Why Traders Fail

I have worked with traders for nearly 15 years, and there are many reasons why they fail. A few of the causes include: Taking on excessive risk, laziness, gambling, self-destructive tendencies, lack of intellect and stubbornness. But one of the most common (and least recognized) cause of failure is unrealistic expectations.

Many come into the market saying, "Golly gee, I just want to make 2% each month. Not much at all -- just 2%." Well, if you can do that, then you need to start a hedge fund because 2% each month compounds out to an annual return of more than 27%. That puts you in rarified air. The truth is that you will be down some months (but should never be down a lot), and you will be up big a few months. But most months, you'll just be hanging around. Maybe up just a bit; maybe flat; maybe down just a bit. Most traders make the bulk of their gains during a finite, countable number of periods. If you look back at last year's trading activity, you'll likely be able to point at times in the calendar when you made the big bucks. You'll be able to do the same thing at the end of this year....655 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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