TFS Talks- Podcast 7 | Why There Is A HIGH Failure Rate In Trading?

Train For Success With Nishant Arora

7 Jul 202417:10

Summary

TLDRThe video script addresses the common misconceptions and challenges in trading, emphasizing the importance of self-awareness, self-analysis, and self-improvement for success. It debunks the myth that 9 out of 10 traders fail due to lack of skill or understanding, suggesting instead that unrealistic expectations and lack of self-reflection are the real barriers. The speaker encourages viewers to assess their capabilities and motivations honestly, highlighting that trading, like any profession, requires dedication and the right mindset to excel.

Takeaways

😀 The majority of traders lose money, with statistics suggesting that 9 out of 10 traders fail, which is a common theme in trading discussions.
📈 Trading is portrayed as a difficult sector, and the speaker has discussed this extensively in previous podcasts, emphasizing the challenges involved.
💡 The importance of self-awareness is highlighted, which includes self-knowledge, self-reliance, and self-perception as key factors for success in trading.
🚫 There are no entry barriers in trading, which means anyone with an internet connection can enter this business, leading to a large unfiltered crowd.
🌐 The speaker mentions that trading is not just about the case with trading, but also about understanding the broader context and implications of trading activities.
🏆 The rewards in trading are significant for those who succeed, which is why the failure rate is not a deterrent for many who are attracted to the high potential returns.
🤔 The script suggests that self-analysis and understanding one's own strengths and weaknesses are crucial for anyone looking to become a successful trader.
🎬 An analogy is made to the film industry, where only a few become superstars, indicating that success in any field, including trading, is not guaranteed and requires specific skills and perseverance.
📚 The need for continuous learning and improvement is implied, as the speaker refers to the importance of not just entering the trading field but also mastering it.
🔄 The script touches on the concept of self-reflection and the need to be honest with oneself about one's capabilities and the effort required to succeed in trading.
🎯 The final message is about the importance of self-selection and the reality that only a select few will make it through the challenges and become successful traders.

Q & A

What is the first thing that traders usually check when they open their trading accounts?
-The first thing traders usually check is a notification from SEBI about the set and out of 10 traders, trading in F&O and option segments, which often becomes a topic of discussion.
What is the main topic discussed in the video?
-The main topic discussed in the video is the high failure rate among traders and the importance of self-awareness, self-motivation, and self-perception in trading.
Why is trading considered a difficult sector?
-Trading is considered difficult because it requires a high level of skill, understanding, and there are no entry barriers, which leads to a large number of unprepared individuals entering the field.
What does the speaker imply about the common perception of trading?
-The speaker implies that the common perception is that trading is easy and can lead to quick riches, which is not the case, and this misconception leads to a high failure rate.
What is the significance of self-knowledge in the context of trading?
-Self-knowledge is significant in trading as it helps individuals understand their strengths, weaknesses, and emotional balance, which are crucial for making informed trading decisions.
Why do people often fail in trading according to the video?
-People often fail in trading due to a lack of self-awareness, unrealistic expectations, and an inability to control emotions and maintain discipline.
What is the role of self-analysis in becoming a successful trader?
-Self-analysis helps traders to evaluate their thought process, decision-making abilities, and emotional responses, which are essential for making consistent and profitable trades.
Why does the speaker mention the example of people moving to Mumbai to become actors?
-The speaker uses the example to illustrate the harsh reality that not everyone who enters a competitive field like acting or trading will succeed, highlighting the need for realistic expectations.
What is the importance of understanding the difference between being 'cut for something' and 'not even cut for it' in trading?
-Understanding this difference is important because it helps individuals to realistically assess their suitability for trading and whether they have the necessary skills and mindset to succeed.
What does the speaker suggest is the reason for the high failure rate among traders?
-The speaker suggests that the high failure rate is due to a combination of unrealistic expectations, lack of self-awareness, and the absence of entry barriers that allow unprepared individuals to enter the trading field.
How does the speaker describe the mindset of successful traders?
-The speaker describes successful traders as having a deep understanding of themselves, their capabilities, and the discipline to make consistent and informed decisions in the market.

Outlines

00:00

📈 Stock Trading Challenges and Self-Knowledge

This paragraph discusses the common challenges faced by stock traders, emphasizing the importance of self-awareness and self-improvement. It highlights the high failure rate among traders, suggesting that lack of understanding and preparation are significant factors. The speaker mentions the ease of entry into trading, which may lead to unrealistic expectations and subsequent disappointment. The focus is on the need for traders to develop self-knowledge, self-reliance, and self-motivation to succeed in the competitive trading environment.

05:01

🏠 The Role of Financial Stability in Life Decisions

The speaker explores the influence of financial stability on life choices, particularly in the context of family dynamics. It points out that financial security often dictates the power and authority within a family, and how societal expectations can shape an individual's aspirations. The paragraph also touches on the misconceptions people have about the ease of making money through trading and the reality of the hard work and discipline required to be successful in any profession, including trading.

