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Tom Hougaard, a seasoned trading educator and market veteran, has a brutal reality check for aspiring traders: your technical analysis skills probably aren’t the problem. Despite 25 years of advances in trading platforms, real-time data, and educational resources, the failure rate among traders remains stubbornly high at 76% to 80%. According to Hougaard, the answer isn’t more complex charts or sophisticated indicators—it’s something far more uncomfortable to confront.
Walk into any trading education seminar, and you’ll be bombarded with candle patterns, gap strategies, and forex techniques. Brokers and educators have built entire industries around technical analysis, but Hougaard argues this approach has “put the cart before the horse.” Even the best trading techniques offer only a 65% success rate—barely better than flipping a coin.
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This obsession with complexity isn’t new. Legendary trader W.D. Gann built a fortune selling intricate courses promising hidden market codes, appealing to the human brain’s tendency to equate complexity with value. Today’s trading education industry follows the same playbook, but the results speak for themselves: 90% of people still lose money.
Hougaard’s analysis of 25,000 forex clients revealed a paradox that explains why most traders fail. These clients were “very good at identifying winning trading setups” and had high success rates on profitable trades. Yet they were net losers because they “lost a whole lot more than they won.”
The problem isn’t identifying opportunities—it’s human psychology. Hougaard identifies several destructive patterns that plague traders:
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Believing Over Seeing: Traders cling to beliefs like “a stock that’s fallen must be cheap” rather than respecting market reality. Hougaard tells of a client who kept buying shares of Marone as it plummeted to zero, unable to accept what the market was telling him.
Winning Small, Losing Big: The natural human tendency is to lock in small profits quickly while letting losses run, hoping they’ll reverse. This creates the deadly combination of frequent small wins masking occasional devastating losses.
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