Why Humans Are Terrible Traders
If your trading isn’t boring, you’re doing it wrong.
Imagine this.
You’ve got your favorite chart up, coffee in hand, your rules taped to the wall… and then the market moves just a little faster than you expected. Suddenly, the plan doesn’t feel right anymore. You hesitate. You click early. You click late. Or you double down, “just this once.”
You didn’t lose because you didn’t know what to do.
You lost because you were human.
The uncomfortable truth:
Your brain is built for surviving in the wild, not for sitting in front of a candlestick chart.
For tens of thousands of years, survival depended on quick reactions to threats, immediate responses to opportunities, and a heavy bias toward avoiding loss. These instincts helped your ancestors dodge predators and find food. In the markets, they sabotage you.
Three deep-seated traits that make you bad at trading
- Loss-aversion
Behavioral economists Daniel Kahneman and Amos Tversky proved that the pain of losing $100 is roughly twice as strong as the pleasure of gaining $100. In trading, that means you’re likely to cut winners early to “lock in” gains, and hold onto losers hoping they’ll come back. - Confirmation bias
You’ll find the one indicator, headline, or social media post that agrees with your trade—even if ten others say you’re wrong. This isn’t a lack of intelligence; it’s a survival mechanism that evolved to make decisions faster in dangerous situations. In the market, it blinds you to risk. - Overtrading
That dopamine hit from a win? It’s addictive. Just like a slot machine, you keep pulling the lever. More trades mean more fees, more slippage, and—statistically—more losses.
The statistics don’t lie
- ESMA (European Securities and Markets Authority) data shows 74–89% of retail CFD accounts lose money.
- Barber & Odean’s landmark study of 66,000 brokerage accounts found that the most active traders underperform the market by 6.5% annually.
- Dalbar’s Quantitative Analysis of Investor Behavior shows the average equity investor lagging the S&P 500 by 6.1% per year over 20 years.
When you zoom out, the pattern is clear: the more “hands-on” you are, the more you underperform.
Life gets in the way
Even if you were a perfect emotional robot, there’s still the real world:
- Work calls just as your setup triggers.
- Kids need something right when your stop gets hit.
- You miss an alert because you’re making dinner.
No one—literally no one—can watch the market with perfect discipline every second it matters. And even if you could, mental fatigue would still erode your edge.
Discretionary trading is self-deception
Saying “I have a system” while making discretionary decisions is like saying you’re on a diet while eating dessert “just this once.”
If your setup doesn’t work 100% of the time—or you can’t identify exactly when it does—you don’t have a system. You have a loose framework that emotions will override when it matters most.
The only way out: Remove yourself
The only consistent way to defeat emotional bias and distraction is to remove yourself from the execution loop entirely. That means:
- Codify your strategy into clear, testable rules.
- Backtest those rules across enough data to prove they hold up in different conditions.
- Automate execution so every trade happens exactly as defined—no exceptions, no “gut feelings.”
Automation isn’t about building a magic money machine. It’s about building discipline in code.
What automation looks like
For me, it’s TradingView strategies sending webhook alerts to an automated execution engine that places trades directly in my Interactive Brokers account. No manual order entry. No chance for me to “just adjust this one.”
You can do the same. Whether you use off-the-shelf solutions or build your own, the key is full execution automation.
Here’s a place to start: Our IBKR Automated Trading Engine
The hidden benefit: time
Once your trading is automated, you get something back that most traders don’t even realize they’ve lost: your time and attention.
You can:
- Focus on developing or improving strategies.
- Keep your day job and steady income.
- Build a business, spend time with family, or just live your life.
Boredom is your edge
When people hear I run multiple trading strategies, they imagine excitement: screens everywhere, news feeds, constant adrenaline. The truth? It’s boring. My systems execute the plan, day in and day out, without my interference.
Boring is good.
Boring is consistent.
Boring pays.
If you remember only one thing from this article, let it be this: If your trading isn’t boring, you’re doing it wrong.
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