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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Bill Moore’s key reasons traders fail

Quant, trader, and entrepreneur Bill Moore discusses why traders fail. Get professional insights into trading and grow your trading expertise.

Reading time: 36 minutes

Trading level: Beginner


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Introduction by Louise Bedford

The majority of traders are likely to fail. This isn’t just my opinion. The research backs this up over time. One study by Brad Barber and Terrance O’Dean is even titled “Trading is Hazardous to Your Wealth”. You can’t get much clearer than that, can you?

Here are the facts. Upwards of 80% of traders consistently lose money and only 1% achieve predictable, long-term profitability. An individual's trading career will often be brief and expensive. Academic studies focused upon the length of time new traders remain active show that nearly 40% last one month in the market, and only 7% remain active after five years. 

This finding has been replicated in many different studies.

Terrifying isn’t it.

So, just what can you do to be in the minority of traders who excel in the markets? I have some good news for you. There is hope.

I’ve invited my friend, Bill Moore, to discuss this topic with me.

Bill Moore is a quant, a trader, developer, entrepreneur, and also a keen player of games of strategy, such as chess and backgammon. He approaches trading with the same strategic mind.

Bill and I are going to talk about the key reason traders fail, and just what you can do to make sure you’re in the small but distinguished group of traders who conquer the markets and excel.

Welcome Bill…


Do traders that fail end up experiencing lots of small losses or do they tend to go out in a blaze of glory? By 'blaze of glory' I mean where the trader has large positions in one or two trades and those trades don’t work out?

What does failure look like for traders? Is it blowing up their account so there are no dollars left to trade with, or could it also be where the trader is needing to continually top up their account? Or could it be that they don’t want to look at their results and bury their head in the sand?

Do you consider quitting ‘failure’? Why do traders quit?

People often think they’re doing well in the markets, because they remember their winners – but when you check their actual stats, they aren’t profitable. Have you noticed that and what can be done about it?

How can we get traders to face reality when things aren’t going well?

Do you see self-sabotage as a common issue? How do traders recognise it before it devastates their account?

Is there any research on this topic in relation to traders? (Bill – maybe talk about gambler’s ruin here or other cognitive biases)

Do you have a ‘try this at home’ tip?

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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