Your Chances of Success

From that article...

More realistic failure rate according to the author and from Professor Birch (make it to year five and you have a 50/50 chance for survival and every year thereafter an increase of 3-5%)

First year 85 percent
Second year 70 percent
Third year 62 percent
Fourth year 55 percent
Fifth year 50 percent
Sixth year 47 percent
Seventh year 44 percent
Eighth year 41 percent
Ninth year 38 percent
Tenth year 35 percent

Thoughts? comments?
 
I treat trading like business. There are less expenses but the risk of loss and failure is much greater in my opinion. But again, it is according to how you run your business.

The wares of our business is pulling the trigger and the buttons we push, decide our faith....its all so easy to ruin ones business.....

Its all numbers and at times making it a real physical business is necessary. I like to take monthly draws to make it real. But I have not lately.

Michael B.
 
Quote from gkishot:

This article is very confusing to me.
At the end of her statistics table she concludes that there is 1 out of 3 chance one will be in business after 10 years.
According to this logic 85% of people stay in business after first year. But does it mean that 85% of people are profitable after first year? I doubt it. This number is kind of high for success rate after 1 year in business. And why actually the success rate of business profitability decreases over time. Why would business which is profitable after 1 year degrades its performance and becomes unprofitable in 10 years? This makes little sense to me.
More...

I agree that she is not saying that they are necessarily profitable after 1 year.

I think part of it is how you view things, does initial success equate with being profitable?

To me success would mean being able to function as a business, being able to do what you do regardless if you are profitable. Obviously there comes a point where you need to become profitable or cut your losses.

Take the video site company that just got bought out by Google, from what I read about them they were up to their ears in debt, but they continued to function as a business and now they hit the jackpot.

They might be a bad example to use but I think you get the idea. If you believe anything is possible than when do you throw in the towel?

Would they still be where they are at if they quit 6 months ago?

Its probably just survival of the fittest whoever is willing and believe's in what they are doing to keep going on until they reach there goal.

Just because a business closes after 1 year or 10 years does not necessarily mean it wasn't profitable. To me a more accurate reason would be that the desire/passion to continue the business is not sufficient to overcome the "price of admission" to continue.

It could also be summed up as so eloquently stated by CaptainObvious:

"That's sticking your toe in the water and saying, FUCK, this is colder than I thought."
 
Quote from fearless9:

Tonkadad,

More than 95% of all traders lose their money!

Now look at it this way.

Less than 5% of the traders walk off with 100% of the loot.

Who are you?
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I am a work in progress, who is in this for the long haul.

When I first used to hear about the 80% to 95% failure rate I used to think thats not going to happen to me, I was going to be the exception. Then when "success" didn't come fast enough I started to fear those statistics and think I was part of that group.

Now I realise they are just numbers and I can choose to be boxed in by them or give them no power, I choose the latter.
 
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