Why do 5% of Traders Win?

Quote from deaddog:

In reality that plan is a little too simple but a well thought out plan, with entry and exit criteria, risk control and money management strategies, is what separates the 5% from the 95%.

Oldtime makes light of it but I would guess that 95% of the 5% have a trading plan that they consistently follow.
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I wasn't making light of it, sorry if it sounded that way, was just trying to organize replies into rules

so rule 1 was get flat and wait
and your rule 2 was have a plan
 
Quote from Zr1Trader:

I have traded methods where I wait for setups all day and I have traded "always in" strategies.

How many of the 95% trade "always in" reversing trades sequentially through the whole RTH session in a market like natty gas or oil grabbing volatility? I would guess not many.

How many of the 95% are sitting there "waiting for their setup"?
I would say the majority.

Both can work , With either way , a proven tried, true, and tested methodology with discipline must be present which basically eliminates any of the 95% off the bat.

Vig is a big invisible hand also that 95 percenters don't see. They'll jump in and out 10 times in a 5 tick range using market orders and wonder where their money went. If there is only 10 swings of 70 cents on avg during the day in oil for example, then one shouldn't be trading any more than 10-12 RTS while Trying to capture the meat of each move.
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to each his own, but my style sees it the same way you do. I am almost always in. I figure whatever I have on is probably as good as whatever new position I am going to put on, plus I save one spread and commission. Also agree on frequency of trades. I don't even have to look at the bottom line, I can just look at my trade log. If there are more trades than ususal I know it is probably a losing day.

But that's just my style, not saying it's the only style or would work for everybody.
 
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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More seriously, winners such as me are better than the 95% since we are in tune with the markets.

If you can get your trades to make money 80% of the time and make 3x more on each trade than you loose on loossing trades, you will be a winner.

Loosers take too much risk. I never lose more than 5% of my account on a loossing trade. It's called a stop loss.

Winners have stop losses.
 
Quote from pauk:

they're probably not looking at charts or indicators or anything that us retail crowd are even aware of.
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That's the answer...but they are looking at PRICE it's the ONLY thing that matters


They study price and determine probabilities of certain events occurring and many of these events have high probabilities. They place a trade and manage risk.

In this game Price is the final arbiter.
 
I think buying into the sales pitch "Pick winning stocks with my "Method" when the reality is on to manage your money on dealing with losers (first) and winners (second).
 
Quote from americanhero:

More seriously, winners such as me are better than the 95% since we are in tune with the markets.

If you can get your trades to make money 80% of the time and make 3x more on each trade than you loose on loossing trades, you will be a winner.

Loosers take too much risk. I never lose more than 5% of my account on a loossing trade. It's called a stop loss.

Winners have stop losses.
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Sometimes, people pretend to be someone they are not, just to have easy ego gratification.
 
Quote from nutmeg:

I think buying into the sales pitch "Pick winning stocks with my "Method" when the reality is on to manage your money on dealing with losers (first) and winners (second).
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I agree. You have to have an extremely high win percentage if your losing trades are bigger than your winning trades.
 
Quote from nutmeg:

I think buying into the sales pitch "Pick winning stocks with my "Method" when the reality is on to manage your money on dealing with losers (first) and winners (second).
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I used to follow a 'Guru' who did just that, until a few years ago he missed the biggest move in a stock that MET HIS METHOD and I was convinced he knew no more than I. I had developed my own method for finding his setups and I knew exactly what he would be looking at.

His intra-day method was so solid, I thought if I adjusted it, it would be even better.

After I developed my own platform I tested his method with many different types of exits on many different stocks and I was amazed at how it actually worked over a long period of time. Here he is looking for setups when he could have actually traded the same way every single day and made money...now, that's ironic.

There are no GURU's, PRICE is KING!

The POWER of a computer is incredible...now, I know more than the guru.
 
Quote from trhudson:

I used to follow a 'Guru' who did just that, until a few years ago he missed the biggest move in a stock that MET HIS METHOD and I was convinced he knew no more than I. I had developed my own method for finding his setups and I knew exactly what he would be looking at.
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I'll add to that. I started out following IBD (not being critical) but they completely missed a few boats or should I say rockets. This annoyed me to no end. One stock made their top 100 (I think it came in at 65) after the stock had completely made it's run of about 2 years.
 
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