Reasons why the 95% of future traders lose all of their money

[DevilSlayer]

Are you guys aware that only 5% of futures traders are consistently earning money in the market? The 95% is traders like everyone else that keeps blowing their account and losing their money. People think that market analysis and intelligence can be the key to becoming part of the 5% of consistent winners but it is not the defining factor. Most traders think that their strategy is wrong without knowing that the determining factor is the winners think differently from everyone else. So, it means that psychology is the most essential thing if we want to become part of the 5% or the winners. There are 2 groups of traders, 1st is the consistent winners and 2nd is everyone else. We have options on what group should we belong to. These are the factors on how can we become consistent winners:

1.   Psychological – Trading is inherently risky; futures traders should be aware that no trade has a guaranteed outcome. When you put a trade, you are correspondingly accepting the risk but that’s where the problem comes in. All of the traders are taking the risk but are they accepting that the trade has a non-guaranteed outcome? The answer is No. Consistent traders are aware that there is no sure profit or magic in trading. They embrace the risk where if they lose, it is okay for them because they know that there is no guaranteed outcome.

2.   Trading system – The trading system is considered the blueprint of your trading journey; all of your strategies and steps belong to the trading system. You can create your own system but you can also buy or learn from someone to lessen the curve of learning. There is a lot of trading system online and you choose a system that is you fit your preferences, habits, and lifestyle.


3.   Risk management – The reason why people blow their futures account in less than a year is that they have poor risk management. Always remember that it is not about how much money you make, but it is about how much money you don’t lose. Risk management helps us trader's accounts from losing all of our money. Through risk management, we can know if the trade is worth it or not.

[mk4]

There's a reason why a lot of successful traders use algorithms/bots/scripts to execute their trades — it's to take as much emotion as possible out of the picture.

[Hamphser]

Risk management

Aside from phycological then i could say that people do really miss out this kind of thing where risk management is really indeed an important thing for people to consider or mind off whenever they do touch up
crypto space.This isnt somethingthat you could able to deal with if you dont set out proper preparations and actions should be made basing on the risk that you could able to put it out.
Plus this isnt only talking about on the risk but also this talks about on emotional aspects as well, with having this unpredictable and random market with those events and other fundamentals
then it could really stir up someones emotions so easily and this is where people do make out bad decisions and actions towards their trades and ending up on having not able to
follow to their plans because they've let themselves been affected on emotional aspect.

[Franctoshi]

Loosing money in trading is normal and to become an Experience trader is a process, So you will definitely encounter series of failures in the process of trading, which later results to loses, Therefore to become a successful trader you need to know /learn why we have 95% of traders loose money and take those mistakes into account, work on it and take the correct, which are greediness , emotions, and the
Psychological aspect of trading etc.

[ScamViruS]

Loosing money in trading is normal and to become an Experience trader is a process, So you will definitely encounter series of failures in the process of trading, which later results to loses, Therefore to become a successful trader you need to know /learn why we have 95% of traders loose money and take those mistakes into account, work on it and take the correct, which are greediness , emotions, and the
Psychological aspect of trading etc.

A trader who can learn from mistakes is the trader who can survive in the market. And if there is no mental strength to acquire enough knowledge of trading, the trader's account will be washed out again and again. Most traders go into futures trading to make a quick profit, and they are gambling rather than actually trading. And those who do futures trading with trading knowledge actually know how to manage risk and when to take entry and when to close position. Experienced traders also make losses but overall they keep a positive balance in their account.

[imamusma]

There's a reason why a lot of successful traders use algorithms/bots/scripts to execute their trades — it's to take as much emotion as possible out of the picture.

I get a good point, you are correct on this. Basically, uncontrolled emotions can make traders lose money in the market, whether it's in futures or spot trading. Emotion management is a must have for every trader, but if they use tools like bots then it will be very helpful.

Watching market volatility during trading will allow anyone to lose control of their emotions, especially if the market is undergoing a sharp correction.

