what do institutional traders know that retail don't?

@godswillfx - 1 month ago

Institutional traders have been able to solve the problem of psychology by creating and enforcing daily loss limits. Once an institutional trader makes up to 3% loss in a day, the trading platform automatically shuts him out. retail trading software does not have this feature, so retail traders are allowed to self-destruct aka blow their accounts

True, institutions enforce daily loss limits to protect capital from emotional spirals.

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@pierre_r_carosso - 1 month ago

Trading was not originally designed for retail players because for most it is just a zero sum game. Institutional traders have access to specially designed economic models that can analyze an asset thoroughly and predict with some level of accuracy, which way the market is headed for the period under review. Retail traders don't have access to such high-level tech and are basically bringing a knife to a gun fight.

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@arthur_wildberry - 1 month ago

Institutional traders have been able to solve the problem of psychology by creating and enforcing daily loss limits. Once an institutional trader makes up to 3% loss in a day, the trading platform automatically shuts him out. retail trading software does not have this feature, so retail traders are allowed to self-destruct aka blow their accounts

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@josiah_edem - 1 month ago

Quoted - godswillfx

True, institutions enforce daily loss limits to protect capital from emotional spirals.

When you want to trade a very big lot size in a bank, the trade must go to your trading manager/supervisor for approval/override. This means you cant exceed your risk limit, whereas retail traders can do as they like 😂

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@godswillfx - 1 month ago

Quoted - josiah_edem

When you want to trade a very big lot size in a bank, the trade must go to your trading manager/supervisor for approval/override. This means you cant exceed your risk limit, whereas retail traders can do as they like 😂

That's true for prop desks and bank trading, strong institutional risk controls.

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@godswillfx - 1 month ago

Quoted - josiah_edem

When you want to trade a very big lot size in a bank, the trade must go to your trading manager/supervisor for approval/override. This means you cant exceed your risk limit, whereas retail traders can do as they like 😂

Retail traders "can do as they like" with their own capital, but good ones still enforce personal risk limits. No oversight doesn't mean no discipline. Blowing up is easy either way.

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@chris_4eva - 1 month ago

Quoted - godswillfx

Retail traders "can do as they like" with their own capital, but good ones still enforce personal risk limits. No oversight doesn't mean no discipline. Blowing up is easy either way.

The "good ones" are not up to 5% that's why the failure rate is 95%. Trading without supervision/guardrails is one of the major reasons for retail trader failure. That is why prop firms came along to enforce discipline but even the prop firms have ulterior motives these days thats why the failure rate at prop firms is also 95%

@godswillfx

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@godswillfx - 1 month ago

Quoted - chris_4eva

The "good ones" are not up to 5% that's why the failure rate is 95%. Trading without supervision/guardrails is one of the major reasons for retail trader failure. That is why prop firms came along to enforce discipline but even the prop firms have ulterior motives these days thats why the failure rate at prop firms is also 95%

Discipline and guardrails are crucial,most retail traders fail due to poor risk management and psychology, not just lack of supervision.

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@godswillfx - 1 month ago

Quoted - chris_4eva

The "good ones" are not up to 5% that's why the failure rate is 95%. Trading without supervision/guardrails is one of the major reasons for retail trader failure. That is why prop firms came along to enforce discipline but even the prop firms have ulterior motives these days thats why the failure rate at prop firms is also 95%

Prop firms help some, but the 95% failure often comes from overly aggressive targets and rules designed more for revenue than genuine skill-building. Real edge comes from proven process + experience, not just external rules.

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