Why Can’t I Make Money Trading?
I received the following from a struggling trader.
I feel like I am in your death spiral. I make some, lose some but my losses exceed gains and my account balance is slowly dwindling. Why can’t I make money trading these markets? I could use some help.
My reply
We are not in the business of being a mentor or educator but I will pass on some insights that will hopefully get you on the right course. I suggest spending time on global-view.com and see what experienced traders are posting on the Forex Forum and reading articles in our blog.
My suggestion is to do a self-evaluation and this involves answering your question with a series of questions for you to answer.
- Are you treating trading as a business or gambling?
- Do you feel your system or approach has potential to be profitable?
- Can you list the strengths and weaknesses of you system or approach?
- Have you made a business plan where you evaluate average profit vs average loss and percentage winners to losers?
- Are your trading ideas generally right or more times than not the wrong side of the market?
- Are you losing because your stops are too tight or too wide?
- Do you find your trading ideas are generally right but you are getting stopped out before they have time to work?
- Do you take profits too soon or and let losses run?
- Can you isolate any specific types of trades that tend to lose and what type of trades tend to win?
- Are you basing your trades on your analysis or emotion or gut feel (sound analysis is the correct answer)?
- Are you aware of upcoming news events?
- Are your trading results negatively impacted by news?
- Do you run positions into news events? If so, how do those trades work out?
It is important to do a self-evaluation to determine whether you have a business plan worth pursuing or whether you have to scrap it, tweak it or stop trading. I have listed some related articles that you should find useful
Knowledge is Power
How to Trade
Psychology of Trading
Jay Meisler, co-founder, global-view.com
jay@global-view.com
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