HomeECONOMIC & FINANCEWhy Most Traders Never Succeed?

Why Most Traders Never Succeed?


Most traders never succeed because they trade without a quantified system with an edge, they trade too big, and they trade based on their emotions, ego, and predictions not price action. This is the opposite of what is needed to be a successful trader. A successful trader uses a quantified system with an edge, trades it with proper position sizing, and follows it with discipline regardless of how they feel or what their opinion is.

What Percentage of Traders are Successful?

Many studies point to research showing 90% of traders lose money and only 10% are profitable. I would add that only 1% are very successful making life changing money. 

Most traders start with the dream of getting rich quick and thinking that trading is easy money or that they are special and talented.

40% of people trade for only one month.

80% of new traders quit within the first two years.

Only 7% remain after five years.

Trading is a professional endeavor with a low barrier to entry causing a high losing rate. Unlike professional sports, medicine, and law that requires years of preparation and education you can open a brokerage account and start trading the same day with no experience or education against professionals. There is a high losing rate in all professional fields when counted from the start to the final success of making money. Why would trading be any different?

What Causes Traders to Fail?

Most traders fail because they don’t put in the time and do the work to learn how to be a profitable trader.

They risk too much to make too little. They have no edge and act like gamblers playing into the hands of market, buying high and selling low.

They have no edge and the odds are against their success over the long term. They focus on their own opinions, predictions, and are led by how they feel and not focusing on what is actually happening in the market.

5 Reasons Why Traders Lose Money

  • They try to pick tops and bottoms on charts instead of trading the swings and trends as they occur.
  • They take profits too early worried about losing their small profit so they miss the big profits.
  • They hold losing trades hoping they go back to even so they can get out and turn small losses into big losses.
  • They are bullish in bear markets and bearish in bull markets.
  • They trade so big that a few losses give back any profits eventually.


How To Win the Game Of Trading

Most studies show that 90% of traders and investors don’t make money over the long-term. The majority of traders, even if they get lucky and profitable early just give back those gains over time. Even buy and hold investors can become shaken out of their long-term plans to not sell when a vicious bear market takes back years of gains. 80% of traders also tend to just quit altogether during their first two years of learning lessons the hard way. Most traders don’t really fail they just quit too early and never even to the work required to even try to be successful.

Most Traders Lose Money, Why?

Most traders DO lose money. Social media makes it look easier than it is because so many people are posting their winning trades. Availability bias is believing information you see most. Seeing it most doesn’t make it true. Losers just tend to be less public about it.

Most important lessons learned early on in trading

Here are five of the most important lessons I learned early on in trading that could help others just getting started or traders that are frustrated not being able to achieve profitability.

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