Why Most Traders Can’t Stick to One Strategy

One of the major reason of most traders remains unsuccessful in trading because of they can’t stick to the one strategy. Many traders look for the one perfect strategy which has 100% win rate in the market, instead of working on one strategy. Many traders abandon their strategies after the few losses and jump to the other strategies.

However at some point every trader finds a backtested strategy which has good win rate in the market. But when real money involves, emotions take over the decision and it leads to jump the one strategy to another. Meanwhile this is the never ending process. Because the losses are inevitable in trading. And changing the strategy after the few loss goes on.

Moreover than anything trading test psychology and discipline at every stage of the trading.

The illusion that a “better strategy” exists

There is no perfect system in the trading exist. Because there is no strategy in the market which can avoid the losses. In the false hope of finding the better system or strategy traders often increases their losses. However this illusion never ends until the remain undisciplined in the markets. They always consider their mistakes as the strategie mistakes. So rather than working on themselves, they start to look other strategies.

The Analysis Of Illusion

Intricacy vs Iteration: However repeating the same process and strategy everyday may feel boring or less productive sometimes. On the other hand, complexity give fake signals of feeling progressive. Tyring the new indicators, learning new trading courses etc.

Confident Bias: Every beginner trader thinks that their every trade will end in the profits and they prepare their mindset accordingly. They don’t prepare themselves for the loss, and when the trade ends in a loss. They start blaming the external factors for it rather than accepting it as the part of the probability.

The Probability Calculation: Understanding about the fact that trading is the game of probabilities. You can be more on the losing side instead of winning side but still you will may remain profitable. Many traders look for  the certainty in the markets and ends up being at the losing side.

Lack Of Data Patience

Lack of data patience term refers to the ineptitude of waiting objective, like waiting for signals before executing and exiting from the trade. However it fuels the impulsive trades decision etc. Meanwhile it increases the loss overall. Many traders leave their strategy before gathering essential facts about the strategy and the markets.

The Risks of Making Decisions From Limited Data

Impatient traders always let their impulses to drive their results. As a result they enter in the trade on the basis one signal. Rather than waiting for the whole criteria to be meet. However the other traders may continue to change the strategy before giving it the chance to playout.

Most of the traders doesn’t even give the ample amount of trade to the strategy. As a result strategy play against their favor. Just after few trades they abandon the strategy. In order to remove emotions and build confidence in the strategy. The traders need to give sometime to the strategy, to let the probability play in the favor.

Overexposure To Information

Excess of information happens when the traders start listening to the every voice. When trader start using the more indicators, adding on the more confirmations signals etc. It automatically causes the analysis paralysis, emotional burnout which leads to impulsive overtrading etc. However the trader believe that more information brings the more guarantee of the profits. Meanwhile eventually this make the trading even worse.

The Main Problem