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26 Oct 2016 (TheAge) – Investment: the simple reason traders lose money . . . they’re human

(26 October 2016, The Age, MONEY supplement, p2, Marcus Padley)

‘If you read some of the books on trading, such as Way of the Turtle, Profiting in Bull and Bear Markets, or The New Market Wizards, the suggestion is that 60-90 per cent of traders lose money, depending on their level of leverage and the product they are trading. Trading foreign exchange with a leveraged product is the biggest killer – a bit like opening an online betting account. Trading equities without leverage is one of the best odds activities.’

‘Why do traders lose at trading? The answer is that they are humans not machines. You need to be clinical. But faced with losses, gains and luck, it’s hard not to be emotional and irrational; it’s human, and that’s the problem. Humans are not wired to invest successfully and to overcome that weakness you have to systemise and employ a process that constantly develops because you’ll never consistently win trading by the seat of your pants.’

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