Why Many Traders fail to achieve consistent profit?

By | February 23, 2017

One of the main reason for not having consistency is  Trading, just because we are itching to do something. Traders just want to be in trade at any cost.

Our eyes should be focused on the future, and that is what trading  is all about. Following a strategy that beats the market “over time,” and protects capital during bad times.

Impulsive Traders is often used to describe traders who “can’t wait. They can’t delay; they’ve got to have it now.” So they are willing to forgo something better that comes later in order to get something right away.

Impulsive Trading is a trait which we need to let go if you want to be a profitable trader in long run. You need to wait for the trader to come to you and never ever chase the trade.

If someone offered you a choice between a smaller amount of money (3000) available immediately and a larger amount (10,000) that could be received after a specified delay (1 Week), which would you take?

90% of Participants Opted for Rs 3000/- and only 10% opted for 10000. The same mentality is visible in trading also, Most of traders are interested in day trading less reward and more stress and only few opt for positional trading where rewards are more and stress is less but you need to control your urge to be impulsive and hold on to trade.

Why is it people short term small reward and ignore the long-term big rewards which they can get just by waiting ?

Suppose you are on Weight control mode and someone offer you have 1 slice of Pizza or Chocolate cake. Most of people will go for it as they want instant nirvana. Most of people want for immediate returns as eating pizza right now is quiet satifying than waiting for a “delayed reward” of staying fit.

Same psychology is applied in market  the desire for immediate profits and fast winning trades lead people to focus there enegies on intraday trades where risk is much higher and in the process It clouds the real goal. Making large profits over time. A goal few traders ever achieve.

 

Always remember The market is unlikely to hand “immediate awards” on consistent basis, I have used the the term “CONSISTENT”, this is very crucial, If you see the current situation in market where stocks are moving 10-20% in intraday only , Reliance moved 10% Cadilla 22% Bharti AIrtel 10% just to name a few, but this will not go in forever. So if you get in habit of immediate returns you will always be chasing stocks and 1 bad trade will blow you off.

A winning trader must tirelessly execute a trading strategy that will often come into conflict with the emotions.  Stocks a trader is trading is not moving and other stocks are moving, You need to control your emotions and focus on your expertise rather than jumping from 1 stock to another or from 1 strategy to another.

If one is “expecting” an immediate reward, it can be frustrating and disappointing when it does not appear. That is why it is important to take the proper perspective with trading, and the proper perspective can only be based by looking at trading results over a long time frame.

2 thoughts on “Why Many Traders fail to achieve consistent profit?

  1. Suresh Pandian

    Thanks sir, after nearly a year of struggle in trading at last achieved a goal, its a profitable series, hope i can recover my lost capital, protect it and make some profit with discipline. Thanks to you, your guru and W.D Gann

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