90% traders don't make it???

[Tradewright]

Here is link to article that cites source for much quoted "90%" rule. They cite a study based on 68 accounts at one branch of All-Tech in 1999.

http://money.cnn.com/1999/08/09/markets/daytrade/

 

[ozzy]

The first year or so is very tough. The key is not to quit and keep at it. I know when things begin to roll my way that "I will tear the market a new asshole" but in the meantime I am in hibernation mode (learning everything I can).

Patience and having the right mind set is very important.

Pit Bull
ozzy

 

[gkishot]

90% of people don't make it just proves that technical analysis does not work.

 

[Neodude]

Quote from gkishot:

90% of people don't make it just proves that technical analysis does not work.

Before you can make that statement you should be able to prove the following:

1. Most of those who failed used technical analysis.
2. They knew how to use it properly.
3. Non of the people who succeeded used technical analysis.
4. There is no other factor that caused them to fail besides the use of technical analysis (like stupidity).

You statement uses flawed logic. Its like saying that 90% of people can't program their VCR, therefore all VCRs must be broken...

-Neo

 

[gkishot]

Quote from Neodude:

1. The 90% of people who failed depended on technical analysis.

What else? As far as I know that's the most popular & advertised way to trade anything - from stocks to forex & futures. The people who succeed are the ones who do not use it.

4. There is no other factor that caused them to fail besides the use of technical analysis (like stupidity).

There is nothing wrong with people in general. The technical analysis is stupidity by itself.

 

[40yotrader]

Quote from Tradewright:

Here is link to article that cites source for much quoted "90%" rule. They cite a study based on 68 accounts at one branch of All-Tech in 1999.

http://money.cnn.com/1999/08/09/markets/daytrade/

Apparently 100% of associations claiming to be the voice of daytraders have also gone out of business.

Here's the electronic Traders Association website:

http://www.electronic-traders.org/

 

[ozzy]

TA is but one ingredient in the trading soup. As Neo pointed out your comment is flawed.

ozzzy

Quote from gkishot:

What else? As far as I know that's the most popular & advertised way to trade anything - from stocks to forex & futures.



That's because technical analysis is stupidity by itself.

 

[PuffyGums]

Quote from gkishot:

90% of people don't make it just proves that technical analysis does not work.

How true!

In poker there is a beginning level which is to play the cards you have. The second level is to play the cards the other guy might have. The third level is supposedly to be able to play the cards you want the other guys think you have.

Whats a good analogy in trading? Technical analysis is like playing the cards you are given. You have to realize that all of TA is rearward looking, post-diction. If you have enough data points you can always make pretty pictures with triangles and channels and such. Its all BS.

To get an edge you have to understand what is really happening in the market (the way order flow alternates from buyers to sellers, how volatility moves in cycles - low volatility is replaced by greater volatility which is replaced by low volatility. How the big traders put the squeeze on the weak hands..etc...)

TA actually presents the trader with stuff that can accept multiple interpretations. TA is designed to trick the trader.

One can figure out how this came to be. The data that stock trading provides (price = magnitude, time = time and volume = force) are things can be analyzed with math and physics. With modern refinements like chaos one could think the holy grail of trading was within reach.

Unlike physical systems, trading involves people (aka 'intentionality,' to use the philosophy terminology). The patterns of people are not random, but are also not predictable since people can 'fade' what might be expected from what they 'should' do.

 

[Neodude]

gkishot, PuffyGums,

I think any response I make will fall on deaf ears, because you have already made up your minds. But to connect one cause and effect in the way you just have is simply flawed, it is bad science.

Like any tool TA is not cut out for every job. There are people who know when to use it and when not to. To assume that it is pure bullshit because you can't use it or because you assume that all those who failed also used it without personally knowing all the other factors that might have contributed to their failure is ignorant.

And even though I do not use technical analysis I do know traders who use it successfully in combination with other techniques, this includes institutional traders.

I have nothing else to say, except that I hope you find something that works for you.

-Neo

 

[Charlie Dow]

Quote from gkishot:

What else? As far as I know that's the most popular & advertised way to trade anything - from stocks to forex & futures. The people who succeed are the ones who do not use it.

There is nothing wrong with people in general. The technical analysis is stupidity by itself.

I take it from your statement that you assume TA is stupid because you don't understand it and can't figure out how to use it successfully. Under the same line of reasoning nuclear fission is stupid because 90% of the masses don't understand it and can't figure out how to use it in their daily existence either, right?