Are you a successful trader?

[volente_00]

Quote from FredBloggs:

dont know where you get 95% from, but....

there was a poll carried out by brokers, and the findings suggested that 80-90% (cant remember which) of accounts either blew up or threw in the towel after 6-9 months.

this is all customers. no distinction between time frame, method etc. besides, such criteria is pointless anyhow. the reasons for failure are 3 fold: not understanding risk, not understanding or following the approach/plan/method, or not understanding the impacts of diversification or hedging (where appropriate). NONE of these have anything to do with the time frame (investment or day trading) or any specific method.


i also see it at pointless though. as joe ross once said, statistics only predict. it is up to YOU whether you succeed or fail.

as a side note however, i think if we read all the time that 80% fail etc, then this programmes our subconscious to fail if we are not careful. perhaps a reason why some internet sites can do more harm than good?

Do you have a link to those statistics ?

I would be interested to see how many of those failed accounts were under 50k on initial funding.

 

[FredBloggs]

Quote from volente_00:

Do you have a link to those statistics ?

I would be interested to see how many of those failed accounts were under 50k on initial funding.

sorry i dont. just something i read a while back. try the nfa. the article was aimed more at futures traders - but i dont know if the stats included stock accounts as well.

 

[bitrend]

Its simple math, 99 traders out of 100 can be winners, the one who did lose, lost 99k, and all the winners got 1k each .
Why should 90% be losers

In this case, there's only one true winner, The Broker, who will take 1K each from the 99 traders.

 

[Thunderdog]

At this moment, 24 of the 67 poll respondents thus far are claiming to earn at least 10% per month. That represents over one-third of respondents.

Since the benchmark is at least 10% (i.e., 10%+), we can only assume that some of these high-end respondents are earning more than that. Let us assume that these savvy traders have a risk management system in place that reflects the rising value of their trading accounts resulting from these 10%+ monthly gains. Let us do so by reasonably assuming that they adjust their trade size (or risk per trade) on a monthly basis to reflect the then current value of their account. Stated differently, let us assume that they "compound" monthly, because that is the resulting effect. With that in mind, the annualized return based on this simple monthly compounding is 214%. And that's only for the guys who are earning 10% per month, not 10%+.

So, more than one-third of respondents are claiming to be earning at least 214%.

Bullshit.

 

[trader28]

Quote from Thunderdog:

At this moment, 24 of the 67 poll respondents thus far are claiming to earn at least 10% per month. That represents over one-third of respondents.

So, more than one-third of respondents are claiming to be earning at least 214%.

Bullshit.

Well it is the internet where every girl you speak to is a supermodel and every guy looks like Brad Pitt

 

[alraaayeq]

many readers thought that such results does not tell you that you will probably be XYZ% failure and ABC% successful, instead you can use this poll with other online polls and do matching and analysis on them and then see why do many people talk about stocks/online trading as it is the way to be rich people where the facts"polls" shows something different?

Sometimes, I can use such results to tell my colleagues/friends .. Hey look at this, you are not alone, you can learn from others and put your expectations from the beginning.

and sometime, if I have X amount of money, I would say ...Hmm!! doing stock trading is not good idea as most of people failed, let us put it in fastfood or real estate services as the risk is much lower and the chance to get bigger/rich is higher.


what do you think guys?

 

[granville]

I think +10%/Month is a bit excessive.

I am -without a doubt- certain that it is possible. However, I think it is unlikely.

Add in compounding and such a trader could buy all of Saudi Arabia's assets in a short decade or two.

Maybe they have?

 

[JORGE]

For the average trader with a retail account of 100k or less, you need to make at least 10% a month just to make a living. Assuming that trading is your income, the compounding argument does not apply as you would be sweeping profits out on a regular basis.

 

[Thunderdog]

Quote from JORGE:

For the average trader with a retail account of 100k or less, you need to make at least 10% a month just to make a living. Assuming that trading is your income, the compounding argument does not apply as you would be sweeping profits out on a regular basis.

The compounding argument applies regardless. Only a fool would "sweep" out money that could be earning 10% or more per month before compounding. At those rates of return, it would even be worthwhile to live on credit card debt, because the cost of borrowing is much, much lower than these alleged returns. Why would anyone just tread water indefinitely, as you suggest, if they could live beneath their means for a relatively short period of time and then retire early?

Let us use your example. If the trader with the 100k could manage to "somehow" set aside only 25k, which he would allow to compound at the suggested rates of return, that 25k would compound to well over $7 Million after a 5-year period. Admittedly, that calculation is pre-tax, however it is compelling nonetheless. Factor in your tax rate, thereby reducing the compounding effect somewhat, and you will still find that it is preposterously stupid not to let earnings compound at such a rate, even if it means living in near squalor for a time.

Against this background, I will maintain my initial assessment regarding the poll's proportion of such stellar traders:

Bullshit.

In fact, what this poll confirms is that ET has more than its fair share of shameless liars.

 

[volente_00]

Quote from Thunderdog:

Only a fool would "sweep" out money that could be earning 10% or more per month before compounding. At those rates of return, it would even be worthwhile to live on credit card debt, because the cost of borrowing is much, much lower than these alleged returns. Why would anyone just tread water indefinitely, as you suggest, if they could live beneath their means for a relatively short period of time and then retire early?

Because in a futures account your money is not insured by the SIPC .