My YouTube channel was created in 2013.
The first blog post on TradingwithRayner went live in 2014.
And along the way, I’ve interacted with thousands of traders and the truth is…
Majority of traders fail.
Here’s why most traders fail…
You want to be spoon-fed without doing the work
“Hey Rayner, which is the best moving average to trade with?”
“Can I use 2 ATR to set my stop loss?”
“Which indicator is best for Trend Following?”
Now, those are the type of questions I get each day.
But how does this explain why do traders fail? What’s wrong with these questions?
It shows signs of laziness, that you’re not willing to do the work — and you want to be spoon-fed.
And here’s the thing:
Even if I tell you a method, strategy, or indicator is the best, you won’t have the conviction to trade it, for long.
Because when the drawdown comes, you’ll abandon it and claim it doesn’t work. Then you’ll look for the next best thing and the cycle rinse repeat itself.
Do you see the recurring pattern?
You don’t validate your findings
You’re probably wondering:
“What does validate means?”
When you validate a strategy, it means you’ve tested it and know that it makes money in the long-run. (This can be done via backtesting, forward testing, etc.)
And here’s the truth behind why do traders fail:
Most traders are not willing to validate their findings. You don’t want to do the work. You’re not willing to spend the time to figure out whether something works, or not.
Instead, you want to “copy” the strategy of other traders and hope things turn out fine.
Unfortunately, that’s not how it works and it’s exactly why most traders fail.
Because if you don’t validate your findings, you won’t have the conviction to trade it when the drawdown comes (I can guarantee it).
But if you do the work, validate your findings, and know you have a trading strategy that works — it’s a gamechanger for you.
You minimize the fear of losing because you know your trading strategy has an edge in the markets.
You minimize the fear of the unknown because you know what’s your maximum drawdown, average winning rate, losing rate, risk to reward, etc.
You won’t constantly look for the next “best thing” because you have something that’s proven to work.
In other words, if you validate your findings, you increase your odds of becoming a consistently profitable trader.
You get swayed by the noise the out there
Do you know there are 1.7 billion websites?
Yes, you read me right. Billion with a B.
So why do traders fail?
Because when new traders want to learn about the markets, they get overwhelmed!
You’ve got stuff like Forex, Options, Stocks, Futures, Indicators, Price Action, RSI, MACD, Elliot Waves, Fibonacci, Stochastics, Pivot Points, etc.… and I’m just scratching the surface.
Where do you start?
That’s why if you want to learn how to trade, you must start with the end in mind.
This means you must know what’s your end goal and then work backwards from there.
Here’s an example:
- Let’s say you have a full-time job and want to trade part-time
- Your goal is to beat the markets earning anywhere from 10 – 20 % a year
- You want a trading system that’s rule-based so you can follow it consistently without second-guessing yourself
Now once you’ve defined your goals, it helps you filter out the noise and focus on the things that matter.
In other words, you can ignore Price Action Trading, Day Trading, Elliot Waves, Chart Patterns, Support and Resistance, etc. because it’s subjective and not what you want.
Instead, you should focus on systems trading on the Daily timeframe (and above) as this meets your criteria.
Can you see how powerful this is?
You’re doing it alone
Remember when you were in school?
You had a teacher for every subject to learn from.
Outside of classes, you had a coach (whether it’s football, basketball, and etc.) to provide feedback so you can improve your game.
And even when you’re “chasing” the girl of your dreams, you have buddies (who are expert at the game), giving you advice, tips & tricks on how to win her over.
Clearly, at every stage of your life, you had someone experienced to give you feedback, advice, and knowledge.
But when it comes to your trading career…
…you’re doing it alone.
And by figuring things out yourself, you face questions like…
“Does this trading strategy work? Do I have an edge in the markets? How do I know what works and what doesn’t?”
Now, I’m not saying you can’t make it on your own.
You can… with hard work, determination and paying HUGE fees to Mr Market.
How much time, effort and money you’ll save if you have a mentor?
In case you’re unaware…
Paul Tudor Jones had Eli Tulis as his mentor.
Jerry Parker had Richard Dennis as his mentor.
Stan Druckenmiller had George Soros as his mentor.
Every one of these legendary traders had someone to guide them to take their trading to the highest level.
What about you?
You don’t have the correct expectations — here’s the reality
Let me share with you a secret…
During my university days, I had a dream of becoming a full-time trader straight after graduation.
No bosses to answer to.
No need to work for any company.
No need to participate in any politics.
My plan was to take my entire savings of $5,000 and borrow another $5,000 from my dad (for a total of $10,000) to trade full-time.
I figured if I could make $2000 per month, then it’s enough for me to survive and fulfil my dream.
