Why do most day traders fail

Pitfalls in day trading

For day trading beginners there are a lot of pitfalls waiting for them. Some come up with almost every beginner, so we've compiled a small list for you below. This does not claim to be complete, but is intended to protect you from a few beginners' mistakes.

Only trade with money that you don't absolutely need!

This means that you should only invest money in day trading if you are ready to lose it all in an emergency. However, you should never trade in capital that is essential to you.
If you have to think about your children's education and home mortgage payments with every trade you make, you will no longer be able to make neutral and unaffected decisions. But this is a sure route to ruin. As paradoxical as it sounds - only when you no longer have to make profits will you make some.

Keep feelings out of your decisions!

A violation of this rule is likely to be the reason for the failure of most day traders. If you make emotionally tinged decisions, you will soon be broke. Emotions when trading can affect every trader, from existential fears to disappointment and anger.
This happens particularly quickly if, while you are working, you start to think about what you could have bought with the losses you have incurred today. Often times you will then try to get the lost money back with increasingly risky trades and lose a lot more in the process.

Pressure to succeed

The pressure to succeed from the opinions of those around you can also lead to wrong and risky decisions. Especially when you have given up your job or your own business for day trading, the pressure that is indirectly exerted on you by family and friends is often very high. You are seen by many as a "gamer" and a "crank" because stock market transactions and especially day trading are still portrayed as a casino by articles in the press.
If you then have to admit unavoidable losses in the beginning, the willingness to take risky trades usually increases in order to prove to the know-it-alls in your circle of relatives and friends that your decision to day trading was correct. Just as dangerous is the pressure to succeed that you can put yourself under. Many traders fail to see that losses are inevitable some days. They try to fight the market and justify their own decisions because they don't want to admit that they were wrong. This means that stop loss limits are not adhered to, because one is sure that this share is "guaranteed" to recover.
Hardly any trader has ever gone bankrupt through an almost endless series of small losses, but mostly through sticking to wrong decisions to the bitter end. Two or three such stocks can wipe out all of your capital.


Greed is one of the great dangers of any trader. Especially with highly leveraged trades like Forex trading, many beginners only see the potential profits. If things go well for a while, overconfidence often blinds objective decisions, too large positions are traded with too much risk - a sure way to ruin.


If you want to make a living from trading, you need to plan in enough start-up capital, just like any other business. This also includes costs for course supplies, the necessary equipment, training, books and so on.

You shouldn't expect utopian win rates, stay realistic! Too little capital and the compulsion to have to live on the income leads to taking risks that are far too great and too large positions.