[GeorgeJohn]

Loosing money in trading is normal and to become an Experience trader is a process, So you will definitely encounter series of failures in the process of trading, which later results to loses, Therefore to become a successful trader you need to know /learn why we have 95% of traders loose money and take those mistakes into account, work on it and take the correct, which are greediness , emotions, and the
Psychological aspect of trading etc.

Traders knows that their is involvement of advantages and disadvantages in trading, so the process of losing funds via trading is already in the mindset of a trader, because it's obvious that a market is very risk and it leads you to the negative impact and as well lead's to positive due to your method of day trading, or your strategies of trading. So therefore i adhere to your contribution, because experience trader knows when to be in market and also knows how to man over a huge loss in trading irrespective the obstruction in the market.

[Zilon]

A well structured trading plan is expected of a trader who plans on managing their trading psychology. Trading generally be it futures or spot has high risk to reward ratio. Not even trading strategy nor risk management can limit the losses of future traders. A trading plan defines what the trader expects from every trade, it also magnifies strategies and clearly defines what risk management measure a future trader wishes to deploy.  Trading plan has been neglected by many traders, many who draft their plans don't bother referencing them before every trade. The factors that hinders traders from making consistent profit most times are not as ambiguous has it is painted to be most of the times it might be as a result of simple negligence to things that are meant to be priorities just like having a plan boldly crested where a trader will easily sight them before executing their trades..

[kamvreto]

There's a reason why a lot of successful traders use algorithms/bots/scripts to execute their trades — it's to take as much emotion as possible out of the picture.

I get a good point, you are correct on this. Basically, uncontrolled emotions can make traders lose money in the market, whether it's in futures or spot trading. Emotion management is a must have for every trader, but if they use tools like bots then it will be very helpful.

Watching market volatility during trading will allow anyone to lose control of their emotions, especially if the market is undergoing a sharp correction.

Bots only help to do work that humans cannot do for 24 hours, this will indeed reduce the emotional level in trading because execution has been replaced by bots according to the settings we did at the beginning.
But don't rely completely on bots, because that's not good either.
In addition to risk management, financial management also needs to be considered because not all money is used for trading, there will be some reserves to deal with unwanted events.

[blockman]

Not just on the futures but also in the spot trading. It's a fact that only a few traders are really making their way for the profits that they share. While most traders, it's no longer a question and a secret that most of us are getting rekt by the market.
Trading is being hyped by the influencers because they only show their wins but if you ask them to show their losses, they're going to snub you and ignore you.

[sheenshane]

3.   Risk management – The reason why people blow their futures account in less than a year is that they have poor risk management. Always remember that it is not about how much money you make, but it is about how much money you don’t lose. Risk management helps us trader's accounts from losing all of our money. Through risk management, we can know if the trade is worth it or not.

The problem is here.
The higher leverage offers the more chances of losing your capital which means high risk.  It commonly can't sustain your losses.
So how can you manage risk in this, the percentage that OP has given was right, only 5-10% will gain profit using future trading and it could be a lucky decision of trading.

That's why I prefer holding and investing it in a long term or purchasing it in a DCA way which feels better.

[chaser15]

Futures trading is more of a gamble therefore don't expect that majority here is winning. It's the riskier version of spot trading.

Risk-management is something that we really can't control once you are in Future trading.

More importantly, just consider doing that if we are really prepared to face the risks and we know what we are actually doing.

[NicNacCoin]

The people lose the most money in trading are those who start trading without considering anything while trading. Especially when doing futures trading you need to look at all aspects. One little mistake in futures trading will ruin all your money. Future trading should be done with a healthy mindset. Never cheat on a futures trading platform. Know about each indicator. And the most important thing is that you have to use stop loss system. Most people don't use stop loss which is why most people lose money.

[agustina2]

Actually, even without checking some real information and stats, it's clear that most future traders losing their money. That is because future trading is really hard to do. High risk, high reward therefore no easy money here. But if successful, a good profit in return.

Maybe just do it if we are really ready. Future trading is not a joke. If spot trading that's way more manageable is hard, what's more on doing future trades.

