Why do 95% of retail traders lose?

[newwurldmn]

Who cares if 90% of traders lose. If people didn't take risks then there would be no greatness. Most hedgefunds started off as small traders (and then grew).

So what if 90% fail. It's no different than starting a dotcom, opening a restaurant, trying to make it in Hollywood, or inventing the next great product. The probabilities of success are low, but the rewards if you make it are fantastic.

Let dreamers be dreamers and let them try. Admire them if they succeed and applaud their willingness to take the risk if they fail.

No one succeeded in any endevor with emg's negative nelly's attitude. He can sit with his smug grin on his face laughing at the 90% who fail, but no one else will care. Those people and the rest of the world will keep trying to do bigger things.

 

[Fireplace]

EMG, are you a failed day trader? Spectacular fashion or slow bleed?

 

[WS_MJH]

Quote from newwurldmn:

Who cares if 90% of traders lose. If people didn't take risks then there would be no greatness. Most hedgefunds started off as small traders (and then grew).

So what if 90% fail. It's no different than starting a dotcom, opening a restaurant, trying to make it in Hollywood, or inventing the next great product. The probabilities of success are low, but the rewards if you make it are fantastic.

Let dreamers be dreamers and let them try. Admire them if they succeed and applaud their willingness to take the risk if they fail.

No one succeeded in any endevor with emg's negative nelly's attitude. He can sit with his smug grin on his face laughing at the 90% who fail, but no one else will care. Those people and the rest of the world will keep trying to do bigger things.

+1000 -- Great words; this is what makes America great!

 

[fanews]

the house(market maker) got ripped off.

market makers and most professional traders dont' have time to do 'research'

the market makers are all controlled by machines now. it's all technical trading.

traders and HFT machines don't care about fundamentals geopolitical news etc.

why is why insider trading is 'illegal'

Quote from Visaria:

Btw, can you also explain why a lot of these "houses" go bust?

 

[NoDoji]

Quote from emg:

They are just like any other ordinary businesses. Ask youself this:

Why circuit city went bust? Why did linen went bust? Why border book store file bankruptcy protection? Why did countrywide financial went bust? Why did washington mutual went bust? Why did blockbuster file bankruptcy?

The reason is they went bust because they didn't have a good business plan.

They had a good business plan at first, which is why they succeeded for quite some time. What they lacked is the ability to adapt to changing market environments.

Same with trading. You can have a great business plan and it can work very well, but if the market environment changes, you must adapt or your profitability will decline or fail.

The instrument I trade changed between last year and this year. The average price range moved higher and the volatility increased. I had to adapt to these changes so I could comfortably continue to trade using my preferred strategies. Because of the constant research I do every week, adapting was very easy for me.

Think ahead and be prepared.

 

[Neenisti]

Quote from WS_MJH:

+1000 -- Great words; this is what makes America great!

And why EMG will never figure it out.

 

[FutsTrader111]

95% of retail traders lose because they don't treat this as a business. No business plan, no discipline.

They wake up in their pajamas and click like a crack head. They don't realize that after losing the first 20% of their stake, they are all but done. Instead, they press bets, and blow up.

 

[BillySimas]

I work for a brokerage firm and I can attest to the validity of these statistics. I watch the performance of retail accounts all day everyday and the amount of successful traders we have is definitely somewhere in the range of 3-5%.

I see the same patterns among losers:

1) They hold on to losing positions and let go of winners too early
2) They aren't well capitalized and they risk too great a % of their account equity just trading in and out of 1 or 2 futures contracts. They open an account with 5k, go bust a few times and they're gone within a few months.
3) They trade too much. I heard a stat somewhere that said that winners either trade only a handful of times a day or they trade like 500 times a day. Obviously if you can get away with the latter, you must have an edge because you'd be broke in a heartbeat without it.

Joe Schmo trader: opens an account with 5k, trades 20 times a day trying to scalp with no plan whatsoever, holds on to losers, goes bust, rinse and repeat.


All of the winners are well capitalized. Some winners have maybe 50k in their account, some 300k, some a million plus. There is probably not one long term winner with an account less than 8k.

 

[Shagi]

Quote from BillySimas:


Joe Schmo trader: opens an account with 5k, trades 20 times a day trying to scalp with no plan whatsoever, holds on to losers, goes bust, rinse and repeat.


All of the winners are well capitalized. Some winners have maybe 50k in their account, some 300k, some a million plus. There is probably not one long term winner with an account less than 8k.

Well tell me any business that has a 90% success rate. Its an old record - you can't make money with a small account. Its utter bullshit. Just to try it I traded a 2k account into 10k in 5months and another 4k account to 16k in three weeks. And I bought sweets for the kids with the money!

 

[kentraderstar]

Everybody in Elitetrader.com is a winner. Or shall i say 95% of ET traders are a winner!

Also, everybody in Elitetrader.com have celebrity friends. Everybody in Elitetrader.com owns a mansion, drive a bentley, and knows the prime ministers.

That is what makes elitetrader.com a special place where people can dream