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

Summary

The 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.