4 Mistakes in Strategy Trading

Why do great traders continue to profit year after year while newcomers lose everything in the first few months? What do the majority of newcomers get wrong? How do successful traders know when they've made the right decision?

My colleagues and I are frequently asked for advice on how to be successful traders. Indeed, we've been asked this question so many times that I've decided to publish a trading report; a report that will provide you with plain and easy-to-follow guidance on how to improve your trading skills.
Now imagine the feelings of a trader who spends years studying price movements, buying expensive indicators, following expert advice, and attending seminars. However, this trader keeps losing money until all their savings are gone. He then raises more funds, loses everything again - all the time wondering why, contrary to all the guru promises, he can't turn trading into a profitable business. Nevertheless trading is just as understandable, predictable and profitable as any other business.
Not only beginners but also 'experienced' traders tend to ignore or forget about taking steps to protect their capital against these types of catastrophes - until disaster strikes. By then it's too late and the damage is done.
Take a look at these statistics:
90% - 95% OF ALL TRADERS LOSE MONEY (Source: Ryan Jones, the author of The Trading Game, Playing by the Numbers to Make Millions)
70 percent of day traders lose money (Source: 1999 study conducted by the North American Securities Administrators Association (NASAA))
95 percent will fail in the first two years (Source: Harvey Houtkin, February issue of Securities Regulation and Law Report)

The information shown above clearly demonstrates that the majority of consumers misjudge the risks associated with trading. Most of the time, people are just deceived by broker and consultant advertising. Brokers, on the whole, are unconcerned about your long-term performance because their purpose is to swiftly recoup the money spent on acquiring a new customer. That's why they encourage you to get started trading right away. To achieve this purpose, brokers supply new traders with just enough information to conduct transactions (and hence earn the commissions that brokers rely on) and then let them go blind in the market. Such shady tactics have drew the notice of a number of government bodies tasked with overseeing and regulating securities trading. Regrettably, little progress has been made in putting a stop to these abuses.

The unfortunate reality is that the majority of trading gurus promote trading strategies that do not work. Of course, these strategies are touted as not only effective but also lucrative. A potential customer is usually shown the few times when an indicator (or another analysis approach) has correctly predicted a favourable trading opportunity. All of the instances where the strategy resulted in disastrous trades are left out of the picture.

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