What % of traders really make money?

I dont believe the publishing of a certain strategy will destroy the usefulness of said strategy.

Here is an example. www.pinoytrader.blogspot.com. He publishes everything that happens before it happens. His trading has not been hurt in any aspect.

Here are my reasons:

1.) Most people will not believe in the strategy once published. i.e. Although Bollinger Bands and the MACD histogram is well known, most people dont believe in them although I can show many examples where they did indeed work.

2) The market is so dynamic, large and diverse that no one will pay attention for long or care.

3) I can show you how to play the guitar and spend hours of my time with you yet you might not be able to replicate my results.
 
B-Lord,
For me, sharing info about my success &/or trading methods comes down to risk/reward or cost/benefit (just as in evaluating most opportunities). If there is no reward to posting this info (even on a karmic basis) and there is some risk, why do it?

I'll periodically offer some thoughts via PM (or post) to folks who look they 1) might be able to use it & 2) may actually be willing to hear it (although history shows that I'm frequently wrong with my assessment of the 2nd one).
Quote from baggerlord:

So come on, tell me a success story to encourage me to keep my interest in trading.
More...
While this is obviously a reasonable request, if you really need a success story to keep your interest in trading - then you probably shouldn't bother. Most of the successful traders of which I'm aware are highly motivated and would be unlikely to need a success story to push them. They also tend to handle defeat well, use it as a learning experience and keep moving forward. Like most endeavors - if you want it bad enough, you will find a way to become successful. The benefits to trading are real. Yes, there are a number of successful traders. However, becoming consistently successful over time is much more difficult than it appears.

Lots of good advice in previous posts and elsewhere on ET. If you haven't read them yet, get the 3 Wizard books from Schwager.

R
 
HEY BAGGER. its not the percentage, but how many traders are consisently profitable, that have developed the skill set through hard work & understanding market dynamics & know their limits in sticking to a game plan of trading as a real business. for anyone that trades fulltime for a living, as a only income are not going to be posting on here & saying trading is easy & brag about how much money they make, its challenging & rewarding for those that give it 150 % to be a consistent earner. its a tough endeavor & only the most devoted stay in the game for the long term because they love what they do & its in their blood, and they constantly push them selves to be better and the financial rewards follow the hard work.
 
What % of Traders are profitable?

The answer depends on certain assumptions about (1) Who is a trader? (2) how long a time frame you are looking at, and (3) how much profit is profitable.

I shall assume the following:

Who is a trader?

Anybody that closes a position in his own account that he initiated within the last one year. No account is taken of how frequently he trades, whether this is his primary occupation, etc. Profitability will be determined only on short-term positions (taken and closed within a year)

How long a time frame are you looking at for profitability?

I will break down the response by time frames of one-day, 1-month, 1 year, and 5 years

How much profit is profitable?

I assume you do not care, as long as the results less of commissions over the time period is positive. This is probably not a good assumption but you need to be more precise to get a precise answer. Someone may make 50% on $10K in a year. But that is still not sufficient to make a living, even though performance is better than market: would you count that a profitable trader?


Based on the assumptions above and my experience with various people, I have the following figures as average over the last years

Code: 
Time Frame		Average % Profitable Traders		Comment
1-day				40%				1-day time frame is obviously more like a toss of the coin.
1-month				35%				
1-year				30%				Remember the market has been up the last 5 years. Some folks have made money just by being in 
								the market.
5-years				25%				Again the market has been up. Its only the frequent traders that have the high losing % some 
								folks are thinking of.


The figures above are about the best I have without refining your questions to be more specific and perhaps hiring a consultant to do the research.
 
If you *really* want a well researched answer, there have been papers written on the topic. Odean is a trailhead.

Surprisingly, there are quite a few independant traders who do make money. It's a minority of course.

There are even a few independant traders who make a great deal of money - but after a while, it makes sense to hire people. So very few truly successful traders operate solo.
 
Quote from RL8093:

B-Lord,
For me, sharing info about my success &/or trading methods comes down to risk/reward or cost/benefit (just as in evaluating most opportunities). If there is no reward to posting this info (even on a karmic basis) and there is some risk, why do it?

I'll periodically offer some thoughts via PM (or post) to folks who look they 1) might be able to use it & 2) may actually be willing to hear it (although history shows that I'm frequently wrong with my assessment of the 2nd one).
While this is obviously a reasonable request, if you really need a success story to keep your interest in trading - then you probably shouldn't bother. Most of the successful traders of which I'm aware are highly motivated and would be unlikely to need a success story to push them. They also tend to handle defeat well, use it as a learning experience and keep moving forward. Like most endeavors - if you want it bad enough, you will find a way to become successful. The benefits to trading are real. Yes, there are a number of successful traders. However, becoming consistently successful over time is much more difficult than it appears.

Lots of good advice in previous posts and elsewhere on ET. If you haven't read them yet, get the 3 Wizard books from Schwager.

R
More...


Great post, exactly how I feel about posting results/success. Tempted at times to shut the masses up who claim it can't be done. But there is no upside for me.
 
You must log in or register to reply here.
Back
Top