About the 95% statistics. Just a question

Discussion in 'Trading' started by Canados, Feb 6, 2008.

  1. Canados


    Hi there,
    I read hundreds and hundreds times that 95% traders are losers. I need to know who do they consider a trader?

    John is a total newbie and never studied a trading book. He opened an account because he heard that trading can make him rich. He made a couple of trades and blew up his account.

    here the question

    Is John considered a trader from those who make the statistics?
  2. yes
  3. I don't know where people get these "statistics".

    What seems clear from observation is, that anyone can start trading if they have a few bucks in an account. You don't have to "qualify" or have an education, or have any training...This implies that most retail traders will fail, because they are competing in an arena with skilled professionals....this is just common sense.

    That is why retail traders who trade actively are likely to be losers.

    It is why longer term investors who take a conservative approach are often net winners.

    Its just human nature at work, and I doubt it will ever change.
  4. lindq


    Obviously, no one keeps statistics on the success or failure of traders. (With the possible exception of prop shop owners, who ain't saying.) To do so would require some sort of registration or tracking mechanism. God forbid.

    But I think it's fair to say that of 100 people who start on the path to trading, no more than 5 are profitable after a couple years.

    The remaining 95 have managed to feed the system with their dollars, supporting brokers, advisors, software vendors, data services, websites, publishers, convention producers, prop shop owners, and those of us who are fortunate enough to be around to take their money in trading.

    The 95% figure is a general rule of thumb, and that's close enough for someone to figure their odds. Which are just above slim and none.
  5. Fangdog


    I have been in a number of businesses, if the dollar requirement to be in these businesses were the same as "trading". There would be a lot more inexperienced people attempt these businesses. It is my opinion, the success to loss ratio would be the same if not worse than "trading".
  6. I personally know 5 people who trade(d) full-time.

    3 of them are still trading and making 6-figure income.

    2 of them blew up after several months.

    Obviously, I'm still trading also.

    So in my case, 4 out of 6 people are still trading.

    No clue how 90% of people fail as a trader....
  7. And Slim left town, on the 2:45 stage coach west...
  8. Canados


    thanks guys for your replies.
    You're giving me a confirmation to my opinion about the 95% statistics.
    He never scared me because I knew that with effort it's possible to become successfull, and I did after a couple of years.
    I'm not like John
  9. I do agree the problem is many people open a trading account and treat it as a lotto ticket. You are competing against professional , you need to have at least a strong level of knowledge. This is why I want to learn before I actually open a account
    :) :(

  10. Because choosing your own set is not representative. Further, a sample size of 6 is irrelevant. Few traders start out as "full time traders." They have to work, and trade on the side. Many of them start with $5000 give or take. They are killed by:

    bad money management

    insufficient trading capital

    no edge (trading is a negative sum game)

    trading costs (scalping, for example)

    errors in order placement (short instead of long, #contracts)

    errors in judgement (not taking a loss or not reviewing their positions often).


    Many of these people blow out in months.

    and numerous other things
    #10     Feb 6, 2008