Why does the retail investor continue to lose?

[MacBookProHo]

I hate to make the cliche Wall St/trading VS Casino debate thing...but why do 99.8% of the people who enter the casino fail? It's because they have Dreams, fantasies, imaginations, Delusions and illusions and prayer and lucky charms stuck and compressed in their heads.

And why do the very rare table players win? Because they understand the variables and mechanics of the game, of the trade.

This is why the Retail crowd of trading/investing will always lose in the end. They are primal human beings, filled with emotions and thought.

 

[SimpleMeLike]

This book was originally published in1940.

Hello zdreg,

I do not know why everyone like Bullshitting, especially if you been trading for awhile.

Traders lose money because:

1. Because has alot of money, and get conned by reading bullshit trading books and spending money on trading course, trading methods, trading teachers who do not provide Edge or proven records of being able to trade.

2. They lose all their money giving it to scam and cons and pimps in the trading business. They the lose more of it trading the way the scam and cons and pimps in the trading business show them how trade.

 

[zdreg]

Hello zdreg,

I do not know why everyone like Bullshitting, especially if you been trading for awhile.

Traders lose money because:

1. Because has alot of money, and get conned by reading bullshit trading books and spending money on trading course, trading methods, trading teachers who do not provide Edge or proven records of being able to trade.

2. They lose all their money giving it to scam and cons and pimps in the trading business. They the lose more of it trading the way the scam and cons and pimps in the trading business show them how trade.

Traders lose money because they never took the time and effort to develop an edge.

 

[SimpleMeLike]

Traders lose money because they never took the time and effort to develop an edge.

Hello zdreg,

I agree with you 1000%

I agree with this fully.

I will add this to your comments, please let me know you if agree with me?

1. Traders lose money because they never took the time and effort to develop an edge.
2. Traders lose money because they give money to Trading Sellers who do no have edge.
3. Traders lose money because they trading whatever the Trading Seller taught them with real money and no edge.

In other words, we can not forget about the trading scams out here.

 

[Nine_Ender]

I think more has been written than needs be. Whatever the reason one gets in the gambling den is theirs. The result is also theirs. Smart people, driven people, lucky people, losers... All trying to make a buck without having to clock a 9 to 5.
So many hustlers; Vegas on steroids. The retail investor walks in with a dream. Some walk out with it, most don't. Who knows the name of the 2nd string defensive back of the Broncos? Exactly. The light is on the winners, don't spoil it.

The concept of this thread is false. Most investors do very well long term because they invest very little time into it yet get a decent passive return. "Investors" that fail often do so because they become part time "Traders" or market timers. In terms of best bang for your time, swing trading market exposure with infrequent changes is a really good approach for market aware people. When markets look bad you sell on the initial drop, and when a decent floor comes in you buy. Doesn't have to be perfectly timed. If markets drop 20% and you only lose 5-10%, you are ahead of the game long term. This was my approach from 2009-summer 2020. Very low risk. SPX or TSX exposure not something like QQQ which is very IT intensive.

I transitioned towards more active trading at the 2020 bottom because I could see oversized opportunities on the TSX and I had the time. When such opportunities are over I'll settle back to a more passive approach with some or all of my money.

 

[MacBookProHo]

1. Traders lose money because they never took the time and effort to develop an edge.
2. Traders lose money because they give money to Trading Sellers who do no have edge.
3. Traders lose money because they trading whatever the Trading Seller taught them with real money and no edge.

In other words, we can not forget about the trading scams out here.

SimpleMeLike,
Are you rich yet, or successful yet, or positive yet, or profitable yet discovering manual trading or automotive trading?
I've been casually reading this site, and you've been kind of seemingly stuck and disgruntled for some time.

Don't be the hunted in the market wilderness; be the big game hunter yourself for a change, for once.

 

[SimpleMeLike]

SimpleMeLike,
Are you rich yet, or successful yet, or positive yet, or profitable yet discovering manual trading or automotive trading?
I've been casually reading this site, and you've been kind of seemingly stuck and disgruntled for some time.

Don't be the hunted in the market wilderness; be the big game hunter yourself for a change, for once.

Hello MacBookProHo,

Great question.

The answer is No, if you are based profitability on 1 year track record from a day trader. Long term investing, yes doing very well. But my focus on on day trading.

I am not disgruntled or mad AT all, I just do not like bullshitting. I am VERY VERY happy. I had a perfect weekend.

And I am VERY VERY happy with my trading. Very happy.

In this day trading business, we have to be our own best cheerleader.

 

[newwurldmn]

I hate to make the cliche Wall St/trading VS Casino debate thing...but why do 99.8% of the people who enter the casino fail? It's because they have Dreams, fantasies, imaginations, Delusions and illusions and prayer and lucky charms stuck and compressed in their heads.

And why do the very rare table players win? Because they understand the variables and mechanics of the game, of the trade.

This is why the Retail crowd of trading/investing will always lose in the end. They are primal human beings, filled with emotions and thought.

this is a terrible example. 99.8percent fail at a casino because the expected return for 100percent of the people is negative. The .2percent who succeed are lucky (someone has to be on the right side of the distribution).

 

[MacBookProHo]

this is a terrible example.
99.8percent fail at a casino because the expected return for 100percent of the people is negative.

Many people who enter a casino, Vegas, or the market....truly believe they will hit it big. I don't believe those people to have an expected rate of return that is negative.
Everyone enters the casino, Vegas, or the market...with a bright, rosy, face....but leave looking like a depressed clown.
Many people have enormous hopes, dreams, magic and prayer that lovely money will fall into their laps. But the real world does not work like that.

You, a trader or gambler, have to be realistic, intelligent, neutral, objective, open-minded, creative, patient and calm...but also bold and ambitious at the same time. Many people lack these unique, well-rounded, qualities and traits to succeed.

 

[taowave]

I posted this in the Cathy Woods thread,but it clearly illustrates why retail gets hammered..

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1. For instance, Peter Lynch managed the Fidelity Magellan Fund from 1977 to 1990, generating about a 29% average annualized return. Yet, according to a study by Fidelity Investments, the average investor in the Magellan Fund managed to lose money over that period. The problem? Investors tended to buy the fund after hot performance streaks and sell after cold streaks ensued.
   
   Ken Heebner’s CGM Focus Fund gained 18% annually from 2000 – 2009, ranking as the top performing mutual fund tracked by Morningstar. Yet, the average investor lost 11% per year due to poor timing (source: Wall Street Journal).
   
   Market timing mistakes are common beyond the realm of star managers, too. For decades, the research firm DALBAR has published reports profiling investor behavior. They find the average investor switches strategies too often (“chasing heat”), under-allocates to equities, and sells at inopportune times. As a result, the average investor underperforms compared to broad market averages.
   
   From 2000 – 2019, DALBAR found the average equity fund investor achieved a 4.3% annual return compared to 6.1% return for the S&P 500 index. Meanwhile, the average bond investor achieved a 0.5% return compared to a 5.0% return for the Bloomberg Barclays Bond index.
   
   One thing that makes sticking to any investment strategy particularly hard is volatility. For instance, the CGM Focus Fund has historically exhibited an above-average beta (a measure of market sensitivity), as does ARKK.
   
   On the other hand, Berkshire Hathaway shares have historically exhibited a below-average beta. That partly explains why Warren Buffett has been able to attract sticky shareholders over the years