Good morning, tradersā¦
Iām sure youāve heard the common statistic that ā90% of traders lose money.ā
This might strike fear into the hearts of many aspiring traders.
I get it. I wouldnāt take an individual trade with a 10% chance of success.
But thatās not what this is.
This stat doesnāt mean trading is a lottery. It means most people approach trading the wrong way.
The options market isnāt easy, but it is beatable.
Take it from meā¦
Weāve already completed two small account challengesā¦
Turning $1,000 ā> $3,000 ⦠TWICE.
Now weāre giving ourselves a bigger challenge:
To make a 400% return on a new small account.
$1,000 ā $5,000 by October 14.
And this time weāre doing it LIVE.
Join me and Danny Phee TONIGHT, July 17 at 8:00 p.m EST to see how weāll conquer the challenge together.
Our last two challenges have proven the options market is beatable. Then why do so many traders lose money?
It Comes Down To 4 Main Reasonsā¦
Reason #1: They Donāt Have a Plan
Out of everyone who trades on planet Earth, how many write down a game plan before entering a position?
Iād guess about 10%. Itās not a coincidence that the same % of traders make money consistently.
SPOILER ALERT: Theyāre the same traders.
Most ātradersā (I hesitate to even call them that) donāt have a plan. Thatās why they lose.
When I was playing Division I basketball, we ran scrimmages as a team to memorize our plays.
We did it every day, over and over again, until the entire playbook was ingrained in every one of our brains.
A trading plan is like your playbook. Having one is the difference between being a bad pick-up basketball player and being Michael Jordan.
Every trade plan should include:
- Ticker
- Entry time and exit time
- Entry share price and exit share price
- % Gained/Lost
- Volume
- Market cap
- Charts
- Catalyst
- General Notes
Add a separate section for options columns:
- Expiration date
- Contract price
- Call or Put
- Option Volume
- Open Interest
- āThe Greeksā – delta, gamma, theta, and vega
Without this plan, youāre not trading ⦠youāre improvising.
Reason #2: They Donāt Set Stop Losses
I canāt tell you how many times Iāve seen traders on social media posting a trade down 99%.
Or worse, an entire account down 99%.
Why? Because most ātradersā donāt even set stop losses.
They watch their positions bleed all the way to zero as if theyāre powerless to do anything about it.
Donāt be like these people.
You need to automatically close losing trades at a certain price so the position doesnāt wreck your whole account.
If you donāt manage risk, one bad day can take you out of the game.
But if you set stop losses on every trade, youāll never take an account-ruining loss.
Reason #3: They Donāt Study Outside of Trading
Markets coalesce news, finance, human psychology, global affairs, geopolitics, and much more to form the big picture.
The best traders in the world are genuinely interested ā and incredibly well-researched ā in all of the topics I just listed.
You canāt take shortcuts. To win in trading, you need to:
- Understand how markets workāthings like trading hours, order types, exchanges, options chains, etc.
- Read the news dailyāif you donāt know whatās happening in the world, current events will catch you off-guard (and potentially ruin your trades).
- Stay curiousāyou need to be inquisitive, always looking for that elusive piece of the narrative that the rest of the market is sleeping on.Ā
Reason #4: They Overtrade (and Revenge Trade)
Most people just trade way too much.
When theyāre winning, they feel invincible. They think itās time to āpress their edge.ā
Thatās textbook overtrading.
When theyāre losing, they think they need to claw it back, to ātrade their way outā of the hole.
This is textbook revenge trading.
Both practices almost always end in disaster.
How much trading is too much?
Youāre not overtrading if:
- You wait for setups that check all your boxes.
- You follow your rules (even when itās hard).
- You donāt change your plan or get emotional during big wins and losses.
Iāve taught thousands of people about the stock market.
These are the four problems I see time and time again, student after student.
If any of these issues sound familiar, stop what youāre doing and take a step back.
Only work on fixing that one aspect of your trading until youāre never making the mistake.
Do that, and you wonāt be a part of the 90% who loseā¦
Youāll be in the 10% that are successful.
Happy trading,
Ben Sturgill
*Past performance does not indicate future results