The 98% Who Fail

Quote from Swan Noir:

Whether it is 98 or 99.5% who fail is irrelevant. The purpose here is to show that while the odds of becoming a consistently profitable trader are long they are not as bad as they might appear to the casual observer.

1) Half (or more) of those that wash out start (and end) with some FOREX bucket shop. By not being among that half your 2% chance of making it jumps to 4%. Not bad considering all you had to do to double your chances was decide not to be an asshole.

2) Of the remaining half at least half of those have never had a real success in their lives nor are they likely to knock it out of the park ever. If you are not among this group you double your chances again. You go from 4% to 8%.

3) Of the remaining 25% at least half are inept at building relationships of any kind. Many came from dysfunctional families and instead of getting a grip and overcoming that disability they embraced it and it means there are self centered, needy etc. When they finally get into a conversation here or in a chat or wherever with real traders they ask inane questions showing they doubt anyone is telling the truth, let their fear and discouragement color everything they say and end up with zero relationships. When they finally have a question to ask that counts they have no one to turn to. They resent that they get no help and come off like they are entitled to our time and attention. Bingo ... do not be one of them, double your chances and now your at 16%.

4) Of the troops that are left some simply do not have talent for this, others do not study as hard as they should and yet others simply let life distract them. I will not try to put a number on these failings but we know it is a fair number of those that try anything difficult.

I am still a struggling trader yet at the point where I learn more in a week than I did in a month. My guess is before the end of this year I will be consistent enough to take a big breath and relax. Even then I will not have begun to yet make real money but my risk of ruin will continue to drop considerably. And, since the key is to get good enough to survive for the years it takes to become a seasoned pro, that is an important milestone. Real traders make serious money taking on reasonable levels of risk. That is the goal.

My purpose here is not to portray trading as easy. I suspect for most the odds do not get much better than 1 in 5. Far from a lock yet not an out bet. Do not listen to those who say it cannot be done yet understand it will take everything you have to get it done.

And remember, not being an asshole sure helps. But, as we all know, that is not quite as easy as it sounds.
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Swan, good post, its funny you mention not being an -------- and EMG shows up hehehe. I think another factor with Spot Currency is new traders try to trade every pair their broker offers, that in itself guarantees failure.

Here is another one, trying to trade futures as a first instrument, not a good idea. If more would trade one thing, like QQQQs, their start might be better. Here are some more trader killers, no revenue stream and trying to make a living trading right out of the box, just like any small business you need money to live off of till you are profitable, 3-4 years minimum. Over leveraging, hoping to make 200k a year on a 10k account. Sorry caint be done Son.

Anyway just some random thoughts, oh by the way, emg don't flame me I was just kiddin, actually if more would listen to you maybe they would reassess what their plans are as far as trading is concerned.

The Always Prepared For The Worst VIPER
 
Quote from al trader:

everybody will lose. end of story
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in what? in trading? how so? let's say one did make 500K out of 100K in one year. pocket 400K and bought the house for cash. the only way he can lose is on the price of the house. unless he crazy enough to get the refinance and put those money back in the market. but if he that crazy-he shouldn't trading the first place. it is a must for successful trader to take some money off the table all the time.
 
Quote from gnode:

Keep in mind many people fool themselves by remembering their wins with more enthusiasm than their losses.

As far as defaulting, we won't.

Read the 14th amendment of the constitution. It basically states that the US will pay on its debt no matter what.

The people who will lose are federal employees who go on furlough, social security beneficiaries, medicare doctors, and possibly soldiers.


That said, who is retarded enough to buy 10 year notes at 3% other than people who are absolutely required to do SOMETHING with their money?
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Since I have far more losses, scratched with the flick of the wrist, than "wins:, why...........it's easier to remember the wins. Nevertheless, I maintain a copius losses journal for when truly wacked, generally a result of gaps. Paid for those lessons, not going to discard them.

As for the 14th Amendment to the US Constitution, "no matter what" is kinda of eh, strong platitude. Try as I may, I can't envision anybody on the floor using that phrase.

For YOUR viewing pleasure, I've attached a synopsis from Section 4, circa 1868 when the drunkard Grant was "our" fearless leader. I guess you're entitled to your interpretation. Emancipation is a tad (not to be confused with Lincoln's son) out-dated.

Shit load of retarded bankers buy demand deposits for zip and/or time deposits a hair above zero, and put them is risk-free 10 year T-notes. They'd continue to do so IF they yield subsided to 2.5% or 2.25%, or 1.75%. Still a historically steep yield curve. No credit risk, no bank examiner compliance.

With the left hand buying from the right hand (the one with the printing press) can their be an internal default?

Technical default hinges upon Standard & Poor and/or Moody's ratings in the eyes of the Chinese, rather than gubment intent. Raisin (not to be confused with dried grapes) the debt ceiling is a foregone conclusion with (74) precedents.
 

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Quote from bwolinsky:



Whatever the case is, I do not believe 98% is correct. In fact, I would say if 98% really did not make money, there would be no market.

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Time will tell when u are tired of funding your failure account every 2 months in order to get your loss back.
 
Quote from bone:

98% of the people who start a small business fail. 98% of the people who start a restaurant fail. 98% of the college sophomores who declare pre-med ultimately never graduate medical school. 98% of the people who declare themselves as a candidate for US President fail.

So what ? Name one worthwhile endeavor where there is a high initial success rate. Trading is not easy. Many take several bites off the apple. But if you are good enough to make a consistent living at it, there can be no logical denial that it is better than just about any other enterprise most people could think of.

Populating this board with this silly refrain is exactly akin to a doctor reciting the same hollow mantra on a medical blog: "98% of pre-med students never graduate medical school"... so what ?
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on the other hand trading is very unique business. it is impossible to compare it with something else. where one can loose couple K's in 5-10 minutes and be happy about it? yes,happy, because if he didn't close this position, the loss will be let's say 10K.
in what business one can make couple K's in 5-10 min and will be angry, mad after that? because if he did nothing till let's say EOD, he would made 10K :p

i have to admit that from my experience it's actually very frustrating and self destructing hobby\business. specially day trading. specially for perfectionist's. prepare yourself for following: no matter of what you do, or make, you will be unhappy with your decisions most of the time. :)
 
I didn't click on the link but based on my experience, the 95%, 98%, whatever the number, isn't correct. I've been working in the tax field, in addition to trading, and the win rate, based on my sample is about 68%. If I had to pick one quality that's a solid predictor of success it would be previous success in a field completely unrelated to trading. It could be starting a business or rising to the level of an officer in whatever company a person works for. It shouldn't be surprising that a person who is successful in other aspects of their life are successful in trading. The traders that typically lose consistently are low level employees with 10k in their trading account but that doesn't mean that employee won't be the future CFO of their company, and a successful trader. I've schooled a lot of people in the profession and a professional history is the first thing I ask about.

Quote from emg:

http://articles.latimes.com/2011/apr/03/business/la-fi-amateur-currency-trading-20110403

According to this article, 98% of traders lose annual. Of the 615K accounts, 605K accounts lose


More than 90% of small traders lose. They just lose!!
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Read Taleb (though he was not the first, who said it).

Any scalable profession has extremely high failure rate, not just trading.
 
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