I replied to your post in a clear, coherent, and polite manner. As I suspected, you cannot support your opinion with logic or reason otherwise you would have done so. Here are the posts again in case you need them: -------------------------------------------------------------------------------- Quote from Ivanovich: I don't mean to get into this dick swinging contest, but when I see statistics like this, it is quite obvious you're not using any stops whatsoever and that you're whole "strategy" is to hold out until price comes back to where you want (or in this case, need) it to. You claim "risk was limited", but I would be interested in knowing (the truth of) what your max drawdown was, max drawdown on your worst trade ran you, and how long some of these trades were open. Because to claim you had a win rate of 97% in forex (even referring to it as a "win rate" implies gambling, not trading) - to any forex trader worth his/her salt is more relevant of Mr. Market type strategy than anything else. Anyone remember Skalpz/Coinz? He'd open two accounts, go long one and short the other on a given pair and just hold indefinitely. Hoping that a pair returns to a given point is not trading. It is, in all forms, gambling. It is no different than going to a casino and placing a bet. -------------------------------------------------------------------------------- Cabletrader replied: lol, I don't know what to say in reply, you're wrong on pretty much all points! Most of the answers are in the thread, in fact they're in the post that urged you to post, but to save you the trouble of reading through it I'll give a brief reply to your points. If you need more detailed replies then please read my previous comments on exactly the same questions and perhaps reply to them instead of asking the same questions again. ...Dick swinging... - No, it was a response to what some people were saying regarding profit potential of trading forex, for instance one person was saying consistent monthly returns of 50% aren't possible. ....quite obvious you're not using any stops whatsoever... - Obvious, how? Surely 5% risk means just that, 5% risk! Stops were used. Trading without protecting equity in some way is never a good idea. Max drawdown and trade duration - 5%, and trades were open until they were closed, usually within a day but obviously no longer than a week. Win rate suggests gambling - Win:lose is a recognized way of expressing, well, the win to lose ratio. What would you prefer wins to be called? Gains? Profitable trades? I'm here to please and will call them whatever you like. Anyone remember Skalpz/Coinz - Yes, but how is that relevant? Although my trading in no way resembles 'going to a casino and placing a bet' (that much is obvious) it's interesting that you think going to a casino and placing a bet is automatically a bad thing and will lead to loss, a few people on this thread think the same thing. Why? Here's an excerpt from a previous post: There are smart gamblers and there are suckers or mug punters. A sucker relies on luck and a hope and a prayer. He hasn't analysed the statistical probabilities of winning overall, he just has a punt and hopes he wins. A smart gambler on the other hand makes sure he has an edge and that the probabilities of winning overall are in his favor. He doesn't rely on the outcome of one bet but instead looks to make money on a series of bets, overall he looks to be profitable regardless of the outcome of one individual bet. He manages his money and limits his risk while at the same time maximising his reward. He develops the discipline necessary to follow his strategy and avoid impulse or revenge betting. In essence that is trading.
Stock, Futures and Options Magazine Article: Jan Issue - 8 Tips for 2008 "A study by an accounting firm for more than 1000 traders showed that in 2004 only 36% of [equity] traders were profitable and just 4 percent made greater than $50,000. That means that 96% of traders cannot pull 'at least' 20 cents a share out of stocks daily." That is an interesting statistic that probably fits other traders closely. T200k
WHat does it mean exactly, that most traders cannot pull at least 20 cents a share out of stocks daily? "stocks" is a pretty wild generalisation. Some of the stocks I have traded are in the 10-20c range. But im in Australia. In the US, most stocks are in the $50-100 range?? Still a pretty poor way to put it though.
They left out FX trading. I wonder what the results would be from a study of 1000 FX traders, I'm sure it would be 90%+ failure rate. I don't think such a study would be possible though because the FX brokers would not participate.
I have heard 90-95% of all traders fail. That number gets thrown around as if its gospel. I wonder if its true? I also wonder how that compares with everything else in the world. Like starting a business? I have heard that 90-95% of all new businesses fail within the first 5 years. I have heard that 90-95% of authors never get published. 90-95% of people that play college level sports never make it to the pros. 90-95% of all people who masturbate go blind. I think this one is not true because there would be a whole lot of money to be made from selling seeing-eye dogs if this were true. Whats the definition of failure when they throw this percentage around in regards to trading? Is that having a losing trade? Blowing out your account? Quiting in frustration? Or all of those and more?
This has been an interesting thread -- 60 pages of posts, several flame wars, trolls, etc. Confusing jargon (10 pips per day, 10 cents per day) aside, the subject of this thread is average net income per day. If you do some reading, it becomes clear that what we are talking about is $100 per day (or $25k per year) mostly irrespective of account size. There are two ways to track performance: return on equity and net income per day. Return on equity is useful because it allows us to compare different investments or trading styles, and it allows us to get feel for what is possible. It is possible to make 500% per year, but highly improbable. Five percent is per year is pretty easy. My personal goal is 20-30%. Below 20% requires re-thinking my strategy and execution. Above 30% calls for celebration. But I primarily focus on average income per day, because my trading capital is also the rent money (something I don't recommend). I know that as long as I can continue to pay the rent, I can stay in business. I have found that $100 per day is a misleading number, because there will be many days when we make a lot more than that even during a losing period. Twenty-five or fifty thousand per year is a lot more instructive. These are ambitious goals for someone without a lot of capital, but should be within the realm of possibility. My wish for the new year is that we can continue to have a polite and respectful discussion of these very important trading issues. [rwk]
I wholeheartedly agree with RWK on the 'respectful' approach in order to move us all ahead to the next level. I dropped an email to Thomas Bulkowski (SFO author) to see if he had access to any performance data from the same accounting firm on forex/currency futures trader performance. I will post what I get back. I think it would be helpful to know where we each stand in that statistical population. T
Bulkowski responded that his quote came from a 2005 Active Trader Magazine article that linked to the 'patternsite.com' which I didn't find super helpful. I had hoped for more. T
That is disappointing. I guess we will have to file it under "trader lore". I agree with jaronimo that trading has a high failure rate, but I am not sure anybody knows what it is. All startups have a high failure rate. Starting capital requirement for trading is low enough, especially for someone with a job, working spouse, or passive income, that a person can keep trying for a long time. One of the things that tends to suck people in is that it looks so @#$%& easy. There was one somewhat interesting point on Bulkowski"s web site. He said that he was unable to find a shorting strategy that works even in a bear market. That doesn't mean that it cannot be done, but it also agrees with my experience.