And that’s what I did.
But 6 months into my “trading career”, things didn’t work out the way it’s supposed to.
Not only was I bleeding my trading account, but I also relied on my parents for financial support.
It’s then I realized I didn’t have the correct expectations to start with.
1. No proper skillset
Here’s the thing…
I attempted to trade full-time without having the proper skill set.
Let me ask you, would you allow a surgeon to operate on you if all he/she did was read a few books?
2. Lack of trading capital
If you think about it, I needed a return of 30% each month to meet my living needs (which isn’t realistic).
This resulted in the “need to make money” syndrome and caused me to break my rules — and led me to take on losses larger than expected.
Trading isn’t a get rich quick scheme.
It’s a money-making skill to grow your wealth steadily in the long run.
So do all Forex traders fail in the long term? Yes, if…
You don’t have this most important thing in trading
I used to think…
Trading is 80% psychology.
Trading is about following your plan.
Trading is having proper risk management.
And it’s true.
But, it’s useless if you don’t have an edge.
This hit me hard when I read Market Wizards and Jack Schwager said something along these lines…
Imagine you’re going to gamble in a casino.
You adopt proper risk management and keep your bets small.
You psyche yourself up with positive affirmations like…
“Lady Luck is shining on me!”
“I will make a killing today.”
Well, guess what?
You’re still going to lose.
Because you don’t have an edge over the casino.
Without an edge, even the best risk management and psychology won’t save you.
The bottom line is this…
If you want to be a consistently profitable trader, you must have an edge.
You focus on tactics, not principles
First, let me explain what tactics are.
Tactics refer to things like entries, exits, best indicator settings, etc.
The problem with tactics is you’re not seeing the big picture (in other words, missing the forest for the trees).
For example, a Trend Following strategy is backed by 5 principles…
- Follow the price
- Buy high and sell higher
- Trade a variety of markets
- Risk a fraction of your capital on each trade
- Trail your stop loss
If you follow these 5 principles closely, you have a good chance of making money in the markets.
But, if you focus on the tactics like the entry point, stop loss or chart patterns, then you’re missing the big picture.
So the lesson is this:
Always focus on the principles first, not the tactics.
Because you can have the “best” tactics in the world, but if it’s built on wrong principles — you’ll still end up with junk.
At this point…
You’ve discovered the biggest reasons why most traders fail and how you can avoid it.
Now here’s what I’d like to know…
What’s the biggest takeaway you had from this post?
Leave a comment below and share your thoughts with me.
Thanks Raynor. You woke me up from my big $$$Dream$$$ !
Glad to help!
You just stated what I feel from some time and that is: getting a mentor is the best investment a-trader-wannabe can do! (I didn’t)
Never too late, AJ.
Hahah! Yeah! Maybe one day….
Trailing stop means you have to leave you trading o;, on your computer 24/7. The server in MT4 does not recognize your trailing stop. If your computer is off your trailing stop order will not be active in the market. A lot can happen.
You can always set up an always on box on AWS (or any other cloud server environment). Sure there will be a small fee, so its pretty much based on you dedicating yourself to a plan. You can also just buy a small dedicated always on mini server (but cloud more reliable)
Very nicely written. With just a few figures, it would be perfect. It could go like this: in trend following, you win 30% of the time. By wonderful calculations, you end up with a possible streak of 25 consecutive loosing trades. That’s what psychology is about, you should not give up. And having an edge is when you win money even under adverse conditions because risk/reward ratio is great. The testing strategy must be analyzed with statistical approach, and this gives lot of confidence for the future.
Thank you for sharing, EP.
wonderful insight, thanks alot you such a great teacher i really appreciate you effort to always tell the truth as it is
You’re most welcome!
I love this ..It’s hard truths. “Trading Is not a get rich quick scheme but to make wealth over time ”
“Have an edge” …What’s that ? Pls explain !
I believe that trading is gambling nothing more .It is like a well organized betting game with some modifications. That’s why no strategy is 100%.
I wont recommend it for anyone not even my worse enemy ….
Check this out… https://www.tradingwithrayner.com/how-to-find-an-edge-in-the-markets-even-if-youve-been-losing-for-years/
“Let me ask you, would you allow a surgeon to operate on you if all he/she did was read a few books?”
This point has has opened my eyes and i had to check my personal develpment abt Fx markets.the market itself has proven me that can’t give you money you dont desrves consistently
Thank you for sharing, Louis.
I’m still concerned about the part of “having an edge.”
What does that mean?
Check this out… https://www.tradingwithrayner.com/how-to-find-an-edge-in-the-markets-even-if-youve-been-losing-for-years/
what is the reasonable profit % per month ?
