Why Do People Trade when the Failure Rate is So High?

SteveD · Aug 30, 2006

This "study" was, of course, widely reported by the big firms and quickly became FACT.

Even today, you will hear John Bogle quote it as written in stone, "of course, Maria, as you know, 95% of people fail at trading", "studies have shown" etc etc

This study was done during the first part of a very significant transformation of the financial markets as the internet has allowed anyone with the capital, knowledge, and desire to take charge of his/her personal investing, (short/long term) to participate.

I think we will see much more success in the future as people become aware that one has to treat trading as business.

Capital, knowledge, etc etc....training or affiliation with a prop shop, like a Bright...

When I see a "trader" using the terms "bet or win" that is a red flag to me that this guy is really gambling, not trading.

I use the term, "earn" as that is what I feel that I do when a trade earns a profit....my brain power, knowledge etc etc is how I try to make money. Not "betting" .

The future of trading is huge because of the internet....

SteveD

El OchoCinco · Aug 30, 2006

Why not....

88888accountant · Aug 31, 2006

Quote from Rearden Metal:

Are you kidding me?!

Didn't you see her question?: "should retail investors be allowed to trade stocks without some type of certification or training?"

Can you come up with a question any more female than that? Women generally think that the proper role of government is to mother us all.

The U.S. government was originally created, not to rule over us, but to provide the people with a bare minimum of legal protections. The U.S. was essentially a free Libertarian nation throughout it's first century and a half of existence. (Essentially Libertarian, as there were admittedly great flaws in the treatment of racial minorities.)

From 1776 until the early 20th century, the government's attitude towards so-called 'victimless crimes' can be summed up with the following key quote:

A prohibition law strikes a blow at the very principles upon which our government was founded. Prohibition goes beyond the bounds of reason in that it attempts to control a man's appetite by legislation, and makes a crime out of things that are not crimes.

~Abraham Lincoln

...and then came Universal Suffrage and fucked it all up.
Almost immediately, the government began its exponential growth into nanny-state territory, with the federal government shoving its slimy hand into all our lives. Suddenly, the freedom of consensual adults to do as they pleased... was completely crushed out of existence.

Institution of the new & unconstitutional income tax, alcohol prohibition, drug prohibition, Overregulation of business, abandonment of the gold standard, Millions of new political prisoners... it just got worse and worse and worse... Until now?: Police State run amuck. The principles upon which the nation was founded- GONE. Right to bear arms- GONE. Right to due process-GONE. More marijuana possession arrests than all violent crime arrests combined! 400,000 incarcerated political prisoners for the 'crime' of violating drug prohibition.
Right to privacy- GONE. Protection from unreasonable search & seizure-GONE.
...but its all for the children! Right?

Stockgirl's reaction?: "Thank you sir, may I have another?"

Yes I quoted the whole thing because I think it should be repeated.

We should all pool our trader money and buy our own country.

We can use the U.S. Constitution as a base [Since the government isn't using it they probably wont miss it

] And we can all get away from the Fascist dictatorships that we all live in.

We will call our new country,

"EARTH"

88888accountant · Aug 31, 2006

Quote:
I had exactly the same reaction regarding Stockgirl's comment.It's absolutely true Universal Suffrage Movement fucked up lots of things(there is a good article on the subject on www.mises.org)

Haven't looked at the article yet but I always wondered, If 50% of the population was working and still had unemployment, the doubling the working population would be catastrophic unless the second half also created the same amount of jobs per capita. So the only course of action would be to inflate the price of money gradually paying people less as more workers come in

Maybe this is what happened but I do know this. It used to take one income to raise a family, now it takes two.

Efroe · Aug 31, 2006

Quote from ElectricSavant:

Well Ripley I am sad to say that I am a loser then. Is there any hope for me?

Not to me... I aspire to making my living clad only in Boxers!

andread · Aug 31, 2006

Quote from ElectricSavant:

No he is not. He is telling the truth, in my case. But I have never been a loser. I have won much, as I look over my life. I have peace with God, and a wife that loves me and I have done a lot. What else is there?

Michael B.

Yes he is. Even if he's telling the truth, which still has to be proven, he doesn't have the right to be so offensive.
That was simply un unjustified aggression.

Dogballoon · Aug 31, 2006

Quote from 88888accountant:

Quote:
I had exactly the same reaction regarding Stockgirl's comment.It's absolutely true Universal Suffrage Movement fucked up lots of things(there is a good article on the subject on www.mises.org)

Haven't looked at the article yet but I always wondered, If 50% of the population was working and still had unemployment, the doubling the working population would be catastrophic unless the second half also created the same amount of jobs per capita. So the only course of action would be to inflate the price of money gradually paying people less as more workers come in

Maybe this is what happened but I do know this. It used to take one income to raise a family, now it takes two.

Yeah, misogyny apparently is in again, hooray, but it's rare to see it so flagrantly displayed without even a veneer of intelligence to hide it.

traderob · Aug 31, 2006

Quote from bluedemon77:

That raises a question I've been meaning to ask--where the hell did that figure come from? I mean it's repeated over and over, but what is the basis and how was it measured? I'd be willing to bet the basis was some off-the-cuff remark that eventually became cited as a fact. .

Chuck

I wish I could take that bet. There have been several studies over the last 100 years showing that 10% success rate is rather optimistic. The traders who make serious money year after year - is probably less than 1%. Ask to look at the figures of any of the firms at ET - for example Interatcivebrokers- they will refuse to disclose.

p27 of How to trade in stocks:
Jesse Livermore sent a wire asking his broker to send a large sum of money to his bank account.
The operator was shocked:
"Ive been an operator here on palm beach for twenty years and that was the first message I ever sent asking a broker to deposit money in a bank account of a customer".
I"ve seen thosusands and thousands of messages passing over the wire from brokers demanding margins from customers. But never one like yours. I want to show it to the boys"

OddTrader · Aug 31, 2006

Why do people trade? The challenge and reward potential.

From a book review at amazon.com :
Q

Another wise man (Gerald Loeb) once said, "Nothing is more difficult, I truly believe, than consistently and fairly profiting in Wall Street"

UQ

88888accountant · Sep 1, 2006

Quote from Dogballoon:

Yeah, misogyny apparently is in again, hooray, but it's rare to see it so flagrantly displayed without even a veneer of intelligence to hide it.

Lol, I've always found that ignorance runs rapid in those who would choose to attack a person instead of their argument.

p.s. thanks for quoting it all together. My quote begins after the word "mises.org" my fault for not being able to "bold" the part that I wanted. Your fault for placing judgement on someone based on assumption verses fact, reason , and research. perhaps you can find a job with the media if your trading career fails.

as well, the question is a valid one. If you don't like it please go back to playing Frisbee with your pinko or Fascist friends, whichever brainwashed dogmatist group you happen to be with.

Thanx.

(Psst... I may be a misogynist, but I prefer to think of my self as a misanthropist)