A statistic that is thrown around constantly is that eighty percent of all new businesses fail within the first two years.
What are the reasons that those businesses fail? Some of the issues are finances.
The company is underfinanced, or the person that opened the business is not sure how to take care of the money for the company.
Other problems that arise: the new business over extends itself and the company is not big enough to expand.
Failure in business is common and so is failure in futures trading.
There are so many ways traders fail, but there are four major reasons they fail.
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If you fail to plan, plan to fail. The tired cliché is true and has to be stated repeatedly. If the trader cannot figure out a strategy, then they will most likely fail.
There are chances a person can succeed at trading without a plan, but they may not have the success of the person that made a solid plan.
Even if your plan does not work, you can figure out ways to adjust your plan until the plan works. The good news for many strategists: many of the futures trading platforms allow the trader to practice their strategy without using their actual money and work out all of the challenges that arise from investing.
Lack of Consistency
Another cliché that has been repeated over and over again, because it makes sense: ninety percent of success comes from showing up. It does not matter what endeavor a person chooses to do, they will not have positive results if they do not participate in that activity on a consistent basis.
How many times would a person play a sport on the weekend? They show up every Saturday and Sunday ready to play several games over those two days, and they would do fairly well playing.
If you can show up and play softball every weekend, you can set aside a few hours a week to work on your strategy.
Besides working on your strategy you can also make a certain number of trades a week, it does not have to be huge amounts of trades or a large amount of money, you just have to do the same thing consistently week after week.
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Too Many Emotions
The market is a frustrating place. It does not matter if you are a futures trader or stock trader. It can be irritating. Sometimes the trader has a huge day and is the king of the world. There are other days where the trader cannot make a good decision.
When times are good, it is easy to believe that you cannot make a mistake, which could lead to making decisions that might have some risk, or more risk than you have originally planned.
Although risk is part of the market, if you are a new trader, certain types of risk may not be a good part of your strategy.
There are going to be times when nothing you do works. Trading is about statistics and sometimes you may not have the right timing. Because things are going to be negative, the trader cannot let it bother them, they cannot stop working.
Failing to be Students
Spend time every day trying to learn something new. Sometimes you may get new information from some of the old information that you have read previously.
As a trader, you can never learn enough about the market because it is always changing. The more you study the market and the different types of strategy’s that are in the market place, the more chances you have to create a successful strategy.
The chances of a person succeeding as a futures trader can be slim, because they will ignore the different things that can hinder their success.
Clichés about success have been around forever because they are true. A trader can fail more times than they succeed, but if you listen to those old time clichés there is a better chance of success.
There is also one last tip that is probably the most important tip that a trader can have, which is that a trader must be patient. Not everything is going to work, or it may not work as fast as you may want it to work, but if you keep working, success will come.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. Past performance is not indicative of future results. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.