98% of Traders Fail? Says Who...?

[dtrader98]

Quote from daytraderbm2:

You know, I'm ABSOLUTELY SICK of people saying that 95%, or 98% (whatever it is) of traders fail. This is THE STUPIDEST THING I'VE HEARD. You don't have to lose much money... It's called TIGHT STOPS people - It's all of these idiots who put thousands into a stock, not knowing the market or that particular stock, then they lose a lot of their money and then complain because they did. If you do your research DAILY, study charts, study the chart setups, have a dedicated news source, and NOT GET GREEDY, then MOST people can make a great living trading for a living! Now all of you people who say most traders fail... just shut up... jeez

Nothing stupid about observing facts.
You sure you are not a broker?

"MOST people can make a great living..."
with...
"-TIGHT STOPS-" and day-trading.

The facts do not equate to your personal opinion.

 

[daytraderbm2]

I'm not saying that if you use tight stops, you can make a great living. I'm saying.... USE THEM to your advantage. And no, I'm not a broker. I just don't know where they come up with that number. Yea, people lose money, a lot of money, but it's probably from getting too greedy, trusting the market too much, going too large on size, etc... ALL I'M REALLY SAYING is that the success rate can be a lot higher if people would pay attention to the market.

 

[TraderZones]

Quote from daytraderbm2:

You know, I'm ABSOLUTELY SICK of people saying that 95%, or 98% (whatever it is) of traders fail. This is THE STUPIDEST THING I'VE HEARD. You don't have to lose much money... It's called TIGHT STOPS people -

Trading 101 BM2:

The tighter the stop, the more losses there are. There is NO free lunch.

I agree with the previous poster; you are in for serious trouble with such a simplistic understanding....

 

[TraderZones]

Quote from BullsEye:

Many people are fond of quoting the statistic that 98% of traders fail. Googling "% of traders fail" yields 4950 pages (interestingly, "% of traders succeed" yields only about 15 pages!).

A quick scan of the search results shows that the quoted percentages range from 80% to 99%.

Where do these statistics actually come from? Does anyone know of a reliable, verifiable source of this information, please?

And while we're on the subject, what exactly defines "failure"? Is it losing *all* of your money, all your *trading* money only, *some* of your money, breaking even, making less than 5%, quitting after 3 months, losing more money than you have (i.e. getting into debt), or what?

Thx!
BullsEye

I would liken trading to this:

1) John reads two books on successful gambling.

2) John takes $5000 to Vegas.

3) John starts playing at various games

4) The house has the edge. [as is the case with the market VS. new traders. Part of it is commissions, slippage, data/other feeds, trial&errors, subscription/mentoring costs, poor money management, disruptive market moves, etc...]

Now, what percentage of gamblers do you think still have their money after being active for a year?

 

[slapshot]

"What percentage of people fail at trading?" is really a subjective question. It depends on how you look at it, and over what sample of time. And how you define "fail".

For a benchmark, let's say fail = closed account due to losses

Many traders (me included) have a rough start over a period of years. They open a small account, blow it up, close it. Then they do that several more times until they get it.

So the same single trader may be counted as failing multiple times because they closed out several small losing accounts during their learning curve.

IMO, this skews the failure rate quite a bit. Especially over a short time frame sample.

----------------------------------------------------

-what percentage fail with only one year experience? It probably is 90%+, because only 1 out of 10 people are a natural that get something very easy (sports, learning language, job skills, etc.) the rest of us have to develop over time, it takes dedication, seat time and tenacity.

- but then what percentage fail after 3 years? Or 5 years? or 10? I'll bet this number is a lot lower. More like 70%.

I'll bet that at least 3 out of 10 traders that can hang in long enough get profitable eventually.

