Why do 95% of traders lose? - page 11
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It is better to think practically.
Let's say I choose a bank to open a deposit and I have a choice: to open a deposit near my home(work) - 10% per annum or to drive two hours to the bank at the other end of town - 10.5% per annum.
The difference is half percent, investing 100k in a four-hour trip (I will have to pick it up ;) ) I get 0.5k and investing 1k I get 0.005k - why should I spend four hours of my life for 5$ (I will have to pick it up as well ;) )?
OK, let's think about it practically from the point of view of the 5%.
1. With 9-12% growth per year, as a rule, you should hold it for years (you can deposit additionally, but you cannot withdraw it) and treat it as a financially stable deposit. By simple rules of B.Shefer need to divide number 72 by annual % to know how many years it is necessary that would double contribution.
Would you prefer every 7.2 years or every 6.85 years?
2) And for investment, I suppose you should consider an increase of more than 30% per year.
3. "One becomes rich not because of income, but because of savings....Frugality is an important virtue of all rich people".
OK, let's be practical in terms of the 5%.
1. With an annual growth rate of 9-12%, as a rule, you have to keep it for years (you can invest additionally, but you cannot withdraw it) and consider this deposit as providing financial stability. By simple rules of B.Shefer need to divide number 72 by annual % to know how many years it is necessary that would double contribution.
Is it better every 7.2 years or every 6.85 years?
2) And for investment, I suppose you should consider an increase of more than 30% per year.
3. "One becomes rich not because of income, but because of savings....Frugality is an important virtue of all rich people".
1. It depends on the country... If it's in Russia, the offers are different. If a good offer appears, then I split the period - I choose top-up deposits and open several contracts at once, so that I can switch if the rate will be as interesting by the time the contract expires. Again, I lose half percent, but I get an opportunity for fast maneuvering.
2. where do I get a guarantee of 30% a year? Investments involve risks, and here, of course, it also matters to lose 1k or 100k, albeit with an opportunity to earn 30% in both cases.
3. Money to money.
1. It depends on the country... If it's in Russia, the offers are different. If a good offer appears, then I split the period - I choose top-up deposits and open several contracts at once, so that I can switch if the rate will be as interesting by the time the contract expires. Again, I lose half percent, but I get an opportunity for fast maneuvering.
2. where do I get a guarantee of 30% a year? Investment involves risks, and of course it also matters to lose 1k or 100k, albeit with an opportunity to earn 30% in both cases.
3. Money to money.
Considering the fact that I have a lot of questions and while I'm on my way to that 5%, I will say the following:
1. We always have enough reasons not to act as we should. It's not worth considering % below the inflation rate in the country.
2. There are and will always be risks, even keeping funds in a safe deposit box also carries some risk - theft, inflation, etc. The main thing is to define the way of achieving your goals and to move in the right direction. 3.
What is true is true! 3.
1. there are no more deposit offers above inflation ;) Expected because of lower inflation, yeah.
2. There are always risks, but deposits are covered by DIA, which significantly reduces the risks.
They say that 95% of traders lose money in the long run (i.e. they can win for a month, half a year, a year, but after a while they still lose their money) .
Can anyone properly explain the reasons why they lose money?
..Emotions, not following the MM, not following trading tactics and changing it during trading - all that, but there are a lot of robots in the market that do not have those human characteristics. So who can tell the real reasons why people and robots lose money on the markets? Still, 95% of traders who lose money, I think that's a lot.
"They say that 95% of traders lose money in the long run ( i.e. they may win for a month, half a year, a year, but after a while they still lose their money)" - they answered themselves, those 5% cut down (lucky), and then they write books and give lectures and do not trade seriously anymore))
"Can anyone properly explain the reasons for losing money?" - One single one - the market has a negative mathematical expectation - it's a lottery. Put a huge number of people (millions, millions, ...) in a huge stadium and let them play heads or tails, all the time there will remain a small percentage of players who guessed an untold number of times. This is the 5% of "gurus" - which have applied unknown theories, and "for this" are ahead of the whole planet))). All that remains is to competently "develop" these theories and earn dough for teaching them to others): There are of course variants of stable income - insiders or some system "not working out" and "gaps" at the micro level, some trading rules for the select few, which is so successfully used, for example, by HFT-people)):)
"They say that 95% of traders lose money in the long run ( i.e. they may win for a month, half a year, a year, but after a while they still lose their money)" - they answered themselves, those 5% got cut off (lucky) and then they write books and give lectures and do not trade seriously anymore))
"Can anyone properly explain the reasons for losing money?" - One single one - the market has a negative mathematical expectation - it's a lottery. Put a huge number of people (millions, millions, ...) in a huge stadium and let them play heads or tails, all the time there will remain a small percentage of players who guessed an untold number of times. This is the 5% of "gurus" - which have applied unknown theories, and "for this" are ahead of the whole planet))). All that remains is to competently "develop" these theories and earn dough for teaching them to others): There are of course variants of stable income - insiders or some system "not working out" and "gaps" at the micro level, some trading rules for the select few, what is so successfully used, for example, by HFT-people)):)
There are a very large number of factors that influence deposit losses. One of the main ones is Human Psychology in general. Hence the nature of behavior when trading on the financial market. To all this the Psychology of the market as a whole is a great vortex! Like the water cycle in the nature. In fact it is not surprising that 95% lose deposits one way or another, the question is how much they earned before their final loss. In order to be among those 5% who allegedly "do not plummet" and continue to earn for many years - you need to gain experience, being among those 95% of people. It was and is, a kind of substitution process. Most people due to their character are not ready to accept it, and moreover they do not make conclusions, analysis and work on their mistakes, in addition to that they become skeptics. To be a successful trader and always be in the top 5% is a reward for your work and efforts. Perhaps, if you are by nature a psychologically strong person and always stick to a strict discipline and rules, then you will be in the 5% without having been in the 95%.
I also read a legend somewhere that a secret chip has been developed that steals traders' grails - and they stop working.
There are a very large number of factors that influence deposit losses. One of the main ones is Human Psychology in general. Hence the nature of behavior when trading on the financial market. To all this the Psychology of the market as a whole is a great vortex! Like the water cycle in the nature. In fact it is not surprising that 95% lose deposits one way or another, the question is how much they earned before their final loss. In order to be among those 5% who allegedly "do not plummet" and continue to earn for years - you need to gain experience, having been among those 95% of people. It was and is, a kind of substitution process. Most people due to their character are not ready to accept it, and moreover they do not make conclusions, analyze and work on their mistakes, in addition to that they become skeptics. To be a successful trader and always be in the top 5% is a reward for your hard work. Perhaps, if you are by nature a psychologically strong person and always stick to a strict discipline and rules, then you will be in the 5% without having been in the 95%.
i'll give you the grail* - if you can't trade profitably, don't trade
if you can trade profit for a week, take a profit.
You have to work with what you've earned, not with what you've borrowed.