Why do 95 % of traders lose ?
- Thread starter oilfxpro
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Well they do make good entertainment especially those live trading webinar ones. Just log in and watch when the trade is not going the way according to the guy's methods and him scrambling to come up those "justifications"...
We traders need entertainment somewhere if we are not allowed to blow our profits on drugs, alcohol, prostitutes...
I don't know any trader that does not start out thinking that somehow they are smarter than everyone else.
And if you spend anytime on ET it becomes easy to believe.
What they don't tell you about the losers are
They have unrealistic expectations on return on investment
They are very gullible
and most importantly, they are under capitalized.
If you have realistic expectations
and a good bullshit detector
and are adequately capitalized
there is no reason you should fail anymore than any other business owner fails
I think about 85% restaurant owners fail in the first 5 years
probably for the same reasons
yet we all know and regularly eat at restaurants that started out as a cart on the street and many that have been in the family for years
after my first year of trading ES I got a job working the night shift at the C store for $8 per hour, just to help pay the bills, so I didn't have to deplete my trading account anymore
You have to want it pretty bad
The persentage rate of failure may change over time.
The criteria does not.
Lixa:
Let's suppose you pick a rate of failure number.
Then all you have to do is think through why it turns out to be the way it is.
This means you can think up gp/nogo questiions and do them according to their natural rank.
I have traded for about 55 years.
Each go/nogo question eliminanted half of the remaining potential traders.
So here is question 1:
Since trading is either long or short, do you use binary mathematics for analysis of all market facets?
We know there are winners who do not use binary mathematics.
Well you won't know where you stand until you try it. You never know; you could belong in that 5% but you won't know it until you do try it. And for first-year traders, it makes sense that the failure rate is so high. Like in the movie Matrix when Neo failed his first jump off the top of a skyscrapper, Trinity remarked "Everybody falls the first time." Not to compare solely to a movie but trading is a little like that. You don't fall the first time and then quit. You pick yourself up, practice and try again and again until you succeed. Many successful traders today have quit and/or stopped trading before and perhaps multiple times before. So is it that relevant to use a trading statistic of first-time new traders as an illustration of overall trading success? I think there should be a statistic of traders' success/failure over a longer timeframe like 5 or 10 years and that would give a better picture.
And the ones that do make it are the ones that want it badly. It's only the ones that want it the worst that make it at the end.
In the remaining 50% who would be winners at this point, we need to look at what kills them in this group.
So question 2 becomes:
2. Do you predict?
I use binary mathematics (called Boolean Algebra from whence computer logic comes) and I do NOT predict since I only need to know that I know in the Present.
After these two questions we are down to 25% of the sussessful trading public and we know some people have the view of not using binary logic and they also bet using OODA. therefore, the 25% are all not just the same kind of traders.
Lets divide the remainder in half a few more times with other questions.
My question 3 is an exacting one where I raise the question of the Scientific Method.
3. Do you get answers by deduction or by induction?
Personally, I deduce and quants use induction. Atleast the remainder is 12.5% of the population.
this where it gets neat. We all watched the LTCM croud go out of business. this doesn't mean if a person has a lot of capital he can win back an exisitance.
I like looking at all of those who started small and really made it
My favs are Darvas and William J. O'Neill.
A good starting point for defining losers would be predictors who use probability to bet on the future. OODA is a perfect example. So are fighter pilots who are trained under OODA.
So question 4 would be something like:
Are you in the market all of the time?
Obviously big money is in the market all of the time. So am I. I just work to stay on the correct side of the market price segment by price segment.
We are now in the 95% range. with T/F Q's.
Most people prolong their potential trading life as losers by not being in the market very often or very long. this is where setups come from and failing to see how to exit setups. there is not a noe on one relationship between setups to enter and setups to exit. by not using binary mathematics most people fail to learn to trade and they give up and go elsewhere.
If a person wishes he can take out a sheet of paper and find out what the envelope is for long and for short trends. One envelope fits all.
So the definition of a losers becomes more complete: predictors who use probability in the face of only one market pattern to bet on the future.
We also find out that of the non losers, most have to work full time and be in the markets full time and they do not make much of the full market's offer.
Certainly by now, it is possible to find out that people who write about "successful" traders have not found any traders who take the market's full offer.
So far, no one to speak of has really found out what the standard is to measure perfomance against. Obviously, it is the market's full offer.
This comes from using the wrong math, by predicting, by using induction and by not being in the market much of the time. These charaterisitcs are what is called a potential trader learning failure and then quitting.
Because the bar is so low for begining to bet and lose, most people run out of money before they learn to use binary math, to not predict, to deduce, and to always be in the market and always be on the correct side of the market.
It takes about 40 days to have it all down pat.
So question 2 becomes:
2. Do you predict?
I use binary mathematics (called Boolean Algebra from whence computer logic comes) and I do NOT predict since I only need to know that I know in the Present.
After these two questions we are down to 25% of the sussessful trading public and we know some people have the view of not using binary logic and they also bet using OODA. therefore, the 25% are all not just the same kind of traders.
Lets divide the remainder in half a few more times with other questions.
My question 3 is an exacting one where I raise the question of the Scientific Method.
3. Do you get answers by deduction or by induction?
Personally, I deduce and quants use induction. Atleast the remainder is 12.5% of the population.
this where it gets neat. We all watched the LTCM croud go out of business. this doesn't mean if a person has a lot of capital he can win back an exisitance.
I like looking at all of those who started small and really made it
My favs are Darvas and William J. O'Neill.
A good starting point for defining losers would be predictors who use probability to bet on the future. OODA is a perfect example. So are fighter pilots who are trained under OODA.
So question 4 would be something like:
Are you in the market all of the time?
Obviously big money is in the market all of the time. So am I. I just work to stay on the correct side of the market price segment by price segment.
We are now in the 95% range. with T/F Q's.
Most people prolong their potential trading life as losers by not being in the market very often or very long. this is where setups come from and failing to see how to exit setups. there is not a noe on one relationship between setups to enter and setups to exit. by not using binary mathematics most people fail to learn to trade and they give up and go elsewhere.
If a person wishes he can take out a sheet of paper and find out what the envelope is for long and for short trends. One envelope fits all.
So the definition of a losers becomes more complete: predictors who use probability in the face of only one market pattern to bet on the future.
We also find out that of the non losers, most have to work full time and be in the markets full time and they do not make much of the full market's offer.
Certainly by now, it is possible to find out that people who write about "successful" traders have not found any traders who take the market's full offer.
So far, no one to speak of has really found out what the standard is to measure perfomance against. Obviously, it is the market's full offer.
This comes from using the wrong math, by predicting, by using induction and by not being in the market much of the time. These charaterisitcs are what is called a potential trader learning failure and then quitting.
Because the bar is so low for begining to bet and lose, most people run out of money before they learn to use binary math, to not predict, to deduce, and to always be in the market and always be on the correct side of the market.
It takes about 40 days to have it all down pat.
In my experience, successful traders are generally playing a completely different game to most of what is discussed on public forums. In general terms they play the role of the casino rather than the gambler, I'm not sure any of this is really a secret per se, but the signal to noise ratio on forums is so high it's nearly impossible for the newcomer to cut though the rubbish.
Casinos trade probabilities , gamblers bet on direction using technical analysis , form of the instrument and other personal biases.
There is so much crap posted on forums , finding good information in good threads is like finding needle in a haystack.Some of the stuff posted is biased , to make the owners , sponsors and internet marketeers rich.
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