Why 95% of Day Traders lose their money

WHY?

As a day trader you are competing against robots, algorithms,  professionals and large trading firms for profits in the markets. If you hope to make money you will need to operate like a business and not like a gambler. Success in day trading will require planning, speed of execution, and emotional discipline to compete. A day trader must have a plan on how they are going to execute each trade in real time. You must be precise on what signals you to get into a trade on the intraday chart-

Entry signal: You must know clearly at what price you plan to enter your trade

Exit signal: Quantify when you will get out of a day trade. Will it be at a loss of support, a profit target reached, a specific price level

Stop placement: You must either have a mental stop, a stop loss entered, or a time stop . At what level will you know you’re wrong about the trade

Position sizing: You must determine how much trading capital you are willing to risk on any one trade before you decide how many shares to trade

Risk management parameters: Plan how much capital you are willing to lose if all your open trades go against you at the same time. If you want to avoid the risk of ruin never risk more than 2% of your total trading capital on any one trade

 

CONCLUSIONS:

 

Trading With No Edge

Many traders don’t understand what it means to have an edge in trading. An edge is simply an advantage in the markets that over time allows your winning trades to add up to more than your losing trades. There are potential edges day trading in every market, the hard part is both finding them and then trading them with discipline. An edge is where you profit off of the mistakes of others.

But no single trading strategy lasts forever. Some are designed for a range-bound market and others for a trending market. As soon as market conditions change, a trader should be smart enough to choose a more favorable strategy. New traders would be wise to have more than a few uncorrelated techniques and strategies up their sleeves. You need to understand correlation in trading and how to mix strategies with different time frame, different markets, and different directions. Make sure you have a plan and only trade strategies that are back tested and quantified, and that you are diversified in terms of trading many uncorrelated strategies.

Accept that losing trades are part of the game, thus you need to control your losses.

 

Our Forecast Strategy

Our forecast strategy is based on tools such as Elliott waves, Fibonacci, RSI, Stochastic RSI, Trend Line, Pivots, and Correlation with market drivers. It's a lot of daily work from a very technical team of analysts. With the daily work of a single analyst, it is almost impossible to forecast for several instruments.

• Markets can change in a few minutes on H30, H1. Thus forecasts are rarely consistent with the 60% success probability, which is the minimum required for trading.
• In H4 (Swing Trader) the probability of 60% is much more consistent
• In D (Swing trader and Position trader) the probability goes to 70%
• In W (Position trader and Long term investor) the probability goes to 75~80%