What Most Retail Traders Do
The sad fact, most people become traders after they have lost their jobs
or sources of income and they’re now looking for a way out. When certain people
still have other sources of income, they won’t want to do anything with Forex –
until they lose those sources of income. That’s when they’ll begin to consider
trading as a viable option. As a result of this, they put unnecessary pressure
on themselves. Things are easier for traders who also have other means of
survival.
The principles that guarantee lasting success in the markets are
completely contrary to what many people want to hear or do. This is because
we’re not naturally wired to trade normally.
Most retail traders blow their accounts, replenish and fund, blow the
accounts again, and then replenish it, and then blow it again. This cycle goes
on and on. Whenever they think they have a better trading idea or software or
strategy, they fund the account and blow it again.
There are also retail traders who move from one broker to another.
Clearly, traders deposit more money than they withdraw.
Like I said in my previous articles, NEVER believe anyone who shows you
images/screenshots of winning trades. No matter how sweet-mouthed or
“professional” they seem to be. The realities are far different than what
they’re showing you, and even rookies can also make occasion profits by luck.
Unless they give you access to a demo account to monitor for 4 months, or
register a trading account on MyFxbook.com to give you a link to see it, which
shows the statistics and data of the trader’s speculative activities (hit rate,
RRR, Sharpe Ratio, expectancy, maximum drawdowns, biggest win, biggest loss,
consecutive wins, etc.), never believe them. Because they won’t post a
screenshot of losing trades.
A Challenge
If there is anyone here who wants to prove me wrong. That person would
need to give us access to an MT4 account that is at least 10 years old, and on
which an annual profits have been made for 10 years while placing a minimum of
4 trades per month (with no margin calls, but only occasional withdrawals of
profits).
Then I would tender my apology in this group, for saying that long-term
success is not possible.
But I bet that no-one; I mean no-one, can show me this. Where are the
gurus in the house?
BUT. You can say: PEOPLE ARE MANAGING MONEY FOR OTHERS AND THEY ARE
GIVING INVESTORS 20% PER MONTH.
Yes, there are many people doing that, but that is not sustainable.
Promising investors a certain amount per month is nonsense. How can you ever do
that in what you cannot control? If you could control the market to your favor
always, then you can tell investors that you will give them a fixed percentage
per month.
The truth is that, most of those funds managers will come up with monthly
drawdowns and they would spend a long time trying to recover the losses; whereas
investors won’t know. The managers will be using deposits from new clients to
pay old clients. And as long as they do this, new clients will keep coming.
This is a Ponzi scheme that is not sustainable.
Fact: Professional traders encounter occasional losing streaks and they
would spend weeks or months, trying to recover those losses, with hope of
moving ahead later.
If you’re the best trader in the world, you will have times when the
market will not be favorable to your strategy. The period may be short or long,
and it is recurrent. At times, you’ll find yourself spending weeks or months,
trying to recover recent roll-downs. There is no way around this. You have to
accept this fact or go do something else.
The only difference is that the best trader will eventually recover those
losses, no matter how long it takes, and then move ahead and make more profits.
Sooner, they encounter another roll-downs, and they stay on the defensive, as
long as it takes them to recover. They ultimately recover and make more
profits. The equity dips, grows higher, dips again, and makes another higher
high, and so on. This is the reality many people won’t accept, and failure to
accept that often results financial disaster.
Is There Any Hope?
Yes there is hope and a way out. All hope is not lost. My premise is that
if only 1% or 2% or 5% of all retail traders make money consistently, then you
should be one of them.
Yes, there is hope” The Ultimate Secrets to Consistent Profits” would be
revealed in the next article.
