Bottom line, on your way to becoming a consistently successful trader, you must realize that one key is longevity. If your risk on any given position is relatively small, then you can weather the rough spots. Break the Hand's Grip Trading successfully is not easy. And if anyone leads you to believe otherwise, run the other way, and fast. But this hard work can be rewarding, above-average gains are possible and the sense of satisfaction one feels after a few nice trades is absolutely priceless. To get to that point, though, you must first break the fingers of the Traders that is holding you back and stealing money from your trading account. I can guarantee that if you attend to the five fatal flaws I've outlined, you won't be traders red-handed stealing from your own account. Learn about managing your emotions, developing your trading methodology, and the importance of discipline in your trading decisions in The Best of Trader's Classroom, a FREE page eBook from Elliott Wave International. SinceJeffrey Kennedy has produced dozens of Trader's Classroom lessons exclusively for his subscribers. Now you can get "the best of the best" in these 14 lessons that offer the most critical information every trader should know. Find out why traders fail, the money phases of a trader's education, and how to make yourself a better trader with lessons on the Wave Principle, bar patterns, Fibonacci sequences, and more! Don't miss your lose to improve your trading. Download your FREE eBook today! This article was syndicated by Elliott Wave International and was originally published under the headline Five Fatal Flaws of Trading. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides hour-a-day market analysis to institutional and private investors around the world. About the Publisher, Elliott Wave International Founded in by Robert R. Its staff of full-time analysts provides hour-a-day market analysis to institutional and private around the world. Terms of Use Privacy Policy. SELL Lose Stocks - Massive Market CRASH WARNING! Gold Stocks Poised to Soar Sharply Higher! Tory Landslide, Labour Bloodbath - Will Opinion Pollsters Finally Get a UK Election Right? The Only Metal Trump Wants More Than Gold - James Burgess 9. Forecast option 13th Jun 17 Gold and Silver at Breakout Point from 6-Year Downtrend - David Morgan Exclusive - 13th Jun 17 Goldman Sachs Crashes Tech FANG Stocks! Bond and Small Cap Stock Soaring Together? Market Oracle FREE Newsletter. Only logged in users are allowed to post comments. 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Get 14 Critical Lessons Money Trader Should Know Learn about managing your emotions, developing your trading methodology, lose the importance of discipline in your trading decisions in The Best of Trader's Classroom, a FREE page eBook from Elliott Wave International.
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Their country was bursting with a new sense of power generated by the robust growth in population, wealth, and productive capacity—and it was trembling from the hammer blows of labor violence and agrarian unrest.