I agree with you Lindq What I would like to do is switch gears for a moment and offer something that sort of illustrates the problem for retail traders. While I am fiddling around here, watching news and monitoring my position, I notice that price (I trade the ES contract) reached a swing high of approx 1338, then a swing low of 1331.25. When it did that I took notice. That swing low is an important price point. I know that because I have been watching this contract trade for a number of years, and I have a framework from which to make observations both long term and short (in this case short)...So I watched the 13:20 EST bar trade and when I tranistioned into the 13:25 bar, I got long at 1335.25 with a 1.5 stoploss. I knew from experience that this could go either way but if it was going up it would do so I would take very little heat and the target would be at least 10 pts (my opinion). Now we are looking at 1340.25 or so and I haven't got my 10 yet, but for me this is just another walk in the park. Not much emotion or anxiety. I am trading it pretty mechanical, scaling out every couple of points or so... In the same room with me, I have a young guy who is visiting and he is watching over my shoulder. He is also trying to trade from his laptop and he got long at the same time I did. He's very inexperienced. He got long at 1332.25 and got flushed out at 1333.75 (he got anxious when it retraced so he wussed out)...I told him to enter long on the next bar. he did...Long again at 34.25 (lost some edge and paid the extra commish) he watched while it moved up to the pivot and he got washed out there as well. No prob, but he is out at 1336...and very satisfied with his "great trade" I am still long from 1332.50 and we are at 1343. The difference between retail and professional in dollars and cents is retail...Trade 1....1.5 pts.......Trade 2.....1.75 pts Professional...Trade 1......we're at 1346 now and I am scaling out, have just a couple of runners left.....nearly 15 es points What I want to say about this is not "hey what a great guy, what great trade....uh uh...what I am saying is the retail trader is a weak hand...he hasn't got the experience, hasn't developed the judgement and as a result, he can't beat expenses (commish, losses due to noise, etc), and that is exactly why he is here trying to figure it out watching me trade.... This is simple human nature and it ain't gonna change Good luck Steve Edit; Check the time stamp for reference as I am still in this trade. Edit at 2:06 EST If we get back to 1342 or so I will be flat, otherwise I am looking for a test of the previous high at 1353. Retail is out and "just watching"... Edit at 2:13 EST We retraced back to 1342.75 and "retail boy" is asking "why did you give back so much of your profit?" Edit at 2:15 I am flat at 1342. Anybody know the answer to his question?
If you go over to this forex broker's website, http://finance.sts.bg/i/?p=ctrating&i=200802 ,you can find results from a demo competition for the month of February 2008. There were 330 contestants entered, with starting balances of $5000 in virtual money. 113 of them were profitable. 52 of them were at breakeven ( they didn't do a single trade). The remaining 165 contestants lost money, and some almost got wiped out. Try this experiment for 12 previous periods, and average the statistics into "winners", "losers" and "breakevens". I would think that the percentage of winners is about 15-20 % tops on average.. However, there are limitations in the data, because we are only looking at monthly periods. It would have been interesting to look at a contest that was open to the public over the past 5 years and see who's winning, who's losing and who's scared to pull the trigger.. I also found this A 2000 study by the North American Securities Administrators Association, quoted in Forbes, found that "77 percent of day traders lose money. http://www.enotes.com/small-business-encyclopedia/day-trading
Quote from dbs119: $5000 in virtual money. 113 of them were profitable. 52 of them were at breakeven ( they didn't do a single trade). The remaining 165 contestants lost money, and some almost got wiped out. Try this experiment for 12 previous periods, and average the statistics into "winners", "losers" and "breakevens". virtual money is almost irrelevant to prove anything. Someone who has no skin in the game is much more likely to take fliers, because there is nothing to lose.
That sounds about right. Many of those who claim to be successful traders don't seem to understand that "made $7000 last year" is more an accident than success... Success is NUMEROUS years of reliable profits, allowing someone to not have to work for a living. Most others are from DuffersVille.
<i>"LOL. And I've seen at least 89,000 of those come and go. And they weren't serious about trading. They were serious about WANTING to trade, which is a different story altogether. I'll venture a wild guess that there are less than 100 active, fulltime, profitable (meaning professional) traders who visit or post to this site on anything approaching a frequent basis. Others are trying, in various stages of success or duress. That's not to take anything from E.T. It's a good resource. But were talking here about the reality of the business."</i> The 90k aliases that have been spawned since inception here are in no way reflective of individual people, let alone serious aspiring traders. If every alias was tied to one person via credit card verification, sum total would be vastly different. Measured by alexa pure page views = hits alone, last time I knew tradingmarkets.com and tradethemarkets.com had considerably more traffic than ET. Whatever size may say about attracting serious people, I don't know. My definition of someone serious about learning this profession would be a person who is capitalized enough to begin trading real $$ when the time arrives with no pressure for instant success. That person would be mentally and emotionally balanced, realistic about the learning curve of any profession, expecting the process to take time & effort, understanding that trading for consistent profits does not mean trading for a constant adrenaline pump or ego inflation. What percentage of people who fit that general description makes up the ET population is unknown. Best one can do is look at the thread titles and content, then draw conclusions from there. IMO the success rate of aspiring traders who enter the learning curve with business professionalism in mind is way above 5%. If everyone who ever fogged a trading account is factored in, the success rate is probably much less than 5% with dead wood included.
This is a subject Terrance Odean at Berkeley has looked into with comprehensive Taiwanese data. http://faculty.haas.berkeley.edu/odean/papers/Day Traders/Day Trade 040330.pdf
what a ridicolous thing to say. on a daily basis the 10pc losers has to support financially the whole mkt not just trough offering and bidding endless tons of paper such is typically very deep liquidity that's sought by consistent winners; but has also to be capable of meeting supply and demand requests overwhelming them 9 to 1. don, get a grip.
The statistics do not really matter. Why do you care if others can or can't ? The question is can you ? What matters is what is within. If you have the guts, disicipline, heart and a bankroll, odds are you will succeed IF YOU PUT IN THE WORK.