Success Rate of "Educated" Newbies

[GrowleyMonster]

Okay, so we have all heard and repeated the percentage of new day traders who fail to become profitable, and this is commonly stated to be around 80% or 90%, depending on who you ask. Well, 74% of all statistics are just made up on the fly anyway, right? But anyhow, I think a majority of the sample is made up of people who honestly don't have a clue. Look how many new guys we see on this board, who have never even read, much less genuinely studied, a single decent book on trading! So, how about we narrow the focus a bit?

Anybody welcome to chime in here. What does everyone think the failure rate is, among new day traders who actually put in some hard work educating themselves? I am talking about guys who actually buy a few good books and study enough to gain a solid basic understanding of trading and the markets, and who practice enough with their chosen platform before going live, that they at least eliminate trading fumbles, accidental orders, things like that. I would guess that the failure percentage of well prepared newbies to be somewhat lower... like 50% or so. Depending on where you define failure. There are after all, plenty of not so well prepared players to feed them. Being new to the game doesn't automatically mean impending failure, IMHO. More like being new to the game and not having a clue means certain failure.

I think a lot of the commonly accepted statistics revolve around whether the new day trader, in one year, has gained or lost money. We could also look at "absolute" failure, where one has lost basically all his initial account or given up, thrown in the towel, before this could happen. Maybe for the sake of the discussion we could go with simple yes/no, has the trader, in one year, made enough profit to match inflation. Is he any better off, or worse off, for his year of trading. What say you, traders?

 

[bone]

Okay, so we have all heard and repeated the percentage of new day traders who fail to become profitable, and this is commonly stated to be around 80% or 90%, depending on who you ask. Well, 74% of all statistics are just made up on the fly anyway, right? But anyhow, I think a majority of the sample is made up of people who honestly don't have a clue. Look how many new guys we see on this board, who have never even read, much less genuinely studied, a single decent book on trading! So, how about we narrow the focus a bit?

Anybody welcome to chime in here. What does everyone think the failure rate is, among new day traders who actually put in some hard work educating themselves? I am talking about guys who actually buy a few good books and study enough to gain a solid basic understanding of trading and the markets, and who practice enough with their chosen platform before going live, that they at least eliminate trading fumbles, accidental orders, things like that. I would guess that the failure percentage of well prepared newbies to be somewhat lower... like 50% or so. Depending on where you define failure. There are after all, plenty of not so well prepared players to feed them. Being new to the game doesn't automatically mean impending failure, IMHO. More like being new to the game and not having a clue means certain failure.

I think a lot of the commonly accepted statistics revolve around whether the new day trader, in one year, has gained or lost money. We could also look at "absolute" failure, where one has lost basically all his initial account or given up, thrown in the towel, before this could happen. Maybe for the sake of the discussion we could go with simple yes/no, has the trader, in one year, made enough profit to match inflation. Is he any better off, or worse off, for his year of trading. What say you, traders?

Wow, quite a bit to unpack here and I will not WAG a success rate answer. But I have an opinion about what types of new traders are more likely to fail than others. Day trading - that is manually "scalping" highly automated electronic markets with a 'barely adequate' account capitalization surely tops the list from what I have personally seen over the years.

 

[dozu888]

Okay, so we have all heard and repeated the percentage of new day traders who fail to become profitable, and this is commonly stated to be around 80% or 90%, depending on who you ask. Well, 74% of all statistics are just made up on the fly anyway, right? But anyhow, I think a majority of the sample is made up of people who honestly don't have a clue. Look how many new guys we see on this board, who have never even read, much less genuinely studied, a single decent book on trading! So, how about we narrow the focus a bit?

Anybody welcome to chime in here. What does everyone think the failure rate is, among new day traders who actually put in some hard work educating themselves? I am talking about guys who actually buy a few good books and study enough to gain a solid basic understanding of trading and the markets, and who practice enough with their chosen platform before going live, that they at least eliminate trading fumbles, accidental orders, things like that. I would guess that the failure percentage of well prepared newbies to be somewhat lower... like 50% or so. Depending on where you define failure. There are after all, plenty of not so well prepared players to feed them. Being new to the game doesn't automatically mean impending failure, IMHO. More like being new to the game and not having a clue means certain failure.

I think a lot of the commonly accepted statistics revolve around whether the new day trader, in one year, has gained or lost money. We could also look at "absolute" failure, where one has lost basically all his initial account or given up, thrown in the towel, before this could happen. Maybe for the sake of the discussion we could go with simple yes/no, has the trader, in one year, made enough profit to match inflation. Is he any better off, or worse off, for his year of trading. What say you, traders?

The problem is most of the 95% failed crowd prolly thought they have prepared themselves lol. And ‘education’ won’t make much difference. There is simply nothing worth reading in the bookstore. Quite a shocker. But that’s the uniqueness about trading.

Check my ‘trading is easy’ thread. There is nothing like that in the book store. By the time you figure this out you would have experienced a couple of bull bear cycles. So 10 years. Roughly speaking.

 

[vincentnyc]

success rate of educated newbies are 0%. the problem is u can read and learn all u want from a book, youtube etc. the most important thing you will need is the experience. experience > education.

 

[LS1Z28]

Having a strong work ethic and a willingness to educate yourself will place you ahead of the curve in just about any endeavor. I bet that the overwhelming majority of day traders still fail initially though.

 

[Handle123]

I believe the stats comes from brokerages, they have questions on your years of experience, net worth, etc I don't remember where I read it, but electronics have made percentages worse for new traders, easier to over trade and anger trading, and 2% succeed.

Say you have normal intelligence and first year of college, and someone throws you advanced logics textbook-get to reading, now in 4 years you might be at expert level and handle well logics, but you are a newbie and everyone who are profitable have become good at what they do. You have incredible odds against you of knowing the lingo of what to expect which most books do not tell you when to pass up normally good signals. You have to experience "oh shit, how did that happen" what should I do, you come to this arena thinking profits when most are thinking risk management, it is the real boring areas that is most important and about only area we can somewhat control, and yet newbies want entry signals.

 

[Specterx]

2% sounds about right. Most lack the mental equipment to succeed; most others don't have the passive income or savings to survive the learning curve, nor the capital to make decent coin even if/when they do learn how to trade. And even after passing those hurdles, there will be many who just never "get it".