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Unrealistic/irrational expectations from traders

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Unrealistic/irrational expectations from traders

Postby analyst75 » Tue Sep 26, 2017 2:03 am

“If there were a cornerstone to trading it would be the ability not only to be resilient when in drawdown but also to accept that we get things wrong. Sometimes there is a flaw in our methodology that we have not seen and that we simply have been lucky up until this point. This does raise the question of when do you know you have entered this spiral of self destruction and to my way of thinking the answer is not that hard. If you have been losing money for the better part of a decade then it is fairly obvious that there is something seriously wrong in your methodology.” – Chris Tate

Can you make 1,000% returns per year from trading?

I DON’T THINK SO.

Every so I often I am party to an email from someone who should know better. This particular email was around the topic of returns that could be expected from a novice trader. This email asserted that they were looking at the order of 1,000% pa, which in anyone’s language is a tall order.

I can understand how people get these figures in their heads, the internet is awash with people claiming that you can give up your day job and intraday trade FX with $5,000 and live like royalty with no risk. Intriguingly I have once again started receiving spam emails from people claiming that options writing is a no risk cash flow generating strategy.

As such it is easy to see how peoples psyche becomes infected with this sort of nonsense and how with little real world experience they are sucked in.

However I was curious as to what the numbers would look like if you were making 1000% pa so I fired up Excel and let it rip with a starting balance of 1,000.

Please check here to see the figure: http://tradinggame.com.au/i-dont-think-so/?utm_source=Blog+Subscribers&utm_campaign=782ff57c63-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_eb90516269-782ff57c63-43344013

I don’t even know how to say that last number. Suffice to say that somewhere around the first months of year 7 you are the richest person in the world and by the end of year 10 I think you have all the money.

Author: Chris Tate

Article reproduced with kind permission of: Tradinggame.com.au

Another great quote ends this article:

“You should spend a great deal of time and thought on your exit strategies, for one very good reason: you don't make money when you enter the market, you make money when you exit the market. Far too many people focus only on market entry, or what to buy, rather than on when to sell. If you approach trading with an exit strategy, it will benefit you right away.

Your system should reflect your beliefs (i.e., who you are as a trader and as a person). Many people are just looking for “any system that works,” but if your trading system doesn’t match your beliefs about the markets, you will eventually find a way to sabotage your trading.” – Van Tharp Institute


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Re: Unrealistic/irrational expectations from traders

Postby Daniel David » Thu Oct 05, 2017 7:10 pm

many traders come into forex trading with an unrealistic expectation. They think forex is a money machine. They furthermore require make their twofold in each tow or three days.
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Re: Unrealistic/irrational expectations from traders

Postby radex78 » Thu Oct 05, 2017 9:34 pm

Unrealistic target is making often fail on trading because in fact trend market easy to changed and if trader having tendencies to become greedy and not pay attention with the risk on trading hence usually will facing with failure and making them being emotion
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Re: Unrealistic/irrational expectations from traders

Postby William Bauman » Fri Oct 06, 2017 4:20 am

Most of the traders come into forex trading with an unlikely desire. They think forex is a money machine. They furthermore require make their twofold in each tow or three days. In like path toward the end they end up with an edge call. A sensible goal should be 3 to 5% consistently. There are not a lot of business where you can make these rate. My goal is in like manner like this. I trade with FXPM broker since it gives low spreads and a leverage of 1:500 anyway I use 1:100 for my trading.
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Re: Unrealistic/irrational expectations from traders

Postby radex78 » Fri Oct 06, 2017 9:44 pm

Forex is not easy way to get rich scheme, if many newbie they thinking forex is money making machine, hence forex will possible making them being bankrupt because this is risky, on trading if having target profit four or five percent is good manner, having too large target will rarely achieved and about psychology trading has high role in trading
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