The Top 3 Reasons Traders and Investors Fail, Part 1

Over the coming weeks I will offer you a no-nonsense, nuts-and-bolts look at the question of why traders and investors fail. I’ll highlight what I believe to be the top three requirements for success and why these are often lacking.computer.man.stressed

Much like the “chicken and the egg” argument, all three requirements I will examine are critical, and the lack of any of them will cause failure, just like removing one leg of a three-legged stool.

After years of seeing many issues in trading through the eyes of many traders (I used to own a trading firm with over 500 traders), I have come to one inescapable conclusion, something I now consider a fact:

Everyone who enters trading is exactly the same AND generally stays the same for a long time.

It is not until later in development that some traders break out into “unique” ground. So relax;  everyone has gone through what you have or are going through.

It’s very possible that you may not like the answers I provide; however, you need to hear them.

More Than Education

An education in technical analysis is absolutely needed, and most who really try to succeed eventually do receive that education. In addition, they receive enough to make them potentially successful.

This is the core of my Momentum Trade Alerts service . . .  education woven through real trading situations . . . a learn-and-earn philosophy.

Think about it this way: If you don’t know why you’re making money or losing, then you don’t know what you don’t even know. This is also known as the unconscious incompetence.

For those who do not get an education, that may be the biggest cause of failure. However, anyone can understand the education material once presented, and many who receive the education still fail. So, lack of education, while critically important, is NOT making my top three list.

I am going to assume you know to get an education; I will look at the top three reasons someone fails after getting an education. Let’s start with the first reason . . .

Lack of Discipline

This is  known as the ability to do what needs to be done, and to do it now. This is the No. 1 reason for trading failures.

Initially it may be the lack of discipline to take a stop. Later, it may be the lack of discipline to ride your winning trades to their potential targets.

Note that the trader knows what the stop is, and what their target is. This is why the “education” doesn’t make the list. The problem is that even those that know what to do and when to do it do NOT do it. That’s a lack of discipline at its finest.

It shows up in many other places as well.

Some lack the  discipline to review material learned. It amazes me that even people who  purchase memberships to trading and investing services like mine still don’t take the time to review the materials presented. Some would argue laziness and discipline to be interchangeable.

Others lack the discipline to review trades and make changes.

It’s the No. 1 Reason for Trading Failures

And finally there is the lack of discipline to honestly analyze your trades and determine you need an education. All of these key elements in trading are easily learned by someone who wants to learn them. However, they are not easily done.

Without question or hesitation, a lack of discipline is a No. 1  reason traders fail.

Do you suffer from a lack of discipline in your trading? Is it holding you back from your goals?

What are you going to do about it?

Send me an email at [email protected] and tell me about your discipline issues. I’m curious to know what’s holding you back (and yes, I will respond).

Published by Wyatt Investment Research at