 

[IluvVol]

I cant help it but think you are one of the unfortunates ones. Hope I am incorrect ;-)

Your assessment, however, is blatantly incorrect because empirical evidence simply speaks against your statement. What issue do you have personally about how many % of traders blow up or not? Why do you care? You sound extremely emotional. And I think exactly letting this kind of emotion cloud your judgement and view is exactly the number one killer. If you made a lot then you should be happy that there are so many naive people out there who think its easy to get to riches by trading.

Cheers

Quote from daytraderbm2:

You know, I'm ABSOLUTELY SICK of people saying that 95%, or 98% (whatever it is) of traders fail. This is THE STUPIDEST THING I'VE HEARD. You don't have to lose much money... It's called TIGHT STOPS people - It's all of these idiots who put thousands into a stock, not knowing the market or that particular stock, then they lose a lot of their money and then complain because they did. If you do your research DAILY, study charts, study the chart setups, have a dedicated news source, and NOT GET GREEDY, then MOST people can make a great living trading for a living! Now all of you people who say most traders fail... just shut up... jeez

 

[IluvVol]

lol, sure, and you would be the most paid actor if you tried just a little harder.

Quote from daytraderbm2:

I'm not saying that if you use tight stops, you can make a great living. I'm saying.... USE THEM to your advantage. And no, I'm not a broker. I just don't know where they come up with that number. Yea, people lose money, a lot of money, but it's probably from getting too greedy, trusting the market too much, going too large on size, etc... ALL I'M REALLY SAYING is that the success rate can be a lot higher if people would pay attention to the market.

 

[Businessman]

The house has the edge. (as is the case with the market VS. new traders. Part of it is commissions, slippage, data/other feeds, trial&errors, subscription/mentoring costs, poor money management, disruptive market moves, etc...)

Plus alot of traders also want to make a living at it.

To make a living at it you have to probably beat 25K a year in costs like those described, then you have to make enough to beat your 25K living expenses (assuming you are single, no family or mortgage etc).

The average full time trader has to make 50K a year from the market just to break even.. Actually its more than that as your living expenses come out of after tax income.

Personally i pay $60K in commisions and slippage etc a year. Then i need to make $80K to cover living expenses (cars, mortgage, kids etc). So i need to make $180K from trading just to stay even at the end of the year (before taxes and trading costs). Well i do manage it, but it took me over 5 years to get to that point.

I can easily see why 95%+ fail to make a living by trading.

 

[bathrobe]

Quote from BullsEye:

Many people are fond of quoting the statistic that 98% of traders fail. Googling "% of traders fail" yields 4950 pages (interestingly, "% of traders succeed" yields only about 15 pages!).

A quick scan of the search results shows that the quoted percentages range from 80% to 99%.

Where do these statistics actually come from? Does anyone know of a reliable, verifiable source of this information, please?

And while we're on the subject, what exactly defines "failure"? Is it losing *all* of your money, all your *trading* money only, *some* of your money, breaking even, making less than 5%, quitting after 3 months, losing more money than you have (i.e. getting into debt), or what?

Thx!
BullsEye

I do not think most who try to trade first take the time to learn.
Similiar to the old saying "would you perform surgery w/o going to med school)

My friends do not understanding shorting, they say they do to avoid sounding unknowledgable but I am sure all they think is buy low sell high, and don't know the opposite is possible.

 

[TraderZones]

Quote from Businessman:

Plus alot of traders also want to make a living at it.

To make a living at it you have to probably beat 25K a year in costs like those described, then you have to make enough to beat your 25K living expenses (assuming you are single, no family or mortgage etc).

The average full time trader has to make 50K a year from the market just to break even.. Actually its more than that as your living expenses come out of after tax income.

Personally i pay $60K in commisions and slippage etc a year. Then i need to make $80K to cover living expenses (cars, mortgage, kids etc). So i need to make $180K from trading just to stay even at the end of the year (before taxes and trading costs). Well i do manage it, but it took me over 5 years to get to that point.

I can easily see why 95%+ fail to make a living by trading.

And all of this with the likely $5000 starter account... LOL