Retail.... 90% lose?

[TradeBlazer]

We hear this stat thrown around a lot. I have even heard that 90% of traders lose 90% of their capital within 90 days. That's a cute adage but doesn't really hold water.

I think the idea originated in the 70s or maybe the 60s. But I wonder if retail trading failing this badly is still true today? I think it is doing a lot better and is lasting longer in the markets, and many are making money. Many things have changed.

The internet ushered in all types of new resources for traders, from innovative platforms, to subscribing to trading groups, training resources, ongoing education, communication with other traders, live trading rooms, automated alerts, innovative tools such as indicators, charts, and tools, etc. My point is there is a plethora of resources and opportunities out there to keep retail traders in the game for much longer insomuch that 90% are not losing it all within 90 days. If there were true then there wouldn't be a Retail industry at all as all those who wanted to try the markets would have done so and been washed out already.

Sure I agree that we get in our own way from emotional responses to trading which knocks us out of the game on occasion. But with all the tools, education, communication, and resources that are available today we are staying in the game for longer.

 

[maxinger]

We hear this stat thrown around a lot. I have even heard that 90% of traders lose 90% of their capital within 90 days. That's a cute adage but doesn't really hold water.

I think the idea originated in the 70s or maybe the 60s. But I wonder if retail trading failing this badly is still true today? I think it is doing a lot better and is lasting longer in the markets, and many are making money. Many things have changed.

The internet ushered in all types of new resources for traders, from innovative platforms, to subscribing to trading groups, training resources, ongoing education, communication with other traders, live trading rooms, automated alerts, innovative tools such as indicators, charts, and tools, etc. My point is there is a plethora of resources and opportunities out there to keep retail traders in the game for much longer insomuch that 90% are not losing it all within 90 days. If there were true then there wouldn't be a Retail industry at all as all those who wanted to try the markets would have done so and been washed out already.

Sure I agree that we get in our own way from emotional responses to trading which knocks us out of the game on occasion. But with all the tools, education, communication, and resources that are available today we are staying in the game for longer.

Traders learn from professional talkers/writers.
Traders add more and more and more magical / miracle indicators to their charts.
Investors do strange things like investing in NFTs and those things.
Gullible investors listen to celebrities promoting cryptos like gospel truth......

End result - 90% FAIL


You have to at least sweat blood to succeed.

 

[wxytrader]

We hear this stat thrown around a lot. I have even heard that 90% of traders lose 90% of their capital within 90 days. That's a cute adage but doesn't really hold water.

I think the idea originated in the 70s or maybe the 60s. But I wonder if retail trading failing this badly is still true today? I think it is doing a lot better and is lasting longer in the markets, and many are making money. Many things have changed.

The internet ushered in all types of new resources for traders, from innovative platforms, to subscribing to trading groups, training resources, ongoing education, communication with other traders, live trading rooms, automated alerts, innovative tools such as indicators, charts, and tools, etc. My point is there is a plethora of resources and opportunities out there to keep retail traders in the game for much longer insomuch that 90% are not losing it all within 90 days. If there were true then there wouldn't be a Retail industry at all as all those who wanted to try the markets would have done so and been washed out already.

Sure I agree that we get in our own way from emotional responses to trading which knocks us out of the game on occasion. But with all the tools, education, communication, and resources that are available today we are staying in the game for longer.

• You get retail jumping in during a hype like crypto meme stocks etc who get bored after realizing they aren't going to get rich over night...they don't usually lose too much as it was just a fun account anyway.
• Then you have retail investors who just dabble with diversification and dividends...they don't blow up their accounts.
• Then you have options traders trade different strategies that aren't usually that high risk or return.
• Then there are swing traders who are probably the most consistent and profitable of the bunch if done right. BNF was a swing trader.
• That leaves you with day traders and scalpers. They are the ones who continuously blow up their accounts. I think 90% is too generous...probably 100% of day traders lose money in the long run.

 

[ironchef]

We hear this stat thrown around a lot. I have even heard that 90% of traders lose 90% of their capital within 90 days. That's a cute adage but doesn't really hold water.

I think the idea originated in the 70s or maybe the 60s. But I wonder if retail trading failing this badly is still true today? I think it is doing a lot better and is lasting longer in the markets, and many are making money. Many things have changed.

The internet ushered in all types of new resources for traders, from innovative platforms, to subscribing to trading groups, training resources, ongoing education, communication with other traders, live trading rooms, automated alerts, innovative tools such as indicators, charts, and tools, etc. My point is there is a plethora of resources and opportunities out there to keep retail traders in the game for much longer insomuch that 90% are not losing it all within 90 days. If there were true then there wouldn't be a Retail industry at all as all those who wanted to try the markets would have done so and been washed out already.

Sure I agree that we get in our own way from emotional responses to trading which knocks us out of the game on occasion. But with all the tools, education, communication, and resources that are available today we are staying in the game for longer.

You are right, retails... 90% lose? is not correct.

I am with @wxytrader, especially us day traders.

Today, it is more like 99% if you consider survival bias. Many of the one and done are not even been counted.

 

[d08]

Nothing has changed. A professional in the industry who is performing well can tell you a few things over drinks that a random retail trader won't learn in a decade. Nearly all these training resources are worthless, sold by failures to soon-to-be-failures. It's more equal nowadays than before, you can access and process data for free that was completely unobtainable decades ago for the retail dudes. But how many actually do this? Most look at Instagram and Youtube videos, there's not value there.

 

[Snuskpelle]

The 90% figure is a bit of a simplification I guess.

There's a difference between unbiased DT of stocks where transaction costs vs noobs attempting to trade based on a cool sounding indicator/system/... should lead to almost only failures, DT/swinging exclusively long stocks in a bull market where as long as you hold enough to overcome transaction overhead you can be accidentally successful, the amount of leverage with the former (hello Kelly), gambling on far OTM and/or short dated options, etc.

People that develop an edge other than long stock bias should be comparatively uncommon though. That for a myriad reasons but I think the most succinct one is that you compete against the best in the world (who hold the majority of capital) but will be drowning in information from everybody that's not. Ever felt like it would be fun to play e-sports against the best players in every match? Of which some are AI bots like Alphastar etc.

 

[taowave]

LOL @ Us day traders...

Have you abandoned your option brothers?

You are right, retails... 90% lose? is not correct.

I am with @wxytrader, especially us day traders.

Today, it is more like 99% if you consider survival bias. Many of the one and done are not even been counted.

 

[TheMordy]

I think the idea originated in the 70s or maybe the 60s. But I wonder if retail trading failing this badly is still true today?

I assume it has never been more true then in 2024.

In the 60s-90s, only serious people with a lot of patient and passion went into active trading,

now it's 16 year olds with a robin hood & youtube account on the phone while smoking grass...

It's definitely 99% correct, withing serious traders I would assume more like 80%

my2cents

 

[ironchef]

You are right, retails... 90% lose? is not correct.

I am with @wxytrader, especially us day traders.

Today, it is more like 99% if you consider survival bias. Many of the one and done are not even been counted.

And by the way, I count myself among the 99%.

 

[ironchef]

LOL @ Us day traders...

Have you abandoned your option brothers?

No, don't you think I can have more brothers if they accept me?