Edward's Top Ten Reasons Aspiring Traders Never Succeed

Edward a.k.a Eudamonia published them at my favorite forum. These reasons are really golden ones, so great respect to Ed:

People are always looking for new indicators. And when new indicators are
scarce Kreslik.com becomes quiet. For the past several months Avery and others
having been telling folks that all they need is the BuyZone. But most people
don't listen. They want another indicator, another setup, or they say that
Avery's methods can't be backtested (in TradeStation or some other weak arsed
software). I hear a lot of this baloney. I thought I'd post some ideas on why
most aspiring traders never make it.

1. B.S. Backtesting. Why is it B.S you ask? Because as Michal told me -
   "Edward you must KNOW what you are doing". And most people haven't the foggiest
   idea of what they are doing when it comes to trading or programming let alone
   both. Too many good ideas are annihilated by stupid principals. Do you really
   think that Avery and other savvy traders are taking all market orders for a
   scalping system? Do you really think that I don't know what the market is doing
   within a 1 minute bar? Or that I care what the S&P was doing in 1997 (the
   market has changed in several big ways since then)? Or other such rubbish? Get
   real. 99% of all aspiring traders are not smart enough to effectively backtest
   their ideas because they can't trade in the first place Which is why they
   attempt to program their way out of the problem. This is effectively like trying
   to beat Tiger Woods by creating a robot golfer with your 1 college robotics
   class and $200. Not going to happen! So what should an aspiring trader do
   instead? Try forward testing your ideas. It takes longer to build a
   statistically relevant database but your results will be totally
   accurate.
2. No money = no money. This is a simple but really prevalent problem. I
   just talked with a trader two weeks ago. He could not understand why he has
   blown out 2 $5k accounts trading the Russell - and he was trading 2 contracts! I
   told him that even with my best system I would not trade 1 contract on the
   Russell with less than $5k. Got that? You need money - at least $15-25k and then
   only if you can trade will that do you any good.
3. Heard about the "X" indicator. This is the Jesse Livermore principal.
   When I first read Reminiscences I thought Jesse was an ass for listening to all
   those turkey tips. But it's more true than ever today. Instead of "tips" these
   days its indicators. Buddy I got a new indicator for you - it's called the "Big
   Money" indicator. What does it do? I have no idea - but it will make you a
   fortune. Only $599.99. You want to know my secret indicator? It's called the
   BuyZone - it's a classic breakout indicator. Been around for at least 50 years.
   I also use another arcane indicator - it's called a moving average :0. That's
   all you need! The rest is all about your trading competence. As Jesse says -
   only the market can tell you about the market. Indicators are only a guideline -
   the operator is one who can discern true market action.
4. No Discipline . This really should be number 1 on the list - because
   it is really caused by laziness and the desire for "easy money". Trading ain't
   easy. Running my catering business with it's cranky brides, broken equipment and
   moaning employees is still easier than trading. Got that? Depending on your
   method and timeframe even a good system will experience flat periods or
   drawdowns lasting weeks or even months! If you haven't tested this thoroughly
   then you are doomed! You think it's gonna be easy to lose again and again over a
   two-week or two-month period. Are you still going to be as eager to take the
   last trade as the first? You'd better if you want to make it! It's like I told a
   guy last week - the market pays me to take a licking for 8 out of 10 times so
   that I can really beat the living $#*&! out of the market that 1 or 2 times
   and make it all back and then some. Even scalping has it's dry periods - nobody
   is immune.
5. When do I get out of here? A couple weeks ago I was working with an aspiring
   trader and we were simulating (tick by tick) exactly how I do my trade setups. I
   encouraged him to try some of his trade setups and was stunned. He had fantastic
   entries (actually they were classic TA such as butterflies and flags) . But what
   really stunned me was that he had no predetermined exit plan. NONE! He would
   ratchet his stops tighter and tighter as the trade went on (regardless of what
   the market was doing) And then he would wait until the market literally scared
   the poop out of him to exit or his stop was hit. This is so common I can't
