98% of Traders Fail? Says Who...?
- Thread starter BullsEye
- Start date
Probably, but after my last post I got to thinking how many millions of people consider themselves traders in some capacity or another. Everybody I know has lost money in securities. I recently saw old friends and told them what I do, there thinking was "if he can do it I can" and they proceed to basically donate 200k collectively to es traders who make money.
When Jim Cramer's TV show first came out an entire new huge generation of people decided for a time to become traders, most are probably losers (statistics combined with terrible advice the Cramer followers fail rate is probably higher)
Who knows for sure but the general public does not want to put the time in to learn, they would much rather loose a great deal of money and than pay someone a fee to trader for them.
Quote from NoDoji:
I heard that 100% of traders who counter-trade Cramer are profitable
I would agree, I heard about this about 1 year ago and watched Cramer that night he was at the UVA school of business, he came out pumping Under Armor (even wearing an under armor shirt over his dress shirt and tie) The following morning a purchased an in the money put on UA and it dropped $18 dollars in a matter of days of him making the recommendation.
I believe this style of trading even has a name. "The Cramer Fade"
Harvey Houtkin, the principal of All-Tech, himself has implied that the vast majority of day traders lose money. Houtkin was quoted as follows in an article in the February issue of Securities Regulation and Law Report :
"Day Trading is a business like any other. Itâs not wild speculation. And, like other businesses, 95 percent will fail in the first two years."
http://www.nasaa.org/content/Files/NASAA_Day_Trading_Report.pdf
PSI staff have compiled strong anecdotal evidence suggesting that day trading is highly unprofitable. Much of this evidence comes directly from day trading firms themselves, although the firms continue to speak about day trading careers in glowing terms when talking with potential customers. Barry Parish, the former manager of All-Tech=s San Diego office, admitted during his Subcommittee deposition that eighty to ninety percent of customers who traded at the San Diego office lost enough money to quit within six months.[196] Mr. Houtkin would not take issue with Mr. Parish=s estimate but did indicate that he believes only about one-third of all day traders ever become full-time traders.[197]
In addition, All Tech=s Branch Office Surveys (ASurveys@) from the Boca Raton and Seattle offices indicate that very few customers were turning a profit. In response to the survey question Awhat percentage of your customers are making money,@ the former manager of the Boca Raton Office wrote A0%@[198] and the branch manager of the Seattle office wrote A>10%.@[199] All-Tech=s Chicago office had the most successful traders, noting on the survey that A30%@ of the traders were profitable.[200] In an interview with Subcommittee staff, the Seattle branch manager estimated that about 90 percent of his Seattle customers lost money.[201]
The chances for success were equally grim at Providential. Mr. Fahman testified that only about 20 to 30 percent of traders at Providential make money.[202] Tae Goo Moon, the branch manager of Providential=s Los Angeles office, reported in his response to Subcommittee interrogatories that none of the day traders in the Los Angeles office were profitable.[203] In fact, Mr. Moon estimated that the average day trading customer traded for approximately one month before quitting, and lost approximately $50,000.[204] At his Subcommittee deposition, Mr. Fahman did not dispute Mr. Moon=s estimates.[205] He added that only a Acouple@ of day traders at Providential=s Oregon branch office were profitable and that a substantial majority lost money.
"Similarly, Mr. Bright, of Bright Trading, stated in a press account that fewer than 10% of day traders will turn a profit if the trader universe includes those who trade out of their homes."
http://www.senate.gov/~gov_affairs/022400_report.htm
"Day Trading is a business like any other. Itâs not wild speculation. And, like other businesses, 95 percent will fail in the first two years."
http://www.nasaa.org/content/Files/NASAA_Day_Trading_Report.pdf
PSI staff have compiled strong anecdotal evidence suggesting that day trading is highly unprofitable. Much of this evidence comes directly from day trading firms themselves, although the firms continue to speak about day trading careers in glowing terms when talking with potential customers. Barry Parish, the former manager of All-Tech=s San Diego office, admitted during his Subcommittee deposition that eighty to ninety percent of customers who traded at the San Diego office lost enough money to quit within six months.[196] Mr. Houtkin would not take issue with Mr. Parish=s estimate but did indicate that he believes only about one-third of all day traders ever become full-time traders.[197]
In addition, All Tech=s Branch Office Surveys (ASurveys@) from the Boca Raton and Seattle offices indicate that very few customers were turning a profit. In response to the survey question Awhat percentage of your customers are making money,@ the former manager of the Boca Raton Office wrote A0%@[198] and the branch manager of the Seattle office wrote A>10%.@[199] All-Tech=s Chicago office had the most successful traders, noting on the survey that A30%@ of the traders were profitable.[200] In an interview with Subcommittee staff, the Seattle branch manager estimated that about 90 percent of his Seattle customers lost money.[201]
The chances for success were equally grim at Providential. Mr. Fahman testified that only about 20 to 30 percent of traders at Providential make money.[202] Tae Goo Moon, the branch manager of Providential=s Los Angeles office, reported in his response to Subcommittee interrogatories that none of the day traders in the Los Angeles office were profitable.[203] In fact, Mr. Moon estimated that the average day trading customer traded for approximately one month before quitting, and lost approximately $50,000.[204] At his Subcommittee deposition, Mr. Fahman did not dispute Mr. Moon=s estimates.[205] He added that only a Acouple@ of day traders at Providential=s Oregon branch office were profitable and that a substantial majority lost money.
"Similarly, Mr. Bright, of Bright Trading, stated in a press account that fewer than 10% of day traders will turn a profit if the trader universe includes those who trade out of their homes."
http://www.senate.gov/~gov_affairs/022400_report.htm
Quote from NoDoji:
I heard that 100% of traders who counter-trade Cramer are profitable
I did counter-trade Cramer in the early stages of the program (Q4 2005/Q1 2006), and made some decent change shorting his program picks. After that time though, he doesn't seem to move the stocks in after-hours as he used to (people got smarter!), and I didn't do it anymore.
I'd like to know how many specs derive their sole income from trading.
To me, thats the true definition of success or fail.
Bet that number is somewhere around 2%.
To me, thats the true definition of success or fail.
Bet that number is somewhere around 2%.
another factor is, how many of those few percent who MAKE money continue doing so year after year?
I have seen people here on ET who declared themselves as becoming profitable traders, after a couple of successful months. Then, they seem to disappear