Quote:
Originally Posted by europeanson7
Another thing that I find laughable is when people say you need to find a system that fits yours personality. What does following directions have to do with my personality? Take the Ozfx system that I have been reading a lot about recently. It has clearly defined entries and exits. There is a right and a wrong way to follow the system, it's not subjective. I probably could have followed the system in 3rd grade if I had someone to teach it to me. My personality has nothing to do with anything, I either follow the system exactly or I don't. So what do you think, guys, do most traders lose money because the systems are not profitable or are most people just too stupid to follow directions?
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Following directions has a great deal to do with your personality, actually. If you're an automaton, mechanistic adherence to a system is simple - ask anyone that programs expert advisors. Inclinations, appetites, misgivings, overconfidence, naivete, bias, impatience and plenty of other foibles all dictate and in many cases can sabotage your trading. Methods/systems vary in quantity of entry signals generated, screen commitment, amount of capital risked, timeframe used etc., with a method configured in one way more amenable to a person with a combination of personality characteristics than others. Both of the reasons you've provided concerning why traders lose money are correct, but there is a third - lack of candid self-understanding - that is primarily responsible. You could call it self-stupid, if you like.
And I don't simply mean "personality type A matches well with system A1, personality type B matches well with system B1", etc. I mean what most traders - and non-traders - lack: humility (before the market in our case) and a developed capacity for self-cognizance, self-criticism, self-correction and discipline.
Add all of that together, and it is no wonder most (the 95% statistic was originally directed toward futures traders) traders fail, despite manifestly simple and objective entry and exit criteria.