   really say more than that. To give you all an idea I spend a lot more time
   working on exits than entries. Any idiot can tell a breakout or a momentum move
   is beginning. Only a genius trader can exit at precisely the right moment.
6. Don't watch the market enough to know anything. Most of the "back testers" I
   talk to don't watch their market in real time It's a bold statement but one I
   think is true. Do you want to trade like Avery (or any other skilled trader for
   that matter)? Then do what I do every morning - sit in front of the market for
   the first 2 hours and do NOTHING else but watch. It's critical that you accept
   NO distractions. Watch the price. Watch how your favorite indicator (i.e. Moving
   Average) reacts to the price. Watch volume (if you've got it for your market).
   Watch time and sales. Do this for 6 months to a year. It will change your life I
   promise. If at the end of 6 months you can't discern when "sustained movement"
   is about to occur then quit trading. Save yourself the heartache. I guarantee
   that 99% of you (o.k. you have to be able to physically see) could do this and
   see what I see (or any experienced trader sees). Only 1% of you will listen. Too
   bad. BTW you need to watch the market during relevant hours. The most important
   time of day for the Russell is 9:30 a.m. EST. For the Euro/Pound it's the London
   open (followed by the NY).
7. Lack of persistence. People who end up succeeding have failed many
   times. Failures fail once and quit. Keep failing. Keep working. According to
   what most people say it takes about 3 years to start being successful as a
   trader. I find this to be mostly true. Actually it's all about hours. For myself
   it took about 3 years spending an average of 20 to 30 hours per week testing,
   trading, failing, working...But I'm not the brightest crayon in the box - some
   folks might figure it out faster. Live breath and eat trading. Think about
   nothing else. Be obsessed (I sure am). Go beyond work, beyond play into simply
   being.
8. Why am I trading this market/timeframe? Another ever so common problem. I
   hear "I got into Forex because of this stupid course and now I want to learn how
   to trade Forex" a lot. And not just for Forex. It is so important that your
   methodology, your psychology and your checkbook all support your market and
   timeframe. If you choose a market and timeframe arbitrarily you will get less
   than ideal results. I wouldn't try to scalp the Urea market for 2 ticks and I
   wouldn't try to swing trade the mini S&P. Why? Because they are not the
   ideal markets for those activities (unless you have a seat at the exchange for
   the Urea market I suppose). Also I wouldn't look only at daily bars for a
   scalping setup or at minute bars when I'm swing trading. You'd think that this
   is common sense but it's not. Are you trend trading - then look for markets that
   trend frequently (i.e. currencies). Are you interested in volatility based
   trading - then look at volatile markets like the DAX and ER2. Nuff said.
9. Lack of decisiveness. Usually there is a reason why we lack decisiveness.
   It's because we haven't thoroughly tested our idea or become confident with
   trading our style. I strongly encourage simulated real-time trading to solve
   this problem.
10. Afraid to succeed. Weird huh? With a capitalistic society you would
    think we wouldn't have this hang up. Is it because trading looks physically easy
    to do? Is it because it is hard to see how it benefits society? Is it because we
    are unsure of ourselves? It is an interesting dilemma. But I ask you this: What
    is your contribution to society from your day job? If you are in an office you
    push papers for someone (either the government or commerce) - who do you really
    help? If you are in retail, construction etc. your work may have more obvious
    effects. Most people find it hard to overcome this fear of success in the
    markets because the markets have no limits. None. In the next minute the Russell
    could go up or down 20 points and you and I have absolutely no ability to
    control it. Your account can go down to 0 (or worse) or increase by millions
    depending on how you manage it. In no other job are we so empowered (our income
    can be limitless) and yet so fearful (we can also have negative income). Trading
    is about freedom - and freedom can be a scary thing. Are you sure you want to be
    free? Edward P.S. I know most of you aspiring traders won't read my post so for
    a limited time I'm offering the magical "Pooper Scooper" indicator that wins 99%
    of the time (never mind what happens that 1% of the time). Right now I'm
    offering this indicator on a limited basis for the low low price of $999.99.
    This is a once in a lifetime offer! P.M. me for details.