The 3Ms – Secondary Reasons for Trader Failure

Earlier this month I made available a report to my subscribers called

“The Single Most Important Reason Keeping You Among the Losing 90%…..and It’s Not What You Think!”.

The reviews far exceeded my expectation. One review, in particular, prompted me to think…….

…….a splendid way to start the new series would be one on the 3Ms – the reasons most of us think of when asked why so many traders fail.

Here’s in part what he said in his review:

“The question I asked of myself is will I repeat the same patterns of the past so I appreciate your article.  First time it is bad luck and after a few times I can see the patterns and I have been questioning myself so your article is appreciated.”

That’s the key question, isn’t it? Why is it, despite all the improvements, in psychology, risk management and trading methods that over 90% of us still fail?

If I asked you the question, the top of mind answer you’d probably give would be Mind x Money x Method.  And, if I were asking you for secondary answers, you’d be 100% correct!

Mind x Money x Method = Trading Success


A) Mind means:

  • the consistent execution of our Money and Method rules, and
  • the willingness to engage in consistent and never-ending improvement (CANI)

B) Money means:

  • Risk management and

C) Method means:

  • A strategy that provides a positive expectancy

Notice the multiplication sign between each of the Ms. Because they are so linked, all 3Ms are needed for your success. And, notice too that the degree of our success is limited to the weakest link (the weakest “M”) in the chain.

But, what if I wasn’t asking for secondary answers? What if I was looking for the ‘single most important reason?’ That report we’ll look to make available in February. In the meantime, I’ll do a series on Mind, Money and Method. We’ll start the first of the series on Wednesday, January, 24.

So, see you here next Wednesday. I’ll be asking for reviews and comments are on par with those of “The Single Greatest Reason”,  I may turn the whole series into an e-book and provide it free to all who comment.

What do you think? Sound good?


5 thoughts on “The 3Ms – Secondary Reasons for Trader Failure”

  1. Dear Ray, that is too good to be true. Looking forward to your upcoming article. Already start cracking my head for the answer. ?

  2. Hi Ray, Re; the 3 “M”s. Would EAs solve the problem? 1st.M Because is consistent execution.
    2nd.M you can program risk management.
    3rd. M Strategy can be backtested.
    Several years ago i got into EAs but eventually blew my account, maybe technology has advanced since.
    But could it be a viable solution or maybe aid in implementing the 3 “M”s?
    cheers Baz

    1. Thanks Baz

      Thanks for the suggestion.

      Thanks for the suggestion. Great if EAs would! But, unfortunately, I don’t think so. Here’s why.

      1) EAs, mechanical systems, algos rely on an assumption about the current market condition e.g. sideways choppy or strongly trending (etc). If the system goes into a drawdown mode, the trader needs to determine if the assumption is still operating or whether the system is merely experiencing a drawdown mode.
      2) The trader still needs to implement consistently hist position sizing irrespective of or because of results (see my blog on Money when I publish it for the full impact of the last sentence).

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