Why do 95 % of traders lose ?
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From the link I posted above :
Birth control and intelligence
Among a sample of women using birth control methods of comparable theoretical effectiveness, success rates were related to IQ, with the percentages of high, medium and low IQ women having unwanted births during a three-year interval being 3%, 8% and 11%, respectively.[35] Since the effectiveness of birth control is directly correlated with proper usage, an alternate interpretation of the data would indicate lower IQ women were more prone to misuse of birth control. Another study found that after an unwanted pregnancy has occurred, higher IQ couples are more likely to obtain abortions;[36] and unmarried teenage girls who become pregnant are found to be more likely to carry their babies to term if they are doing poorly in school.[37]
Conversely, while desired family size is apparently the same for women of all IQ levels,[38] highly educated women are found to be more likely to say that they desire more children than they have, indicating a "deficit fertility" in the highly intelligent.[39] In her review of reproductive trends in the United States, Van Court argues that "each factor â from initially employing some form of contraception, to successful implementation of the method, to termination of an accidental pregnancy when it occurs â involves selection against intelligence."[40]
I trade Stock Indexes, Futures, and Stocks. I generally avoid other markets.
The Stock Market has a built in edge, its historical uptrend...and the ability to reinvest dividends over time. Practically all fund managers & market timers can't beat a buy and hold strategy.
Much randomness in the market, but I do not believe in efficient markets. My opinion: this has been disproved. I believe in mean reversion...but of course it works till it doesn't. I believe in market trends...but of course majority of the time there isn't a trend.
Generalizations. But the math isn't difficult to show that trying to find something that works is difficult, especially for the undercapitalized, unexperienced, undisciplined, those not willing to put in the time or the work involved. The terrain is treacherous.
Too many ways to lose.
If I recall correctly, the 95% number was from floor traders who were washed out. Most within a short time frame, the rest within 1-2 years.
Doing the impossible is betting on unknown outcome , traders are regularly betting on the outcome whose fate is controlled by others.
Investing in short term volatility ,carries uncertainty , risk and potential failure .....all the things not wired in tune with the human brain.
The trader is imposing a view in the market when he places a trade ,the market may not agree with his view , the market may take an opposite direction to the trader.The trader has no way of predicting what direction market will take.Trader is taking a risk when he can not predict direction or has no ability to do so and places directional bets.
Why do 95% of traders lose?
It can be explained with the 80-20 rule.
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80% of all traders don't have a trading methodology/system with a positive statistical expectancy. If the trading methodology doesn't have a positive expectancy, then all the mental discipline and money management techniques in the world won't make a profit with it.
Of the remaining 20% that do have a positive expectancy method, 80% of those traders are either undercapitalized or don't have the emotional/psychological discipline to execute their system.
That leaves 4% profitable traders.
It can be explained with the 80-20 rule.
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80% of all traders don't have a trading methodology/system with a positive statistical expectancy. If the trading methodology doesn't have a positive expectancy, then all the mental discipline and money management techniques in the world won't make a profit with it.
Of the remaining 20% that do have a positive expectancy method, 80% of those traders are either undercapitalized or don't have the emotional/psychological discipline to execute their system.
That leaves 4% profitable traders.
Can you do what GS does without the deep pockets and top-tier minds?
no.
Can you make millions from even a 100k account?
no
Can you significantly negotiate commissions?
99% no
Are you learning how to trade from a book, other retail trader, or someone other than a multi-millionaire trader from the same amount of capital as you?
no
finally, do you turn to ET for even one second a day to learn how to get rich in the markets or listen to some guru?
if you answered yes..
you are the 95%
lol
no.
Can you make millions from even a 100k account?
no
Can you significantly negotiate commissions?
99% no
Are you learning how to trade from a book, other retail trader, or someone other than a multi-millionaire trader from the same amount of capital as you?
no
finally, do you turn to ET for even one second a day to learn how to get rich in the markets or listen to some guru?
if you answered yes..
you are the 95%
lol
This sentence hits me right in the nadz....... I have reviewed my past account blowups and it was always lack of discipline that did it. I had a method with positive expectancy and the test results to prove it, but The Market kept faking me out. It was always after a string of small losses, right before my system would have made huge profits.
It always started with me saying to myself "I'm bored, let's try an experiment"...
And poof. Option writerz win again.
Quote from Wide Tailz:
This sentence hits me right in the nadz....... I have reviewed my past account blowups and it was always lack of discipline that did it. I had a method with positive expectancy and the test results to prove it, but The Market kept faking me out. It was always after a string of small losses, right before my system would have made huge profits.
It always started with me saying to myself "I'm bored, let's try an experiment"...
And poof. Option writerz win again.
So, basically you've re-upped your trading account about to make the same mistake about your edge again.
If you had an edge, you would not have blown up...ever, even once.
The screenshots of your trend following systems lag too much.
Thanks for the consultation.
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