Yes, 90%+ of trades do fail. Here's how to avoid that

Beginner Questions
1

The vast majority of traders follow technical indicators - which are excellent for confirmation of market behaviour - but not that great in terms of forecasting what may happen next.


So, this begs the question - how does a trader not do what 90% of the market is doing? The answer lies in following or gauging market sentiment. Below is sentiment data for the XPTUSD pair, i.e.: The price of Platinum, expressed in USD [$], courtesy of the Sentiment Analysis page from the Lionheart Funding Program website.


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The first thing you’ll note, is that a substantial amount of traders are 97% long! So, in theory, such a large proportion of long positions, should drive the price up.


However, when one views the chart below [a screenshot of the same instrument, taken during the same trading day as the sentiment analysis data], you’ll note the market is actually moving against all of those traders. Courtesy of TradingView.

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How then, is it possible, that so many traders could be wrong? The answer is simple - they’re all using the same tools. Tools that are good for confirmation - but not so good at predicting price movement.


There are instances that I have noted though, where a vast majority of traders in one direction [long or short] have actually moved the market in that direction.


So, to develop a winning trading strategy, one needs to research and understand:

  1. When a majority of traders, focused in one direction, can move the market.
  2. Why the markets sometimes move in the opposite direction of popular opinion.
  3. What causes so many traders to go along with herd mentality, even though the statistics show they will eventually lose these trades.
  4. How to effectively use this information to your advantage.

I trust that this was informative.


Wishing you all of the best, and much success in your trading career. :slight_smile:

1 Like
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We can see it’s “preformatted” something! It obviously isn’t a “beginner question,” is it?

3 Likes
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Lol. No John, I used ‘br’ tags to add space between paragraphs. Don’t let that hinder the knowledge and analysis within the article.


I’d say it is for beginners, and wish they would read it, to avoid mistakes made by ‘veteran traders’.


And I prefer this section, as one cannot fill an already full teacup.


‘Don’t focus on the moon, or you’ll miss all the heavenly glory…’ - Bruce Lee.

4

I can’t agree with you, this free strategy using TEMA and Heikin Ashi. My other strategies use Bollinger Band, ADX, nothing extraordinary. No matter what you will use ( to some degree ) but how you will use. You can use simple hammer to build furniture or use it to build house. You decide.

5 Likes
5

Your modesty is overwhelming.

It’s mysterious to be posting “articles” like that in a beginners’ forex forum, and it’s especially odd on a site famous for its free course with 361 trading lessons!

Isn’t this what article directories are for?

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Obviously the same tool

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True, it is…but sometimes we need to draw attention to certain aspects. There are many posts on this forum that mirror the content, and the reason why they’re being posted is to perhaps emphasize the importance of a particular subject…

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Very true. It’s the trader, not the tools.

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It’s not the same tool Knox… :slight_smile:

But if you’re getting good results, then good for you!