Why Reddit User -Redfish Thinks 90% Of The Traders Fail?

I came across an interesting commentary online about why 90% of the traders fail according to Reddit user -Redfish.

It is no surprise that 90% of traders lose money. 90% of people who have tried to become good at anything have failed. Those failures are usually buffered by schooling: you fail early, and choose something different before you’re an independent adult. Trading is not like that at all.

There isn’t really a barrier to keep people out. You have the broker’s minimum deposit? You can put it in the market. You don’t need to do any training, you don’t need a degree or qualifications. There are no rules, and the possibilities are endless. So every Tom, Dick, Harry, and Jeanine with the broker’s minimum deposit can become a trader.

Think about your average person. Now, realize that half of all people are dumber than that. Add that to the fact that most people, especially those who would be attracted to trading, are more greedy than they are patient and you quickly have a recipe for disaster.

There are other factors here too. There is SO MUCH information on trading out there. 80%, at a minimum, is either complete bullshit or an incomplete distillation of the truth intended for newbies. When learning about trading, YOU have to constantly be searching for the ‘signal’ and separating it from the ‘noise’. That takes patience, intelligence, dedication, and a distinct control of greed. And those things are in short supply.

This commentary is in fact spot on. There are too many people who think of trading as one of the easiest ways to buy a couple of islands and private jets. They see all the scam artists masquerading as master day traders in popular social media platforms like Instagram. This entices them to put a little of what they have painstakingly saved throughout the years to play the markets. The result is as expected – they lose everything they put and then proclaim trading can’t be done. Some even jump into irrational conclusions like the banks are out there trying to triggers stops.

Quora: Are trailing stop losses ever useful for day trading?

I am having a hard time trying to understand this query. Why do you think that trailing stop losses or stop losses of any kind are useless? Trading without a proper stop loss is reckless.

Although stop losses are important, people often set them at the wrong place. So when the market runs over their stop losses every now and then, people jump into logical conclusions that the so-called smart money is manipulating the markets to trigger stop losses on either side.

This will in fact lead them to avoid using stop losses until the inevitable happens – one fine day, the market will surge or drop within a matter of seconds and the trader is left shell-shocked.

The stop loss you set, must be at a place that gives the market enough room to wriggle around.

Murrey Math Webinars

Back in 2009 / 2010, Murrey decided to do a couple of webinars. For some strange reason, he decided to post them publicly. You can find some of them over at murrey math webinars.

Sign up for a free account with 4shared.com so that you can download these webinars. Try to go through them over the weekend. Nothing revolutionary takes place in these webinars. In one of the webinars, you will notice that Murrey tries to do live trading – and as expected, the price keeps on exploding higher – causing frame shifts. Murrey casually asks the viewers to keep on shorting. And that small losses are essential for larger profits later.

This is one of the classical shortcomings of Murrey math. Rather than following the predominant trend, this method will tempt us to keep on shorting / buying when the prices surge / fall. In other terms, Murrey’s technics will work well when the market ranges. Once it breaks out / down, it pays to go with the trend.

Anyway, I will let the viewers be the judge.

Are The Stock Markets Random?

All over the world wide web, you are going to come across loads of explanations as to why the stock markets are random. The motive of many of these assertions is to imply that technical analysis is bound to fail over a lengthy period of time.

At the crux of such explanations lies the efficient market theory / random walk hypothesis. You cannot beat the market consistently – this is a highly simplified explanation of the random walk hypothesis.

Recently, I came across an excel sheet that can generate a chart – just like the charts made by financial instruments every day all over the world; the peculiarity of this excel sheet is that it generates charts based on coin tosses. Press the appropriate tab in the excel sheet and the same sheet will produce open, high, low and close values – all based on coin toss probabilities.

Use coin toss open high low close.

I think some of the visitors will find this excel sheet highly informative / entertaining.

Seen On The Web: Almost 80% of Private Day Traders Lose Money

I came across this interesting post in Reddit. Reddit user CuriousGnu did some analysis using the data taken from eToro social trading network to reach the conclusion the interesting conclusion that almost 80% of the private day traders lose their hard-earned monies.

Check out the original post at Almost 80% of Private Day Traders Lose Money

Murrey Math Trading Articles

Murrey decided to publish a series of articles in the Traders World technical analysis magazine a couple of years back. I have collected most of them and have posted it.

While going through these articles, you will notice that Murrey spends a great deal of time trying to ridicule every trader out there who does not follow his system.

His ramblings might be interesting to the traders who are interested to learn more about murrey math.

Download from https://mega.nz/#F!7sow2JhT!XkRKDYeknNEvlCOWmBW2AA

Use Sumatra PDF to view the files with DJVU extension.

Day Trading With The Trend Or The Importance Of The Opening Price

Traders have their own opinions about trading with or against the trend. Most of them will try to catch the tops or bottoms.

The rest will try to flow with the trend.

Although many traders are more than happy to dole out this advice i.e. trade with the trend, most of them (including me) have their own versions or definitions of the so-called trend. After all, what exactly is a trend and how do you determine it at any given point of time?

I have read in a few forums where traders chime in regularly that it is easy to determine the current trend of the market. According to these self-proclaimed experts, if the price or the candlestick chart is moving downwards from the left to the right, then the trend is down.

Likewise, if the candlestick chart showing the price is moving upwards from the left to the right, then the trend is upwards.

Do bear in mind that this is just a mundane explanation which may or may not help you in the long term.

If someone asks me about the trend, I just look at the current price of the instrument and compare it with the daily opening price of the same instrument. If the current price is above the open price, then the instrument has an upward trend.

If the current price is below the daily opening price, then the instrument has a downward trend.

Bear in mind that I took the daily opening price as the reference point because I am primarily a day trader. You can take the weekly, monthly or even the yearly opening price as the reference point in order to come to your respective outlooks about the instrument.

Upon closer inspection of the stock market prices, you can jump to a sane conclusion. Every day, there is an open price. As time progresses, the price will begin to float away from the opening price.

In other words, the price will either moves upward or downward throughout the day.

On trend-less / choppy days, the price will keep on making newer highs and lows throughout the trading period.

The beauty about taking into account of the opening price as the reference point is simple. This is the only price that remains the same throughout the trading period. However, the high / low / close price can keep on varying throughout the day.

Trying to take trading decisions based on these variables (high /low /close) will put your trading career in jeopardy. Focus on the factor that is constant every day. That is the opening price.

Once the market starts, they cant change the opening price. But the high / low and the closing prices will keep on changing.

Just take some time to think through all these. I am just trying to condense the intricacies of the stock market into simple and understandable terms.

Take any chart depicting any time period. Take a look at each one of the candlesticks. In every candlestick, the close price will be either above or below the opening price.

Yeah, on some days, the close price might be nearby to the open price. We call such days as choppy or trend-less.

My question to fellow traders is this – cant you use this point (the open price stays the same throughout the respective trading period) to make profits in the stock market?

Every day, the market shows the traders where to go long or to go short.

Go long above the open. Go short below the open. It cannot get simpler than this.

Once you begin to do this, trading becomes easy and less of a stressful activity.

Just think about it and let me know in the comments.

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