Please I would like to read your further explanation about having an edge in the market
I did a podcast on it here… https://www.tradingwithrayner.com/how-to-find-an-edge-in-the-markets-even-if-youve-been-losing-for-years/
All completely true not a word of bs. However finding good mentors is a problem. You a good mentor but beyond you there’s a massive amount bs books/courses out there it’s a needle in a haystack finding ppl like you . Much time is wasted searching in the wrong direction coz something looks interesting .The real junk is quite easy to seperate but as an inexperienced trader it’s easy to get caught up with the seemingly good stuff
Thanks for sharing, Pieter!
I am alone in FX trading, need to work hard;
I need an edge to beat the market; and
I should focus on trading principles, not the tactics.
Go to WORK &
If only more people hear that message.
As a green horn in forex trade,i have been obssessed with what i now know as “tactis” infact,the inexplicable appearance of charts had frightened me like nightmare.I have put all my focus on tacts but now i know why i lost heavily on my yesterday demo trade
Teo,pls,explain.Do we buy high or low after the signal candle(s)?
Instant execution,how different is it from price tracking?
Validating your trading strategy through back testing to find the right strategy that works for you. The right strategy always includes loses that you manage to keep small by following the strategy rules and letting profits run to maximize profits. I am also slowly becoming a believer in scaling out of the trade to take a nice profit but allowing for bigger future profits (or not).
Thanks for sharing, Vince.
Gonna work on getting my edge man! Thanks!!
Go for it!
I’m new in this game, started reading books and following you and your blogs in December. I agree with everything you mentioned, especially about finding a mentor. My challenge is that I don’t know any trader locally that I can ask for mentorship. How do I go about finding a good mentor and does it have to be someone I know locally, or can it even be done online with someone living far from me.
If you can’t find one, you can always learn from experienced traders through their books, blogs, etc.
Do you have a mentor?
Books, blogs, and traders I follow on Twitter.
nice one, tx
Thanks sir, you’re the best!
They are 3
2.having the correct expectations
3.having and edge in the market
Thank you for sharing!
Surgeons operate on you with reading books….vow life changing quote
Thx u rayner .. it’s realistic.. enlight my mind
You are most welcome!
My takeaway here is that firex trading is not a get rich quick scheme.
And, we MUST focus on principles first before tactics.
I HAVE TO FIND AN EDGE
Check out this post…
Thanks Rayner after many years struggling to find the holy grail this shines so many truths to how people lose money.
Your adopt proper risk management
The hardest decision I have had to make is to buy the stock and wait for it to rise over time, or buy the options. I have not been very successful in options because I have not been following the price. I have been following the news. Now that I have you as a mentor, then I will apply your principals, and follow the price.
You are correct! Everyone needs a coach!
Thank you for reaching out to me.
I’m glad to hear that!
Following principle and having an edge (controlling one self ) and having a target in mind before going into trading
I’m glad to hear that!
Just want to thank you, I’ve been trading since 2016, but only after finding you a couple of months ago have I been making real progress in my trading, I’ve been trading using your trend following strategy, and via back testing I’m learning that I am actually profitable long term. I havent even started using capital, and only trade using demo accounts, and I won’t until I’ve streamlined my strategy to get the edge you’re always talking about. And that’s what I took out of this article, finding an edge.
I’m glad to hear that!
Wow!!! This is really a very good course, Rayner thank you so much, i need your help as a beginner in trading, as i just started today and i came across your classes and they pushed me to start this trading journey with you. You are so skilled !!! I want you to be my mentor in this course, help me to achieve my dream of being successful in trading.
Look forward to hearing from you, thank you, God bless you.
Check out the trading academy.
You are my Mentor
As at now, no one as mentored me as you do, thanks so much
You are most welcome!
I already asked for a mentorship through an email, am asking again rayner
If you are new to trading then I highly suggest going through Rayner’s trading academy here: https://www.tradingwithrayner.com/academy/
I didn’t realize I was trading with tactics and missing the big picture. I’ve heard you say this before but until last night apparently I didn’t know what you meant. Trading the big picture of the market leads to much larger returns rather than simply trading your strategy in the moment.
Glad to hear that!
I always concern about tactics but today I know that the principal comes first.
I’m so glad to hear that!
How to have and edge?
Do some paper trading. It is the most boring thing. But the best and only way
You don’t have the correct expectations –
defo the headline statement….no plan = no gain
Thank you for your contribution.
The best ones
1. You do it alone – due to shy
2. No mentor – many vedios discourage traders to attend classes and acquire knowledge.
3. Individual effort in developing a good strategy is lacking in all the losing traders.
Thanks for posting such vedios.
