Why do almost everyone fail in trading?🧵 Almost everyone fails in...
Yumi🌸@samuraipips358
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May 14, 2025
~5 min read
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1
Why do almost everyone fail in trading?🧵
Almost everyone fails in trading.
What is the path to success that you should take to dodge that fate?
🧵1/8
Almost everyone fails in trading.
What is the path to success that you should take to dodge that fate?
🧵1/8
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2/8
Many people fail in trading.
"No matter what chart-reading method you use" "even if you have a system with an edge" people still fail.
There is an unavoidable law at work here.
The reason it is called a law is that the failure of many people is not accidental but inevitable, supported by an overwhelming population size; it is a pattern.
Paradoxically, stepping outside these patterns avoids failure and becomes the road that leads to success.
This thread explains those points.
Many people fail in trading.
"No matter what chart-reading method you use" "even if you have a system with an edge" people still fail.
There is an unavoidable law at work here.
The reason it is called a law is that the failure of many people is not accidental but inevitable, supported by an overwhelming population size; it is a pattern.
Paradoxically, stepping outside these patterns avoids failure and becomes the road that leads to success.
This thread explains those points.
3
3/8
The primary reason the majority fail is because they "think only about profit."
Nearly everyone starts trading because they want to earn, so their focus is on "how much they can earn" and "I want to earn more."
They determine position size "based on the amount they want to earn," "set no stop-loss," hesitate to cut losses when necessary, and pray that the position will be rescued without cutting.
When you decide position size based on the amount you want to earn, you simultaneously take on the risk of losing that amount.
The market is full of randomness, and it is impossible to keep winning.
Because people who trade with such position sizes are not prepared to lose, they have no resolve to accept loss; when the chart moves against their expectation, they cannot accept the loss, do nothing, and end up suffering a loss far beyond their tolerance.
These behaviors are identical to continuously repeating a strategy with a very poor risk-reward ratio, and if you keep acting this way, in any chart, in any market, you will "definitely" fail.
Because you will "definitely" encounter losing trades somewhere.
If you collect a large sample size with these behaviors, the results inevitably appear, and that is one reason so many people inevitably cannot succeed.
The primary reason the majority fail is because they "think only about profit."
Nearly everyone starts trading because they want to earn, so their focus is on "how much they can earn" and "I want to earn more."
They determine position size "based on the amount they want to earn," "set no stop-loss," hesitate to cut losses when necessary, and pray that the position will be rescued without cutting.
When you decide position size based on the amount you want to earn, you simultaneously take on the risk of losing that amount.
The market is full of randomness, and it is impossible to keep winning.
Because people who trade with such position sizes are not prepared to lose, they have no resolve to accept loss; when the chart moves against their expectation, they cannot accept the loss, do nothing, and end up suffering a loss far beyond their tolerance.
These behaviors are identical to continuously repeating a strategy with a very poor risk-reward ratio, and if you keep acting this way, in any chart, in any market, you will "definitely" fail.
Because you will "definitely" encounter losing trades somewhere.
If you collect a large sample size with these behaviors, the results inevitably appear, and that is one reason so many people inevitably cannot succeed.
4
4/8
Those who can notice this next think that "risk management is the most important."
That is not wrong, but at this stage they have not yet reached the essence of the problem.
No matter how much risk management you do, if you do not understand why consistent trading leads to success, it only becomes a way to buy time before bankruptcy.
The true purpose of risk management is "to operate a system with an edge safely over the long term, build the necessary sample size, and draw out the edge."
"That risk management itself must produce a statistical edge."
In other words, the cost you assume must create positive expectancy through a large sample size and must "truly function as a cost."
Many traders say "losses are costs," but most merely use this phrase as a consolation for a losing trade, and it rarely functions as a truly necessary cost.
So what is a truly necessary cost?
Those who can notice this next think that "risk management is the most important."
That is not wrong, but at this stage they have not yet reached the essence of the problem.
No matter how much risk management you do, if you do not understand why consistent trading leads to success, it only becomes a way to buy time before bankruptcy.
The true purpose of risk management is "to operate a system with an edge safely over the long term, build the necessary sample size, and draw out the edge."
"That risk management itself must produce a statistical edge."
In other words, the cost you assume must create positive expectancy through a large sample size and must "truly function as a cost."
Many traders say "losses are costs," but most merely use this phrase as a consolation for a losing trade, and it rarely functions as a truly necessary cost.
So what is a truly necessary cost?
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5/8
Your loss becomes a truly necessary cost depending on "how much profit you aim for at what probability with that cost."
Thus those activities become a "business."
You are like a restaurant owner who manages labor costs, rent, and food costs appropriately while aiming for profit beyond them.
The sales of a single day do not decide your success.
Even if there are few customers today, that does not define your failure.
In this way what is needed in trading is very simple.
It is "a little edge and a large sample size."
A perfect strategy or system is unnecessary, and no matter how much you search in this market world ruled by randomness, you will never find such a thing.
If the return produced by your repeated actions under fixed rules exceeds the risk, funds increase.
