* the reason why traders fail*

[BlueOcean]

If you don't have an edge, you're basically 50/50, so even though you'll have volatility in the long run you won't be losing anything.

If you take an average price stock with decent volume, and make one round trip per day, with slippage and reasonable commissions (and yes there is slippage with non marketable lmt orders, cost of not getting filled) you are looking at about 0.06%

250 trading days in a year that is 15%.

If you do 2 round trips per day, that is 30% you have to overcome.

 

[total_keops]

The reason why this is not a zeros sum game.
You forgot to mention that on top of that you have to pay the internet, computers and in the end taxes.

 

[Petsamo]

There is already a thread on this subject - Why most traders are losers.

 

[illiquid]

Quote from BlueOcean:

If you don't have an edge, you're basically 50/50, so even though you'll have volatility in the long run you won't be losing anything.

Belief in this statement as a starting point is the real reason why traders fail.

 

[IanMacQuaide]

Quote from illiquid:

Belief in this statement as a starting point is the real reason why traders fail.

Exactly.

 

[CollegeTrader]

This is my thought process. Traders fail because we over trade. I have read the most popular trading books (Pit Bull, Market Wizards, parts of John Carters book, etc..) and the key thing i noticed about these traders is they pick key levels in the market to trade. So basically they arent trading until these levels are reached. This is discipline in my opinion. Not trading every wigle in the market. Making 10 pts in the YM daily is easy but we arent satisfied with $50 dollars. However the real profits are made practicing the same process but trading more contracts. Im a relatively new trader but i absorb a lot of data and this is how im trading. In the beginning you sure wont make a lot of money but the key to trading is the process. And by learning correctly you give yourself an opportunity to become a larger trader and make this a career. just my thoughts of course everyone has there own opininons.

 

[slapshot]

Quote from BlueOcean:

If you don't have an edge, you're basically 50/50, so even though you'll have volatility in the long run you won't be losing anything.

If you take an average price stock with decent volume, and make one round trip per day, with slippage and reasonable commissions (and yes there is slippage with non marketable lmt orders, cost of not getting filled) you are looking at about 0.06%

250 trading days in a year that is 15%.

If you do 2 round trips per day, that is 30% you have to overcome.

This is one of the dumbest things I have ever seen on ET - there are about a gazillion variables that invalidate it.

 

[bighog]

Even the most profitable business venture has overhead.

There ain't no free lunch baby.

 

[NetTecture]

Exactly. Ignoring the cost of the trader working in trading (except at McDonalds) there is computers, software, data feed etc.

That being said, most traders fail like most businesses fail and like most people never make first place in anything. It is called "competition". Just trading is worse...


...you are a looser in soccer? Well, play in a looser league for fun.
...you are a looser in cooking? You never make chef, cook at home.

You are a looser in trading? Well, you pay for playing the game To the pros.