Brandt on why novice traders lose money

In his Post dated August 16, Peter Brandt gives reasons why novice traders lose money. This is what he says:

There are many reasons why 80% to 90% of novice traders end up losing money. Among the reasons include:

• Being under capitalized
• Taking way too much risk (expressed as a % of capital per trade)
• Attempting to pick tops and bottoms
• Chasing markets
• Becoming obsessed by a scenario (e.g., Silver MUST go up)
• Trading with trading range
• Being compelled to become a day trader

I believe the above reasons, in composite, account for 80% of the failure among pedestrian traders.
When I talk about “trading with trading ranges,” my specific reference is to the habit of buying on bulges and selling on dips or buying at the top end of the ranges and selling at the bottom end of ranges. The mentality of the novice trader in this regard goes like this … “The market is really strong, it is going to breakout out this time … I want to get in before it breaks out.”

My Notes:

Peter avoids all trading inside a trading range, buying only after a break out, selling  after a breakdown.