Why do 5% of Traders Win?

Fist you bust on my ass – then ask me for the keys to the kingdom



Trading does not involve thinking – it is all about observing, adapting, then reacting

The thinking IS the emotional part CF is referring to

All thinking, while trading, has done for me – is lose me money

Quote from trhudson:

I don't know the answer to this, but I am a skeptic.

I don't think 'thinking' is necessary and my math tells me it isn't. When one thinks, he is implying a belief and that's not helpful...
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Yes I do…, and I also trade the trend

Do you trade the breakout / pullback / or a reversal.
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Exactly where the trade fails - for each trade

Quote from trhudson:

And more importantly, where's the EXIT?
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My response sounds like a BS answer to you - I imagine…. But to some of us – this is the answer…

eta.. Do you think about riding a bike... or do you just ride it (not thinking of the balancing effort it takes)

RN
 
I was not busting on you and I wasn't asking for anything...I was implying that you must create the rule and trade it, without emotion.

I have plenty of algorithms that will exit or take a profit target and re-enter a position if necessary, I can get the answers from the program as I trust it more than anyone's opinion.

The market obviously does not do the same thing everyday, but it does similar things everyday.
 
Quote from oldtime:

everybody seems to be an expert on why 95% of trader lose. Just wondering if there are any experts out there on why 5% of traders win.
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Law of nature. Just like why the sun rises from the east.

I think this applies to trading books. 95% of them are shit.

Btw, what words rhyme with shit?

I was trying bust a rhyme with the word shit the other day but was I stumped.
 
Quote from SteveNYC:

Law of nature. Just like why the sun rises from the east.

I think this applies to trading books. 95% of them are shit.

Btw, what words rhyme with shit?

I was trying bust a rhyme with the word shit the other day but was I stumped.
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http://www.rhymes.net/rhyme/SHIT

Now just don't sit there bust a move :p

RN
 
Quote from ssrrkk:

Somehow I don't believe that's the whole story. There are a lot of talented programmers in the world. If it's a matter of automation, then a lot of those programmers will be rich. Among automated traders, perhaps still only 5% win.
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Because it's not about automation in the form of computer algo. I was speaking about the art of reading price and volume aka technical analysis, maybe with some fundamental factor added to the picture (especially for longer-term trading).

It's about self-automation, similar to military training, professional sports trading, professional musician training et cetera.
 
Quote from ssrrkk:

Okay here is the explanation: some one said trading is technically simple, but emotionally hard. If it's technically simple, that means one should be able to automate it. If you automate it, then you have taken the emotion out of the decision making. Therefore, a lot (remember I didn't say "ALL") of programmers should be able to implement the "technically simple" rules (not my words). But obviously, this NOT THE CASE -- which is my point. I am saying it's NOT THE CASE that automated traders are all profitable. Again, which is my point. So therefore, it can't be the case that (1) the rules are technically simple, and (2) it is all about emotions.
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No, not everything technically simple is possible to automate.

Playing poker is also very simple technically. Do robots dominate in online poker? No.
 
Quote from ssrrkk:

Okay, fair enough, I agree with you. It is technically simple for humans, hard to program. That's been my experience too, and that's why still only a small percentage of automated systems work.
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Yes, exactly. Many things are subjective enough to be quite simple technically for a human, but extremely hard if ever possible to automate.
 
Markets trend only 20 % of the time , and costs are probably 2 to 3% out of all winnings (including costs on losses).

Most traders can only catch 30 % of the 20 % trending periods, hence the <5 % rate of winners

80 % of the time , there is no edge in mixed raging markets , price can go either way.

It is no surprise only 5 % can win , these 5 % includes insider traders , fundamental traders ,technical traders ,brokers ,hft , mentors and trading educators ,signal sellers , IBS etc etc

System traders probably only get 1 decent winning day out of 5 , when they make all the profits from trends.1 out of 5 =20%.Maybe 80 % plus trend traders are losing it in the 80 % chop.

So the actual ratio of winning is much smaller, maybe only 1 % win for each type of trader.
 
Quote from oilfxpro:

Markets trend only 20 % of the time , and costs are probably 2 to 3% out of all winnings (including costs on losses).

Most traders can only catch 30 % of the 20 % trending periods, hence the <5 % rate of winners

80 % of the time , there is no edge in mixed raging markets , price can go either way.

It is no surprise only 5 % can win , these 5 % includes insider traders , fundamental traders ,technical traders ,brokers ,hft , mentors and trading educators ,signal sellers , IBS etc etc

System traders probably only get 1 decent winning day out of 5 , when they make all the profits from trends.1 out of 5 =20%.Maybe 80 % plus trend traders are losing it in the 80 % chop.

So the actual ratio of winning is much smaller, maybe only 1 % win for each type of trader.
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I disagree. Range-bound markets are very profitable too, quite often even more profitable than trending periods. The only desired condition is that range would be wide enough to justify risking something at all.

Also, there are mini-trends on intra-day time-frames, which occur several times every day and are often contained within bigger ranges.

So this range vs. trend issue is relative.
 
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