This is from the NYC Contact so big thanks to him for this
Why Most Retail Traders Lose Money Trading
1) They don’t understand how the market works from a qualitative standpoint.
(i.e. Market structure and Psychology)
2) They don’t have a very robust money management system. (By robust I mean leverages up when the probability of profit is very high, leverages down when the probability of profit is somewhat high, and stays out of risky assets when the probability of profit is medium or low)
3) They don’t understand Empirical Probability and Statistics as it applies to modeling trading strategies (i.e. Law of Large numbers, Weak Convergence, Normal vs Stable distributions)
4) They don’t understand proper strategy testing methodology (i.e. Backtesting which they either don’t do or do it incorrectly, Forward Testing/Monte Carlo Simulation of factor evolution, Real time Strategy Testing)FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!