Hey, jackass, I've been trading well for several years already. Read the previous posts. I'm not asking this to try to figure out if I want to trade or not, I'm asking this out of curiosity. I think it's dumb that people throw this quote around like gospel without ever really thinking about where it originated from or what it truly means. You know - thinking? Try it some time. Lay off the 'roids, man.
Thanks for the your conducive input. Personally, I haven't found trading to be that hard within the last several years. The hardest part when I started out 10 years ago, however, was my own ignorance and naivity. Once I took a step back and realized that I knew nothing and started from square one and learned to discern what mattered and what didn't, it was easy. That's just me though. Different folks, different strokes. In my opinion, it's people that keep themselves from being successful traders, not the trading itself or techniques or the markets.
Why do people continually put up threads like this one? In order for trading to be worthwhile your returns have to exceed all available investment grade financial opportunities available(meaning Treasury Notes/Bonds, Money Markets, Municipal Bonds, State Bonds, CDs, etc), i.e relative returns on capital. Then it has to be worthwhile in terms of absolute returns. You could be considered a "profitable" trader if you made 1,000 in excess of expenses in one year. But clearly 1 grand is not worth the effort. I believe that if you take the number of people that are profitable in a significant way (bigger returns percentage wise than the opportunities mentioned before) and make 6 figures or greater consisently is less than 1 percent.
Only one person has even hinted at a sound business approach to daytrading. I believe that the real question should be - " Does the income derived from daytrading equal or exceed all other legal viable alternatives available to you for equal risk. If not, you are in all probability simply indulging yourself. Myself and no doubt many other professional business people are also considering their options in similar light following the recent financial turmoil. For myself, I would probably need to fall into the highest .1% of successful daytraders incomes to improve overall profitability. Why waste my time on a fools errand. Develop a good cash cow (business/career) whilst speculating intelligently! There is nothing quite like long term compound returns, to leave you feeling like one of the smartest people in the room! All that glistens isn't necessarily gold! In the Beverly Hillbilly Show the song went "Gold black gold, Texas tea, Oil" but for most daytraders the song goes "Gold fools gold". Best Regards Johno
Who's the genius who came up with the stat that 9 out of 10 new businesses fail in their first 2 years? Or that 9 out of 10 restaurants fail in their first year? Someone give me cold hard facts to support these claims, god dammit!
Interesting fact. The last number I was informed with was 95%. I am quite intrigue as to how they come up with these number myself. It may come from a few prop firms, but regardless, if you truly enjoy trading, the number should not matter to you. PA
Good, I'm glad you enjoy the cold facts as well. I was using that figure as an example of an often quoted little bit of conventional wisdom concerning the failure rate of small businesses. Open an "How to start a business" book and you'll see some dire figure like that in the first couple of chapters. They rarely back it up with data.
The problem is not that the people never make any money in the financial markets, it is that they don't make it consistently. Any fool could have made a lot of money in late 90s doing a simple "buy on the dips" but proceeded to lose it all in the bear market that followed.
I was being facetious. These stats sound reasonable so in the absence of contradictory information, they are assumed to be correct. Anyway, I heard that it was more like 90% of traders lose money. The truth of the matter is that there are more important things to concern yourself with than researching the origins of trader failure rates. Just worry that you don't become one of them.
I think the reasons for failure is this: 80% of the people fail in business because either they don't have good business plan or motivation to success. Anyone, with money can open a business but to success you need lots of other stuff. 80% of the people don't have that. Same goes with investment: 80% investor don't follow the investing rule and discipline. Most of the don't have patience to wait for the right moment. They want quick money to get rich which brings them the failure.