It’s a promise that ambitious day traders and internet stock gurus make to naiive investors, that trading is the road to complete freedom — freedom from a 9-5 job, to work from anywhere, total financial independence and even complete passive income. But there’s a harsh reality that every would-be trader must understand:
More than 90% are losing money.
So why does this happen? And most importantly—how do you keep yourself from turning into just another data point?
In this post, we’ll break down the typical factors most traders fail and provide you with a map to become part of the winning 10%.
The Harsh Reality: Why Most Traders Lose
Let’s be clear on one thing: losing is a part of trading. But you don’t have to consistently be losing, blowing up accounts and having your emotions spiraling down the drain. Yet it happens to most. Here’s why.
Lack of Education
Most traders get into trading without much information about it. They watch YouTube videos of flashy lifestyles, mimic random strategies from TikTok, or subscribe to signal groups day trading — and have little understanding of the why behind trades.
Fix:
If you are going to risk your money, invest your time in learning first. Learn what price action is, risk management, market structure, psychology. Read books, sign up for courses, backtest strategies. In other words, approach trading as a profession, not a shortcut.
No Risk Management
You’ve likely heard the adage “cut your losses and let your winners run.” But most new traders do the opposite — risking big to get small wins and letting losses spiral out of control.
A single oversized position can wipe out months of gains.
Fix:
Risk a maximum of 1-2% of your capital per trade.
Place stop-loss orders on all positions.
Accept that not every trade will be a winner — and prepare for it.
Emotional Trading
Fear, greed, FOMO (fear of missing out), revenge trading — craving negative emotions cloud judgment and result in actions that are easy and impulsive. A single emotional trade can erase a week of disciplined work.
Fix:
Develop a pre-trade checklist and make sure to check the list to make sure it is logical and not emotional every time you enter a trade. Keep a trading journal and describe your state of mind. If you are trading out of boredom, anger or desperation — stop.
Lack of a Trading Plan
The vast majority of losing traders have no plan. They don’t know:
When to enter or exit
The setups they want
When they work best:UIControl: What time frame do these functions perform the best on?
Risk to reward ratio to target
They are trading chasers, direction guessers, and hoping for the best.
Fix:
Develop a clear trading plan:
A tactic you comprehend and have practiced
Entry, exit, and position sizing guidelines
A learning cycle over time to make progress and improve”.
Trading without plan is like sailing in storm without navigation.
Overtrading
Many traders mix-up activity with productivity. They overtrade in a day, chasing every ding, thinking more trades mean more money.
Overtrading, in fact, causes exhaustion, bad decisions, and burnout.
Fix:
You are aiming for quality, not quantity. Better to make one A+ trade every day than five you pulled out of a hat. Trade limited number of trades per session and take rest to recalibrate.
No Journal or Review Process
How do you get better if you don’t understand what worked?
Very few traders ever go back and critique their trades. They don’t examine what went wrong — or what went right. So they continue to make the same mistakes.
Fix:
Begin a trading journal right now. Track:
Entry and exit
Reason for trade
Risk/reward
Outcome
Your emotional state
Review it weekly. Your journal is your OWN roadmap to mastery.
Unrealistic Expectations
Most of these rookie traders who have read a book or two on the subject think they’re going to double their money in a month. When they don’t, they get frustrated and start taking more risks and turning into losers.
Fix:
Adopt a long-term mindset. Explosive 2–5% continuous monthly gains multiply into massive numbers over time. Trading is marathon not a sprint.
So Then, How Do You Become the 10%?
So, now that we’ve established what not to do, here’s your game plan for success:
✅ 1. Master One Strategy First
Do not hop around between 10 different strategies. Pick one — price action, moving averages or breakout pattern — and become an expert in it.
Backtest it, demo trade it, and go live once you have confidence.
✅ 2. Treat Trading Like a Business
You wouldn’t open a restaurant without a plan, a budget, goals. Do the same for trading:
- Track expenses
- Set targets
- KPIs (determine win rate, risk to reward ratio, etc.)
- Review performance monthly
✅ 3. Putting Risk First, Earnings Second
You are not here to make money, you are here to manage risk. Do that well, and the money comes.
✅ 4. Keep Your Emotions in Check
Meditate, exercise, journal — whatever centers and calms you. If you are feeling anxious, do not trade.”
Discipline will trump motivation every time.
✅ 5. Get Involved, Go to Meetups, Find a Mentor
The life of a trader is often lonely and demoralizing. Be part of a community of traders that will help you and keep you accountable.
Feedback is fuel for growth.
Final Thoughts
Ninety per cent of traders do lose money — that statistic is true. But it is not because the market is fixed or success unattainable. The reason is that the vast majority of people don’t approach trading with the discipline and organization that is required.
If you’re willing to:
- Learn the craft
- Control your emotions
- Stick to your system
- Think long-term
- …then you have a chair in the winning 10%.
Avoid trying to “get rich quick.” Aim to become skilled slowly. The profits will follow.