Thank you for contributing.
THANK YOU, AM NEW TO FOREX TRADING WITH LITTLE KNOWLEDGE, BUT THIS MAKES SENSE! I NEED A MENTOR
Check out the trading academy…
How can I find a trader Mentor around me ?
Hi I purchased both books and videos but can’t find the one we’re it shows how to scan in minutes the posible stocks to invest
I’m newbies to this venture but a little knowledge and for sure acquiring knowledge best to have a mentor or coach.
(1)Sir I have been following your instructions but I don’t know how to use ATR to trailing my stop lose i have read all your ATR lesson but I don’t understand .
(2) I follow a trend as you said but my problem is how to time an entry to avoid stop out from the market because it happens to me always. What should I do.
(3) I want to know what happened if 200ma is near the price does it mean the trend is about to change because of what happens to me on usdcad i stopped out with huge lose
Venturing out on your own in the world trading isn’t necessarily the best choice but with the right mentorship and the appropriate principle there is good chance of you been successful.
Thank you, Anderb!
my takeaway is that you must have a mentor to help keep you on the right track to consistent success.
Thank you, Toua!
I will stop being lazy and believe on myself.
That’s awesome. Ruth!
The first thing I like from you, is the way you teach! When I read or watch your videos, is like we know each other!! You are the best
You are most welcome, Aime!
Thnx for good health info
You are welcome, Afcato!
I had this dream to achieve $2000 per month either. And now after I read this article you blew my mind and change my path to the right side. Thank Rayner.
I really like the part you talk about people focusing on tactics and not principles , because I am a new trader and I am just learning how to enter the market and exit but after reading this I will have it in mind that there is more to the market than I am thinking ..
Glad to hear that, Ebuka!
Thank you Rayner,
I appreciate you taking the time to help new traders avoid the common mistakes most traders make. My takeaway from this article is to primarily focus on building the right mindset and skillset everyday, because without this as a foundation, one will get crushed in the markets. It’s just like martial arts, one has to have a solid stance and practice forms and sparring 1,000’s of times before getting good enough to fight and win consistently.
I appreciate your realistic approach to trading. You are mentally preparing new traders so they have the right expectations. I am taking action everyday by taking courses, watching video lessons, listening to audiobooks and trader interviews, papertrading, and some real trading with a few index funds. Eventually I want to scale up and trade 3x ETF’s and options once I’ve proven myself over 100’s of trades and have a solid edge.
Thank you, Joseph!
Please what do you mean by you must have an edge.
It’s a skill you exhibit consistently in the market that yields profitable results.
Hi , Thabang here.
I didn’t understand you when you were saying I must trading based on principles and also I must have an edge over the market?…
Thanks for guidance, I’m watched your 100+ videos and still it’s new for, you are dy great job,
Thank you, Sukhdev!
I love you; you are, a straight shooter and always on point with real issues that traders struggled with.
Thank you so much, Frank!
The reminder of that old Steven Covey principle of “Begin with the end in mind”, together with focusing more on principles rather than tactics… this is trading gold Rayner – thanks for that!
Follow the principles first before taking the tactics into consideration.
Thanks for your contribution, Thomas!
Thank you …it put me out from imaginary world
Glad to hear that, Vinith!
Loving the teachings, most loving the little notes, very inspiring, Mr Rayner, this tips n’ steps also works with volatility indexes (VXI) right ??
You are welcome, Jabba!
What do you mean by “must have an edge”, let me ask you rayner what is your edge ?
An Edge means doing something consistently over time to yield good results no matter what happens you stick to your strategy.
Everyone needs to find what’s profitable and convenient.
Thanks Rayner for this piece of Advice… I started following when I came across your page while surfing the web on Google search for an answer concerning Forex trading…. And since then am at peace because your are teaching the reality of Forex trading….Please could you become my mentor?
We are glad you find our blog useful. If you wanna learn more, Rayner is offering a Plan that will suits you the best.
Here is a link:
Or you may check our academy:
Enjoy learning! Cheers!
Thanks for your blog post Rayner,
This really helps a lot
I now understand the rudiments of professional forex trading
It’s our pleasure, Steve!
My thought for this post is, knowledge may be received from everywhere but there must be originality about everything’s.
You’re right, Idowu!
Thank you very much for giving us this heads up. The one that really blew my head off was you telling us we follow tactics not principles .
Thank you very much Mr Rayner (The newest daddy in town).
Sir,one more thing. I really want you to be my mentor.As you said, we need a mentor. Please I look up to you now
You can check our UPAT course, it shows how to become a consistently profitable trader without relying on indicators, news, or opinion. here is the link: