5% of traders that make money

[traderdragon2]

Quote from SteveD:
If some trader is talking on a cell phone he would be removed from the floor by security at once....

SteveD [/B]

Who would be stupid enough to do this right on the floor? Come on now.

No one is claiming floor traders are pulling out cell phones right there in front of a thousand people and cameras.

A broker could recieve the phone call from an institution for a million share order, then walk to the bathroom, sit on the crapper and send a text message on his prepaid cellphone with the letters "AAPL 5" to his "buddy". HINT: 5 million shares of APPL being bought.

Or use some simple encryption like:

BQQM5 <--- shift letters one position and tack on the number.

Looks like a garbage text message from a random person

 

[maxpi]

Quote from traderdragon2:



Drug dealers do it, surely youre smarter than a drug dealer mr hot shot broker LOL

I've studied both kinds of markets up close for decades, I'm betting on the drug guy!!

 

[HoundDogOne]

"we lose about half the first year"

"by the third year, everyone is pretty much making money"

This is not exactly hard information...
But read between the lines...
And Mr. Bright's numbers tend to support the 5% figure.

A successful trader IS NOT "pretty much making money".

The opportunity cost for an individual of this talent level...
In other words...
The COST of forgoing an engineering or law or other business career to trade instead...
Is at least $75-100K/year.

So only traders that can consistently take home that or more FOR A LIFETIME...
Can be considered "successful"...
And that percentage is 5% or less for ALL Zero Sum Games.

 

[Renegen]

And money is the only objective of trading.

 

[pamjoey]

Hi Don,
Thanks for listing the numbers of the success ratio at your school.
Just started my 2nd year of trading, and while not making any money yet, hopefully i will be soon.

Would you say that mental state of mind & the physcology of trading are why so many fail?

joey

 

[HoundDogOne]

Quote from Renegen:

And money is the only objective of trading.

Actually...
Money is not even the #1 objective of trading...
Though social status and income have a high correlation.

Many traders are non-conformists...
In the same sense that most artists are non-conformists...
And cannot handle the idea of being a Corporate Serf.

I would rate the Objectives of trading in the following order:

(1) Doing what you love... and are good at. Quants are born, not made.

(2) Creating an independent, non-conformist lifestyle.

(3) Business success and money.

So one could actually be a "subsistence trader" making $20,000/year...
And satisfy the Top 2 objectives.

In the same sense...
A fringe "subsistence poker player" in Vegas making $20,000/year...
Might be living a very dodgy existence...
But could satisfy the Top 2 objectives.

One problem is age, long-term expectations, and what your age peers are accomplishing.

At 25...
Many can be very happy at "subsistence level" income... and can view it as "successful".

At 45...
NO ONE will be happy at this level... or view it as "successful".

 

[Don Bright]

Quote from pamjoey:

Hi Don,
Thanks for listing the numbers of the success ratio at your school.
Just started my 2nd year of trading, and while not making any money yet, hopefully i will be soon.

Would you say that mental state of mind & the physcology of trading are why so many fail?

joey

As I tell all my traders - "Trading is simple, but the psychology involved is murder"

And the "trading is simple" part only applies if you have taken the time to learn what the heck you should be doing. I can't believe that I still get people who think that "trading" is either "picking stocks" or "choosing market direction" - and I have to explain the facts of life to them, LOL.

Don

 

[henry76]

Dear Don , no offence but you did say
"Even if only 5% of brand new traders make money (it's more than that, IMO)...so what?"
just to be clear.However if i'm mixed up, or wrong I apologise and stand corrected .

 

[Don Bright]

Quote from henry76:

Dear Don , no offence but you did say
"Even if only 5% of brand new traders make money (it's more than that, IMO)...so what?"
just to be clear.However if i'm mixed up, or wrong I apologise and stand corrected .

LOL...yes, "even if only 5% of NEW traders make money" - not "5% of traders make money" - how long are you really a "trader" if you don't make money? After a year or two, I would guess 90% of "traders" make money, or they would no longer be trading...that's all I'm saying.

If I have 100 new people start, about half are still here in year two, and we may lose a few more in that second year, but by the third year, you're either making money - or you would likely decide to do something else.

Don

 

[henry76]

to be fair you said yourself "it's more than that", frankly I'm a little dissapointed , it doesn't really matter 5% more or less , I just happen to like integrity, maybe you exaggerated a little, no problem ... atleast not to me .