Whether that is a risk-reward ratio of 1:1 with a 55 % win rate or 1:2 with a 40 % win rate, anything is fine.
What matters is whether there is positive expectancy through a large sample size.
Once you have prepared a system with positive expectancy, the trader’s job is to draw out its performance.
Your loss becomes a truly necessary cost depending on "how much profit you aim for at what probability with that cost."
Thus those activities become a "business."
You are like a restaurant owner who manages labor costs, rent, and food costs appropriately while aiming for profit beyond them.
The sales of a single day do not decide your success.
Even if there are few customers today, that does not define your failure.
In this way what is needed in trading is very simple.
It is "a little edge and a large sample size."
A perfect strategy or system is unnecessary, and no matter how much you search in this market world ruled by randomness, you will never find such a thing.
If the return produced by your repeated actions under fixed rules exceeds the risk, funds increase.
Whether that is a risk-reward ratio of 1:1 with a 55 % win rate or 1:2 with a 40 % win rate, anything is fine.
What matters is whether there is positive expectancy through a large sample size.
Once you have prepared a system with positive expectancy, the trader’s job is to draw out its performance.
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6/8
Thus, it is extremely important to view trading through probabilistic thinking.
The world of the market is filled with randomness; any strategy can lose on a single outcome, and even the sloppiest entry can sometimes win.
To succeed in this world, you must acquire these aptitudes and understand how to apply them to trading.
However, mere understanding is still not enough to succeed.
That is because, to leverage the laws of probability, you need a sufficient sample size, and the problems you meet while collecting it are, in fact, the essential problems that block your success.
Thus, it is extremely important to view trading through probabilistic thinking.
The world of the market is filled with randomness; any strategy can lose on a single outcome, and even the sloppiest entry can sometimes win.
To succeed in this world, you must acquire these aptitudes and understand how to apply them to trading.
However, mere understanding is still not enough to succeed.
That is because, to leverage the laws of probability, you need a sufficient sample size, and the problems you meet while collecting it are, in fact, the essential problems that block your success.
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7/8
Even if you calculate appropriate labor, material, and rent costs, estimate what location to open a restaurant in, and how to operate profitably, the restaurant will go bankrupt if the employees you hire, because there are no customers that day, start ordering luxury ingredients that exceed the necessary cost, demand outrageous wages, ignore all the instructions the owner set, and act on their own.
You are both the owner and the employee.
No matter how wonderful the rules or the system with an edge you have in trading, if you refuse to collect the sample size necessary to draw out that edge, you cannot succeed.
The root problem you meet in trading lies in this consistency, and at its core is the "belief that win or loss has value."
That belief evokes intense emotions toward the win or loss right in front of you and prevents you from doing what is truly necessary in trading.
Even if you calculate appropriate labor, material, and rent costs, estimate what location to open a restaurant in, and how to operate profitably, the restaurant will go bankrupt if the employees you hire, because there are no customers that day, start ordering luxury ingredients that exceed the necessary cost, demand outrageous wages, ignore all the instructions the owner set, and act on their own.
You are both the owner and the employee.
No matter how wonderful the rules or the system with an edge you have in trading, if you refuse to collect the sample size necessary to draw out that edge, you cannot succeed.
The root problem you meet in trading lies in this consistency, and at its core is the "belief that win or loss has value."
That belief evokes intense emotions toward the win or loss right in front of you and prevents you from doing what is truly necessary in trading.
8
8/8
It was difficult to explain everything in this single thread, so this was a rough outline, but I have covered the main points, and I believe you have some image now.
Many traders overreact to the wins and losses in front of them and think that winning the trade before their eyes determines success, but you should now understand how wrong that is.
To succeed in trading is completely different from what most people imagine.
I post these important aspects every day, so please scroll back and read my posts and threads.
The answers you need should be there.
And if scrolling back is troublesome, I also have books that explain everything in detail, so please read them.
What you should really do will become clear.
Thanks for reading!
If you enjoyed this thread, check out my books on trading.
E-book
payhip.com/YumiSakura
Paperback
【THE PATH TO SUCCESS IN TRADING】
a.co/d/fXmRhIa
【Trading Psychology】
a.co/d/d0QJMxK
Hope these insights help your trading journey😊
It was difficult to explain everything in this single thread, so this was a rough outline, but I have covered the main points, and I believe you have some image now.
Many traders overreact to the wins and losses in front of them and think that winning the trade before their eyes determines success, but you should now understand how wrong that is.
To succeed in trading is completely different from what most people imagine.
I post these important aspects every day, so please scroll back and read my posts and threads.
The answers you need should be there.
And if scrolling back is troublesome, I also have books that explain everything in detail, so please read them.
What you should really do will become clear.
Thanks for reading!
If you enjoyed this thread, check out my books on trading.
E-book
payhip.com/YumiSakura
Paperback
【THE PATH TO SUCCESS IN TRADING】
a.co/d/fXmRhIa
【Trading Psychology】
a.co/d/d0QJMxK
Hope these insights help your trading journey😊