Discussion in 'Psychology' started by ShoeshineBoy, Oct 3, 2003.

  1. Motley Fool reported the cheery stats posted below. This is just a reminder to keep hanging in there even if you see others failing and even if you are failing initially. It won't come easily:

    "There's nothing like a 60% return in less than a year -- as we've seen from the Nasdaq -- to make some people think they've got the Midas touch. Yes, the day traders are back. It seems like some people never learn.

    According to Tuesday's edition of The Wall Street Journal, brokerage firms such as Ameritrade (Nasdaq: AMTD), E*Trade (NYSE: ET), and Fidelity Investments are reporting an increase of trading volume. The spike is huge -- trading activity in September was as much as 30% higher than in August.

    To attract this lucrative business, many of the brokerages are lowering commissions for customers who make between 108 and 250 trades a year, depending on the company.

    When we say "lucrative," we emphasize that this is lucrative for the brokers, not the traders. Even during the bull market of the '90s, only 11.5% made a profit, at least according to a study by the North American Securities Administrators Association.

    According to managers of day-trading firms cited in a Washington Post Magazine article published during the bull market, about 90% of day traders "are washed up within three months." David Shellenberger of the Massachusetts Securities Division has noted that "Most traders will lose all of their money." A principal of a day-trading firm even admitted that "95% [of day traders] will fail in the first two years."

    The Journal article says the volume is still well below the pre-bear market activity, and that traders seem to be holding onto shares a bit longer than they did three years ago. A USA Today article on the comeback of day trading says today's traders are more disciplined, and most still keep their day jobs. (Both articles say that day traders prefer other labels, such as "active trader" or "semi-professional trader," which is like calling someone with a drinking problem a moderate alcoholic.) "
  2. I heard a lot of shoeshine boys dont make it either....!

    Is that true?

  3. Actually, things have been going much better for me. I think this is my breakaway year. :D

    But I love trading and am not ever going to leave. The predictability and unpredictability of the markets fascinates me. ShoeshineBoy is in for the long haul...
  4. the Motley Fool did their fair share of damage to traders and investors. they liked all those pos internet bubble stocks.
  5. Success in trading in terms of % of people who actually make money is VERY SIMILAR to anyone trying to make it in a pro sport. Most will not make it, that is the nature of the beast. But the ones that pimping!
  6. Hey, wait a minute - I thought trading was easy money?

    Actually, I don't know why most starters think trading will be easy! I guess they've picked up some book from the bull mkt days or something...
  7. All part of the game. How else are the book writers, teachers, coaches, office managers and other going to make money.... ;-)
  8. CalTrader

    CalTrader Guest

    The failure rates are not much greater than other busineses. Here one issue is the barrier: its low bar to get into the business and thus a lot of unprepared people try their hand. Like anything else, if you have the right background and understand what you are doing the odds are much better.

    As for the "Motley Fool" they did about as well as the rest of the internet gold seekers that came into the business to attempt to pick up perceived easy money and generate a quick IPO. Personally I find their columns and advice nearly devoid of valuable content and more like something you would see on a 30 second TV commercial. Just my opinion. I'm sure that some people find their blurbs valuable......
  9. This blurb is so simple that I hesitate to post it here, except that it might help someone who is starting out.

    I will never burn out because I am always hedged.

    Right now I am 80% invested in fixed instruments and I trade with the rest.

    If I make money, I put some of it away and I never lose more in equities than I make in treasury bonds and CD's.

    One doesn't need to be hedged to the extent that I am now. You just need the decipline to not lose more than you make.

    As simple as this strategy is, I have never heard of it asposed by anyone but its made me a money every year.