Why do 95 % of traders lose ?

oilfxpro · Nov 5, 2012

Quote from Llxa:

Well I don't really know what kind of criteria did they use to compile this statistics of 95% failure rate? How do they define as "fail" in trading? Closing account? Margin call? Making losses? Quit trading? Because all these three things have happened in about 100% of a trader's trading career at one point of another. So does that mean that the failure rate is 100%?! Most of the traders who have experienced this eventually bounce back and/or keep on trading after a certain period of time. Only a small % of traders actually quit trading permanently after one or all of those things happening to them. So the only % of traders who fail are the ones who quit trading permanently due to persistent losses and that's a very small proportion of the traders population because I wouldn't qualify a trader who quit trading for a while just to develop a better trading system and then came back and became a successful trader as a "failed" trader.

So maybe this 95% failure rate is the failure rate of traders at a GIVEN time? But that's an irrelevant and meaningless figure because at ANY given time, this is the failure rate for any investment instruments out there albeit stocks, bonds, mutual funds and etc. If you are able to poll any stocks, bonds, mutual funds at any given time, you will see that 95% of them is losing money and if they are subject to the same capital limitations as any individual traders, then they will also be subject to margin calls and account closing which would mean that 95% of them have "failed". So are the traders in the other investments necessarily better traders just because they can hide their losses behind their thick capital?

So in conclusion, is it fair to scrutinize on individual retail traders by slapping on a high "failure rate" just because their losses are more transparent and are exposed more swiftly? If taking all these into account, what is the REAL rate of failure among traders? Is it really as high as 95% as thought to be?

Still the failure rate is 95 % , because the rest are not traders but long term investors on buy and hold.

Klemen · Nov 5, 2012

Sport really gives you iron determination needed for successful trading (long run)

cornix · Nov 5, 2012

Quote from Klemen:

Sport really gives you iron determination needed for successful trading (long run)

Very true. These activities have much in common.

oilfxpro · Nov 5, 2012

Quote from cornixforex:

Very true. These activities have much in common.

In sports you have mentors, coaches ,managers educators ....yes you have parasites sucking the blood out in both industries , most end up losers.

http://jacksonville.com/opinion/blo...evander-holyfield-joins-list-boxers-who-ended

You should see the the junk emails I receive for hundreds of different systems , methods sellers , courses, trading educators , books , seminars ,investment opportunities , signals ......all from scammers well known .

cornix · Nov 5, 2012

Quote from oilfxpro:

In sports you have mentors, coaches ,managers educators ....yes you have parasites sucking the blood out in both industries , most end up losers.

http://jacksonville.com/opinion/blo...evander-holyfield-joins-list-boxers-who-ended

Same in trading. But just like sport coaches, they only pay real attention to those they believe are likely to become stars.

smallStops · Nov 5, 2012

Quote from oilfxpro:

In sports you have mentors, coaches ,managers educators ....yes you have parasites sucking the blood out in both industries , most end up losers.

http://jacksonville.com/opinion/blo...evander-holyfield-joins-list-boxers-who-ended

You should see the the junk emails I receive for hundreds of different systems , methods sellers , courses, trading educators , books , seminars ,investment opportunities , signals ......all from scammers well known .

Knowing how to make money ( trading, sport,...) does not mean knowing how to keep money made. :mad:

oilfxpro · Nov 5, 2012

Quote from smallStops:

Knowing how to make money ( trading, sport,...) does not mean knowing how to keep money made.

Exactly ! Your set ups and trading make you a lot of money , most traders lose it with their phsyche ....greed , fear , over trading , emotions , gambling , stupidity , mistakes , discipline , personal traits etc and still end up as losers .

Desire for automation scamming or being scammed , better courses from another Guru ..........or the broker pfg takes it all , programming scam for automation etc , the list is endlesss

smallStops · Nov 5, 2012

Quote from oilfxpro:

Exactly ! Your set ups and trading make you a lot of money , most traders lose it with their phsyche ....greed , fear , over trading , emotions , gambling , stupidity , mistakes , discipline , personal traits etc and still end up as losers .

or by developing a lavish lifestyle, or by becoming addicted to drugs, etc...
thus feeding all the parasites out there - pimps & brothel owners, drug dealers, luxury goods salespeople, and the list if long of people who want to help themselves...

ammo · Nov 5, 2012

Quote from Llxa:

Well I don't really know what kind of criteria did they use to compile this statistics of 95% failure rate? How do they define as "fail" in trading? Closing account? Margin call? Making losses? Quit trading? Because all these three things have happened in about 100% of a trader's trading career at one point of another. So does that mean that the failure rate is 100%?! Most of the traders who have experienced this eventually bounce back and/or keep on trading after a certain period of time. Only a small % of traders actually quit trading permanently after one or all of those things happening to them. So the only % of traders who fail are the ones who quit trading permanently due to persistent losses and that's a very small proportion of the traders population because I wouldn't qualify a trader who quit trading for a while just to develop a better trading system and then came back and became a successful trader as a "failed" trader.

So maybe this 95% failure rate is the failure rate of traders at a GIVEN time? But that's an irrelevant and meaningless figure because at ANY given time, this is the failure rate for any investment instruments out there albeit stocks, bonds, mutual funds and etc. If you are able to poll any stocks, bonds, mutual funds at any given time, you will see that 95% of them is losing money and if they are subject to the same capital limitations as any individual traders, then they will also be subject to margin calls and account closing which would mean that 95% of them have "failed". So are the traders in the other investments necessarily better traders just because they can hide their losses behind their thick capital?

So in conclusion, is it fair to scrutinize on individual retail traders by slapping on a high "failure rate" just because their losses are more transparent and are exposed more swiftly? If taking all these into account, what is the REAL rate of failure among traders? Is it really as high as 95% as thought to be?

the 95% number comes from 1st time seat holders at the cboe and it refers to the 1st year, many of them regroup and come back and stick it out

Llxa · Nov 5, 2012

Quote from oilfxpro:

Still the failure rate is 95 % , because the rest are not traders but long term investors on buy and hold.

Yes but what I have problems with is that they slap that "95% failure rate" on retail forex traders to make it look like that only retail forex is bad and risky when in fact this "95% failure rate" compiled by whatever criteria applies in all investment markets including mutual funds and yet you don't hear about it when it comes to other markets. And that's very misleading.