Tell me about the 95% that fail

Quote from peilthetraveler:

1 major reason is that they are undercapitalized. Most traders start with a $25k account and maybe a few months living expenses. Now even if you are profitable right off the bat and can generate a 100% return per year, thats only $25k or about $2k per month and you know its not going to be consistant. If you have a month where you only made $1k, how do you pay your bills? You take from your capital and now your 25k account is $24k which is almost $100 per month less than what you made before. A few months like that and you eat your capital and ultimately fail. Thats what happens if you are a GOOD trader and dont lose money!

Most traders, you will find, do not do that much better than market returns. Sometimes 20%-100% per year seems to be the norm with the occasional great year of something like 400% or higher. Some make incredible returns year after year, but you cant expect to be like them.

No new trader wants to hear this, but if you want to be a trader, you need someone supporting you financially, or you need a job until you build your account over at least a minimum of $100k (preferably $250k) otherwise your account will never grow if you are living off it.

But every new trader wants to believe they are going to drop $25k in an account and have a million dollars by the end of the year because they hear 1 story out of 10,000 that someone else did it.

Talking to other traders and I have found that most seem to lose about as much money as a college education would cost ($25k-$100k) before they start making money.
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So true.....great post!
 
Quote from sneakoner:

Were they trying to get rich quick and just jumped in too early?

Did they just blow out their accounts and decided not to keep going?

Did they put in thousands of hours of screen time and yet still fail?

Did they backtest their strategies and still failed?

If you're now consistently profitable but you blew out one of your accounts before, then does that place you in the 95% group or the 5% group?

I'd really like to know how much effort those that failed put in before they finally gave up. Can anybody shed some light?
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If the 95% statistic is reliable, obviously people lose for different reasons.

Most of the losers blow their account because they don`t know shit about the markets and could not tell the difference between the bid and the ask even if their life depended on it. They believe trading is easy and freely give away their money. Some faster than others. The losers pay the winners.

Now, many probably give up after losing their money, but there are also some persistent and stubborn neophytes who take it as a learning experience and decide to learn how the markets and trading really works. After thousands of hours and years of their life spent pursuing the goal of becoming a consistent and successful trader, some of them eventually make it, but you can be sure that there are people who keep losing for the rest of their lives as well.

I believe a trading is a skill that can be learned, provided that you are a certain kind of person. Most people don`t have what it takes to be a trader regardless of their efforts. That is the truth.

What I felt accelerated my learning infinitely more than simulator trading was to manually back test charts and learn price action that way. Get years of data and start at the beginning. Bar by bar. Just observe and look for patterns that repeat themselves. Horizontal S/R, trend lines, chart patterns, etc. Develop a method. Start trading/backtesting it. Forget the simulator for now.
 
I understand that you want to know how much time you should expect before you start to see results, but the truth is that no one can tell you because it is a different process for everyone and like I said not everyone makes it in the end regardless of their efforts.

That`s the tough thing about trading. When you study any other subject in school, you are graded and get feedback that way. You get papers that tell you that you achieved a certain degree of competence. And even if you don`t finish at the top of your class, you will still have good chances to get a job.

In trading you get shit. You are only being paid if your performance is world class. Day after day.

The 10 000 hour rule have been mentioned and while it may be a good estimate, I just don`t blindly accept it. Some have natural abilities that make them learn faster and excel in trading. It also matters how you spend those hours of study.
 
Quote from sneakoner:

is that I'm spending my time doing the wrong thing.
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searching for the daytrading grail?granted - it is!

God forbid!Don`t look at Jack''cryola-bullshiter-out-of-fucking-mind''Hershey either.
 
Quote from sneakoner:

That's my biggest fear...is that I'm spending my time doing the wrong thing.
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Unfortunately, part of the process is to waste time on useless stuff in order to find out what works for you and fit your personality.

I would say that the first step is to get a good overview of the different markets, products, and different trading styles. After learning that, you need to decide what seems the best fit for your personality. Then take it from there. Read the relevant books, ask the relevant traders with similar styles, backtest, study more, etc.
 
Quote from Lucias:

I like that! Of course, a serious trader will not trade a million dollar account the same way he would a 10k account. There is no need to take those kind of risks.
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Really? Why not? Are you saying i'm not a serious trader? :mad:

Even if one isn't day trading they are spending a lot of effort in studying the market, placing trades, etc that could be spent toward other activities such as gaining education or putting in extra work at the job to get a possible raise.
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So..they shouldn't be trading in any form at all then?

10k compounded at 100% grows to 320k in 5 years. This is remarkable. However... we know 100% compounded net return is a very steep return to fulfill and anyone who achieves that is likely to gave up many educational, promotional, and other opportunities. And just dropping it to 50% which is still remarkable makes for only 75k.
75k over 5 years ends up being only making 15k per year!
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And yet the great fortunes are made from compounding. What's Soros's or Buffett's annual rate of return for the past 40 years? Again, people aren't thinking long term.


It is clear why most people in this field are selling trinkets and I don't care what anyone says. They sell trinkets because they can't cut it. And, there are brokers and educational firms out there selling themselves as proprietary firms. The whole "industry" is a joke.
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Yet you stated that you have website with "products" (trinkets?) for sale!:D
 
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