Why are there so many losers?

[illiquid]

Quote from DHOHHI:

The washout rate in small business startups is like 95% in the first couple years.

I agree with your sentiment, but even comparing trading to running a typical business doesn't seem to do the market justice. I know a number of determined, hard-working entrepeneurs who've built multiple businesses from scratch who, after years and years in the market, still think of it essentially as some casino or easy road to quick riches. I mean, you'd think that being a successful businessman would be evidence of one having the acumen for what it takes to make money over the long run, but when it comes to the market sometimes all that business savvy and common sense just goes out the window. One guy who's been trading on and off for the past 10 years was last year still buying internet stocks right before earnings reports as his "method"; he guessed right the first few times (I think he only went long actually), then just recently blew up his account on a weak ebay number.

Somehow, when it comes to the market, common sense about what it takes to be consistently profitable seems not very common at all. I'll be the first to admit spending many years under a delusion about what an edge consisted of. Looking back, I wish there were someone who'd just tell me, plain and simple, to stop what I was doing because it just flat out didn't make sense, that I didn't deserve to make or keep anything with the piece of crap "system" I called my edge, and that I needed to work and think far deeper than that to even have a chance of surviving. It would have saved me alot of time, effort, and dollars -- but I suppose the bottom line is you need to be convinced of things yourself for it to really sink in.

 

[risktaker]

So, what do you suppose your buddy is doing that you're not? Does he share stuff with you?

Quote from Steve Tvardek:

I still consider myself somewhat of a market loser because I can only seem to pull in 9-10k a month the way I currently trade. Yes, that may sound like a good living and by most accounts it is, but knowing how much money there is to made each and everyday and knowing that some are really hammering it out consistently, really puts things into perspective. My buddy, who is a few months older (26) averages between 25k- 50k a month and just seeing that makes me realize that if I want to be a true winner, I have to become a much better trader. Fortunately, there is always room for improvement in this business.

 

[nononsense]

Quote from risktaker:

So, what do you suppose your buddy is doing that you're not? Does he share stuff with you?

Of course he won't: "sharing stuff" is only popular among losers.

 

[Steve Tvardek]

We talk all the time and I know why it is that he can make what he does. He has a much greater tolerance for risk than I do right now and he will really size in in the right situations. I may have 1000 shares and catch 40 cents and be somewhat happy, but he wont be happy unless he catches the same move with 6000 shares. He does take big hits here and there when he is wrong, but net/net he makes a ton more than me. And that really is what counts in the end. I know, that me and me alone, is what needs to be worked on. We see the same trade and believe the same results will occur but I cant bring myself to sizing up enough yet to take full advantage. For him, its no big deal.
So while he is very open about how he trades and why he does certain things, actually aligning myself with his belief system is very very difficult. I guess the only way to get to that next level is to force myself to do things that feel uncomfortable for a greater good.

Quote from risktaker:

So, what do you suppose your buddy is doing that you're not? Does he share stuff with you?

 

[dpt]

Quote from John Merchant:

"The Lord made a loser so a winner could win.
That's the spot he put in.
Yes losin', it's an easy game"

- Ian and Sylvia

John Merchant ... Ian and Sylvia were great. Thanks for reminding me. Now I've got some nostalgic listening for the weekend

G G Am: Four strong winds that blow lonely,
D7 G: Seven seas that run high
C Am D7: All those things that don't change, Come what may.
G Am: But our good times are all gone
D7 G: And I'm bound for moving on
C Am D7: I'll look for you if you're ever back this way.

Think I'll go out to Alberta,
Weather's good there in the fall.
Got some friends that I can go to working for,
Still I wish you'd change your mind
If I asked you one more time,
But we've been through that a hundred times or more.

Chorus.

If I get there before the snow flies,
And if things are looking good,
You could meet me if I sent you down the fare.
But by then it would be winter,
Not too much for you to do
And the winds sure can blow cold way out there.

Chorus.

 

[Lamont_C]

Quote from nononsense:

Of course he won't: "sharing stuff" is only popular among losers.

"Sharing stuff" is common, esp the advice that Steve received. Been shared for years. But losers don't listen . . .

 

[cashonly]

In my experience of working with hundreds of traders, one answer is that traders don't take their trading seriously enough. They take a class and then start trading without really taking the time to learn their craft.

What would the world be like if all professions did that:
Brain Surgeons?
Lawyers?
Engineers?
Airline Pilots?
Stand-up comics?
Chefs?

You get the idea. It doesn't matter what the profession. If you don't take the time to study and learn and practice in your profession, you'll fail. All of the above put in a long time in either school, apprenticing, or on-the-job-training, but they put the time in. You rarely here them saying, "Hey! I took a course! Why can't I:
"dissect a brain without someone dying?"
"win a case?"
"build a bridge that doesn't fall down?"
"land a plane without crashing?"
"make people laugh?"
"make everything I cook taste good?"

 

[electron]

Quote from T/A_Bo:


Personally, I trade rather infrequently when compared to the rest of the active trading world. When I did a real time trading forum, I would get grief all the time for not giving enough traders...being "lazy". Quite the opposite, I am finding and passing on 9 out the 10 valid entry points I see. In daytrading the E-Minis, I want to find the one spot in each session that has the potential to deliver a big move, and will pass on the myriad opportunities to grab a point or two.

Very good piece of advice. The key in this business is being selective. Most are not and that's one of the main reasons why they lose...

 

[m22au]

I agree with Daniel C. The main factor influencing the dollar amount of trading profits is the size of one's account / buying power. However many people ignore this and instead focus more on trading ability, risk management etc.

Some traders set out to trade fulltime (only source of income) with a required rate of return of 20% plus (a function of buying power and desired income). They would make things much easier on themselves if they just saved up more so they could start with more buying power.

Quote from danielc1:

Strange, I disagree with everything that has been written on this thread. I believe 100% of the people make it, if they do three things:
1) Have enough money.
2) Start very small.
3) Do not give up.

I have trained some people and the only reason why some make it and why a lot don't is 'staying' power.
Everybody can make it in this business but what will you do if it takes ten year before you make it? (I'm not saying it takes ten year but for some will) What will you do if your losing streak is so big and long that you will need additional capital? Most people just give up... and look for something else they can do. What is fine. Only the people with the hart for the 'trading' business will survive this 'challenge' that every wannabe has to go through.

 

[m22au]

What's the difference between 'trading capital' and 'trading equity' ?

If the original poster makes $1,200 a year on a $5,000 account, then that is a 24% return, and as another poster suggested, much better than the average fund manager. (Although the techniques used in a $5k account may not be scaleable).

Quote from Nana Trader:

24% a year? i hope you never become a fund manager.
Fund managers make 24% of the trading capital, not on
the trading equity.

If he makes $1200 in a year, that's around 2.5% return
, better put money in bank CD than to trade.