Day Trading Stocks - Why So Many Day Traders Lose?

By John McLaughlin

Most trading is done emotionally charged where traders find themselves overwhelmed with information from all directions.

In this mood, you can feel out of control - not knowing where the markets and stocks will take you or do to you next.

Unlike the tech rally days, where winning was virtually effortless and all you needed to do was get on the bus for the ride, winning in the current market is rare. Rather than winning a lot, you now experience losing a lot - for many, losing over and over, it seams, without end.

Or, if you are one of those who choose to stand aside, not really knowing what or when to trade, you find yourself bored, trying not to fall asleep at the switch. And, at the center of all this, as you try for any bit of success, you often feel drained - stressed, too frequently getting upset then angry.

Over the long run you begin to feel demoralized and deenergized - with a sense of embarrassment (as you think about how you will explain your plight to others), feeling like you are a failure as you reflect on the past months/years - you frequently think, your dream of success may never be realized. Not a pretty picture.

The Old School Trading Game:

Listen carefully to what I want you to hear: the old trading Game, as you and I know it, has gone the way of the Model A (Model A Ford, that is).

The old school, obsolete trading game is still used by most. Did I say over 90% of the traders out there? It's offered in all the day trading courses, seminars, and Web sites - you name it.

Yet losers (innocently, stubbornly, and arrogantly) persist in playing an obsolete trading game - thinking, hopefully (as usual), that somehow they will be able to win again. Losers are completely unaware that their old trading game, has changed to their guaranteed disadvantage.

You need evidence, proof? You don't need proof. Just look carefully at your bottom line results—after overhead, after paying yourself, of course.

The old school trading game, as you and I know it, is dead. The difference between winners and losers? Losers are blindly refusing to accept their fate.

It's time (actually, long overdue time) for losers to move on to the new day trading game, a new trading system, trading approach and perspective, and the trading tactics winners use to play to consistently win. But, losers have no where to turn for help. Not any more. Hedge Funds, the Winners, & all the Losers:

OK, I’ll tell you why you lose so much.

Those who know first hand about the game winners play are those who in fact invented it -the hedge fund managers.

“Quant funds run by top names (Goldman, Renaissance Technologies, D. E. Shaw, to name a few).” “Some of the biggest names in hedge fund investing — Renaissance Technologies, D. E. Shaw, AQR Capital Management — practice what is called quantitative investing, using computer models to buy and sell thousands of stocks (and bonds and derivatives and commodities and currencies and country indexes and just about anything else that can be traded).”

“These funds use these quant models to run what are called in the business “market neutral” hedge funds, meaning that their gains (or losses) are not dependent on whether the market goes up or down. “

Big money, billion dollar hedge funds, at the top of the trading food chain, hire brilliant scientists, “quants”, to design quantitative software (using mathematical models) to take out the little guys, the crowd of losers, like you and, at one time, all the traders here at Day Traders Win, especially me.

The real fun happens when these hedge funds go at it head to head, feeding off each other, causing highly volatile markets and wild swings in stock prices.How can they do this, you ask? I just told you. Let me go into more detail. Big money uses what all of what losers know—against them.


Hedge funds, knowing what you know, knowing even what other hedge fund managers know, design their software for the kill.

What they do is quite simple. They design their software to take out those who continue rely everything taught in all the books, courses, and workshops - all the so-called valuable knowledge being offered and digested from a myriad of sources.

Hedge fund software designers use this knowledge base of information and experience to take out the crowd of losers, over and over again. Their advantage has little to do with fundamentals and all to do with the technicals, or should I say, taking advantage of the technicals every one commonly relies on to win - but mostly lose.

Losers don’t have a chance of winning against this new hedge fund trading game. While losers go on trying to figure out why they lose so much, the big money traders go on winning. Hedge fund software designers have them in their sights for their next kill.

Most losers appear blind to this "software is king" phenomenon, without a clue about how the hedge funds’ software Kings have change all forms trading (extremely short term day trading to long term investing). In just the past few years the trading game has been turned on it’s head.

The trading game has been changed - forever.

Losers push on, relying on their obsolete trading game (their biased trading perspective, their sick trading systems, and execute their trades with dreadful outcomes) - yet continue to be killed by the big boys.

Losers refuse to accept the fact that their game is a trap for more boredom, frustration, losing, and both personal and financial suffering.

For those blind to this phenomenon, losing goes on unabated. For those who wake up to what’s really going on, they need to learn to trade to win all over again.

The question for losers - what can I do about all this.

Day Trader - Consultant/Coach

Over 20 years expertise: banking, real estate, senior executive, and now working with Day Traders who are not at all satisfied with their trading confidence, competence, and financial performance.

Article Source:

No comments: