How many traders are actually making a living?

[dozu888]

As i was checking through the other thread, someone said 1% is the number of people making a living. Seems kinda realistic to be honest.

in a zero sum game, 1% is about right.... think out there how many guys play golf/tennis/football/poker/sports betting for a living.... 1% isn't far off for any of them.

 

[newwurldmn]

According to the SBA, 95% of small businesses fail within 5 years. Probably only 1% are really thriving and providing enough for a good living.

Seems like a general principal across the spectrum.

No they don’t.

https://www.sba.gov/sites/default/files/Business-Survival.pdf

 

[ETJ]

There a lot of noise in many of these samples. Why aren't darts and volume lower if the failure rate is so high - new entrants? At some point, the numbers should decline. Look at options where retail has a bigger presence than other asset classes and the numbers are still pretty strong.

 

[fan27]

This is speculation as I do not have data to back it up, but I suspect that of those traders that successfully trade for a living (no other sources of income), less than 1% of those traders do so with capital less than $100,000 (or an equivalent value based on geography, cost of living, etc).

 

[maxinger]

According to broker reports, around 80% of retail trading CFD are STRAIGHT UP LOSING. And even this seems like an optimistic number.

I would say:
if 80% are losing
----another 10% are just getting by and not losing(breakeven)
--------5% are making some money
------------4% are making a living
-----------------1% are ballers


What do you think? Or is there any sophisticated data on the topic with more details?

Your data looks very representative of what is really happening in real world.

 

[ironchef]

1%? I like those odds - sign me up!

If you are well capitalized, with a few years of living expenses, and about 5-10 years of experience than the success rate rises. The stat's count every noob that put $100-$500 into a Fx or penny stock acct and made a 1-3 month run at it with no experience & unrealistic expectations.

The typical background of an independent trader making a living is they first put together some decent operating capital from investing & trading over the long term while working full time. Their trading business is funded from profits they already made - a positive feedback loop.

The bull market is attracting many trying to make a living upside down - they hope to make a lot of profits with a little bit of capital & experiencing, they think they will be the exception in not having a long & expensive learning curve. This is your 99% crowd, no wonder.

You just layout a surefire roadmap on how to successfully plan for a trading career (second career). However, I doubt the 20 or 30 something will listen or believe you.

 

[dozu888]

According to broker reports, around 80% of retail trading CFD are STRAIGHT UP LOSING. And even this seems like an optimistic number.

I would say:
if 80% are losing
----another 10% are just getting by and not losing(breakeven)
--------5% are making some money
------------4% are making a living
-----------------1% are ballers


What do you think? Or is there any sophisticated data on the topic with more details?

if 5% are making some money, how can 4% live on it? maybe using some food stamps at the same time lol... and living in parents basement...

 

[tiddlywinks]

if 5% are making some money, how can 4% live on it? maybe using some food stamps at the same time lol... and living in parents basement...

He's saying it's 4% of the not losing 20%, which has a modicum of logic to it... of the 20% that are not losing, 20% of those are making a living.

 

[dozu888]

He's saying it's 4% of the not losing 20%, which has a modicum of logic to it... of the 20% that are not losing, 20% of those are making a living.

ok makes sense now.... but I just don't see it, no way in any zero sum game you can have 4% making living out of it.

the CFD data seems to be just a slice view... 80% losing, but during how long a period... per month? that's quite a gap from the question of 'making a living' which requires year round sustainability..

 

[tiddlywinks]

ok makes sense now.... but I just don't see it, no way in any zero sum game you can have 4% making living out of it.

the CFD data seems to be just a slice view... 80% losing, but during how long a period... per month? that's quite a gap from the question of 'making a living' which requires year round sustainability..

Agreed. Too many unknown parameters. Too many "authorities" spewing numbers.
I seldom post to threads in this vein of topic... I usually have a few good chuckles tho.