90% traders don't make it???

I've often read or been told that 70% daytraders aren't profitale, or even 90% forex traders get wiped out.

While I won't deny trading is pretty tough, I've always wondered where that figure came from. I mean is it a statistic or just a figure invented just to give a general idea? And if it is a fact, is it over the past ten years, or cumulatively since markets exist?

It doesn't seem logical does it : if 90% daytraders lose money, gradually they would just quit, thus making that figure decrease. And if newbies (also set to lose) come to replace them then ok the percentage at a given moment would still be the same, but cumulatively it would increase.

Anyone to help me out...?

 

many are called (a sucker is born every minute), but few are chosen

 

I agree trade4success...

But even with one in ten traders making money, you would end up with an ever-increasing number of successfull traders. That doesn't make sense either.

 

don't successful traders retire?

 

Even the 5% that win cant keep it up for long.

Otherwise overtime the market would be full of winners
as over time the number of winners would increase and out
number all other groups (losers and startups) that are forced
to leave the market.

Trading is hard, markets change and you lose your edge.

If you are lucky enough to make your fortune in the markets
cash up your chips while you still have them.

 

Well that could make sense trade4success, I guess.
That would mean there are an equal number of new successful traders than retiring ones.
But if I were a retired successfull trader, I would probably keep on trading . If I can keep on making money, why should I stop?

 

http://catb.org/~esr/jargon/html/S/Sturgeons-Law.html

 

This business is full of uncertainty, just because you can make
money today does not mean you will make it tommorow.
Very few traders are successfull over long periods of time
(read decades), life is dynamic and bad shit happens,
people change, markets change.
Trading and life in general just aint that easy.

 

Well, yes it seems reasonable. Although some (Buffett, Soros) seem to still have an edge after all those years.

Here's another thought : I reckon future markets are not a zero sum (or negative) game from a speculator's point of view, as many actors on the market (companies, central banks) just want to hedge their risk and therefore don't mind losing on markets. Traders make their money from what these non-profit driven operators, like Soros against the central banks.
What d'ya think?

 

Fair enough. Then are you suggesting that 90% successfull traders figure is wrong?