[Coin_trader]

@OP Where do you get this stats as reference to your data? Actually, Exchange is the only entity that I know that consistently wins on futures trading since even whales are sometimes caught by the price manipulation. I really believe that exchange is somehow the culprit for those huge wick that hitting stop losses or liquidation of open position since they are not completely regulated and the SEC is not auditing what shit they are doing inside. CZ and Binance is the best example which is why CZ don’t want to cooperate to become a fully regulated exchange.

Price behaviour on crypto is very unpredictable and no person nor bot can catch up on that price data to open an accurate position. Futures trading is purely a gambling with an extra difficulty from exchange that liquidates open position at random basis. Even with a good risk management will not stand on a manipulative market. I stop futures long time ago and just focus on spot trading and sometimes margin trading with lower lev.

[Strongkored]

Curious by the title of the thread, what new things were conveyed by Op, but it turns out that these are common things that have been conveyed by many people in other threads, nothing new

3.   Risk management – The reason why people blow their futures account in less than a year is that they have poor risk management. Always remember that it is not about how much money you make, but it is about how much money you don’t lose. Risk management helps us trader's accounts from losing all of our money. Through risk management, we can know if the trade is worth it or not.

Agree that traders must have risk management how much value they can afford to lose and this is definitely different for each trader, but why trade if the focus is how not to lose, all the purpose of trading is to make money and this makes no sense if you only think how not to lose.

[worle1bm]

Loosing money in trading is normal and to become an Experience trader is a process, So you will definitely encounter series of failures in the process of trading, which later results to loses, Therefore to become a successful trader you need to know /learn why we have 95% of traders loose money and take those mistakes into account, work on it and take the correct, which are greediness , emotions, and the
Psychological aspect of trading etc.

You always learn with your mistakes and gain experience with it and if you seek advice from the successful traders they will also share their loss journey and how they manage to learn from it to avoid it in the future.Profit and loss are two side of one coin and you can't avoid them so the thing is how well you manage your loss and risk.In this bearish time all traders make loss out of their investments but it will be turn out how they survive in these conditions.

[OcTradism]

You should start with normal traders who trade spot only. Most of them lose their capital too and I read some articles that it should be 80% or higher.

Before mentioning about risk of future trading, you should continue with Margin or Leverage trading that is risky. With Leverage trading, more than 90% of traders lose their capital and worse than Spot trading, they more easily lose 90% or all of their capital.

Future trading is more risky than Leverage trading and trading fees for Future trading is more expensive than Leverage trading.

[Xxmodded]

High risk get high return and likely why many people still trying with future trading, I don't think with many people loser with future trading quit exactly keep trying until earn much profit. Some people stopped with future trading based on their faith have the same working like gambling, but I think excited with future trading we can earn double profit with small fund in short time and difficult earn much profit with spot trading.
I don't think until 95% of future trader loss their money, but under 50% they can't controlling emotion and not use "stop loss" when have fault with analyze.

Right now the future trader have been smart and they waiting for coin pump drastically for short opening and have preparing with Stop Loss if suddenly price going up.

[milewilda]

Loosing money in trading is normal and to become an Experience trader is a process, So you will definitely encounter series of failures in the process of trading, which later results to loses, Therefore to become a successful trader you need to know /learn why we have 95% of traders loose money and take those mistakes into account, work on it and take the correct, which are greediness , emotions, and the
Psychological aspect of trading etc.

You always learn with your mistakes and gain experience with it and if you seek advice from the successful traders they will also share their loss journey and how they manage to learn from it to avoid it in the future.Profit and loss are two side of one coin and you can't avoid them so the thing is how well you manage your loss and risk.In this bearish time all traders make loss out of their investments but it will be turn out how they survive in these conditions.

As a trader whether you do make yourself involved with spot or futures then it would really be just normal that you should really make yourself learn.Some do really mind most of past experiences of others but there are
some who do really dive on directly and find for themselves on how this market behaves or works. You are the ones who would discover out on what are the realities of this market.
If you do experience lots of losses then its really that impossible for a certain individual not able to find out nor notice out with those mistakes and wont really be making adjustments.
It would really be just common sense on your part on doing so if you do really like to sustain out.