We always hear how most traders fail. However, the truth is that most traders quit: they do not actually fail. Read on to learn the difference.
You see to fail at something then you must pursue something in such a way that it tells you that it is a failure– that it cannot work.
Sure, many traders have blown out accounts. But, to fail at something, you must pursue it in such a way that it tells you if you did everything right that it cannot work. If you break your rules, do not trade your method, over-leverage trades, do not take trades, and made other poor decisions then a blown out account does not tell you much.
Momentary detour, this is another reason to stop paying for futures tryouts. They are most definitely a scheme and, based on my experience, they do not care about traders.
And, I know what some of you are thinking, “Yeah I know I don’t have the edge to pass but if I could hit a good run then I can pass maybe 45% of the time”. The problem is that it puts you in a “likely to lose situation” which is not conducive to development. If you can develop the kind of ability required to pass then certainly you do not need their capital, you either can or cannot.
Now, in order, to fail you need to pursue something with a certain seriousness. So, if a trader blows out a tiny account then that’s expected: it doesn’t tell us very much, actually. Even traders who lose a ton of money but never traded their plan– again they haven’t failed. They blown their money and quit. You can blow your money on a lot of things.
So, yes very few traders have actually failed.
However, there are a few common themes as to what causes traders to quit:
It boils down to this really:
Trading success requires maintaining a long term focus. Most traders are short-term focused. Without a strong environment, like my Quantitative Collaborative or doing it at a professional level then most decide it is not worth it.
Notice, I am not saying the solution has to be my program. If you can find a better program, most certainly take it.
The two goals you must have are:
At least, these are my thoughts and my plan.
Have better insight to share? Let me know.
The author is passionate about markets. He has developed top ranked futures strategies. His core focus is (1) applying machine learning and developing systematic strategies, and (2) solving the toughest problems of discretionary trading by applying quantitative tools, machine learning, and performance discipline. You can contact the author at firstname.lastname@example.org.
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