10:01

🎓 The Myth of Overnight Success and the Reality of Skill Development

This paragraph dispels the myth of instant success in various fields, including trading, and underscores the necessity of acquiring relevant skills and knowledge. The speaker uses examples from different professions to illustrate that success is the result of hard work, persistence, and continuous learning. It also addresses the unrealistic expectations of people who enter the trading field without proper preparation and the harsh reality they face when confronted with the complexities of the market.

15:01

🚀 The Path to Mastery in Trading and Life

The final paragraph emphasizes the journey towards mastery in trading and by extension, in life. It discusses the importance of self-analysis and self-control, suggesting that understanding one's limitations and strengths is crucial for success. The speaker encourages viewers to reflect deeply on their abilities and aspirations, and to recognize that not everyone is cut out for every profession. The paragraph concludes with a message of hope that those who are truly dedicated and capable will rise above the statistics and achieve their goals.

Mindmap

Keywords

💡Self-knowledge

Self-knowledge refers to the understanding of one's own character, motivations, and abilities. It is crucial in the video's context as it emphasizes the importance of traders knowing themselves, including their strengths and weaknesses, to succeed in trading. For instance, the script mentions 'self-knowledge' as one of the important points, indicating that understanding oneself is vital for trading success.

💡Self-motivation

Self-motivation is the ability to encourage oneself to take action toward goals and overcome obstacles. In the video, it is implied that successful traders must be self-motivated to continue trading despite the challenges and the high failure rate mentioned, such as '9 out of 10 traders lose money'.

💡Self-realization

Self-realization involves recognizing one's full potential and capabilities. The video suggests that traders need to have self-realization to understand their true potential in the trading field, which is part of the broader concept of self-awareness discussed in the script.

💡Self-perception

Self-perception is how one views oneself, including personal attributes and actions. The video touches on the idea that traders' self-perception can influence their trading decisions and outcomes, which is tied to the overarching theme of self-awareness.

💡Trading barriers

Trading barriers refer to the obstacles or limitations that prevent individuals from entering the trading market. The script mentions the absence of entry barriers as one of the reasons why many people enter trading, suggesting that anyone with an internet connection and some capital can start trading, which may contribute to the high failure rates.

💡Risk management

Risk management is the process of identifying, assessing, and controlling risks. While not explicitly mentioned in the script, the concept is implied in the discussion of trading success and failure, as managing risks is a critical aspect of trading.

💡Market sentiment

Market sentiment reflects the overall attitude and emotions of investors toward a particular market or financial instrument. The script alludes to market sentiment with phrases like 'people lose money on 95,' indicating the collective mood of traders, which can influence market behavior.

💡Financial rewards

Financial rewards refer to the monetary gains or profits that can be achieved through trading. The video discusses the high financial rewards as a motivator for people to enter trading, despite the risks and challenges involved.

💡Self-assessment

Self-assessment is the process of evaluating one's own abilities, skills, and performance. The script encourages traders to engage in self-assessment to understand whether they are cut out for trading, which relates to the broader theme of self-awareness and suitability for trading.

💡Emotional points

Emotional points are the aspects or issues that evoke strong emotional responses. The video uses the term in the context of a housewife's emotional point being the money she brings into the household, illustrating how personal circumstances and emotions can intersect with financial decisions and trading.

💡Expectations

Expectations are the beliefs or anticipations about what will happen or what is likely to happen. The script discusses how having unrealistic expectations can lead to disappointment in trading, emphasizing the need for a realistic understanding of the trading profession and its challenges.

Highlights

Traders often receive notifications from SEBI about trading inequities and the futures and options segment.

9 out of 10 traders lose money, emphasizing the difficulty of the trading sector.

The lack of entry barriers in trading allows anyone with an internet connection to enter the business, leading to high competition.

The importance of self-knowledge in trading, including understanding one's strengths and weaknesses.

The high failure rate in trading is not surprising due to the lack of preparation and understanding of the market.

The discussion about the rewards and risks associated with trading and how they compare to other professions.

The role of self-analysis and self-control in becoming a successful trader.

The comparison between the glamour of Bollywood and the reality of the struggles faced by those in the industry.

The unrealistic expectations that new traders have about making quick money in the market.

The need for traders to have a deep understanding of trading techniques and strategies.

The psychological aspect of trading and how emotions can affect trading decisions.

The difference between being an average performer and excelling in any profession, including trading.

The importance of self-assessment and the realization that not everyone is cut out for trading.

The analogy of the challenges faced by housewives and the emotional points that affect their lives.

The discussion on the value of money and how it affects the dynamics within a family.

The unrealistic expectations of becoming a movie star or a successful cricketer compared to the reality.

The need for traders to have a clear understanding of their motivations and goals in the trading business.

The message that only the right people will move forward in trading, while the rest will be filtered out.

The conclusion that there is no need to be happy or sad about the statistics of traders losing money, as it is a natural part of the process.