Failure Rate of Traders

Discussion in 'Professional Trading' started by monistat7, Oct 15, 2006.

  1. Most people say that 90% of people who trader their own money end up losing money.

    Anyone have any published references for where this statistic comes from?

    After searching the net, I only found one quoted statistic from National American Securities Administrators Association, which said 70% of traders lost money. That study was from 7 years ago when it was like free money in the market.

    I don't doubt that the majority of people lose money trading on their own. But 90% vs 70% is a huge difference. The failure rate of newbies that I have observed at my prop shop over the past 2 years is closer to 70% as well.
  2. They say 90% don’t make money they don’t say 90% lose money. I can see 20% breaking even.
  3. Tuneman


    define trader though, does that include the that buy and sell a little stock here and there?
  4. In the article (from 1999) it said there were fewer than 5000 active daytraders -- wow, even if you add some for the last 7 years.... maybe 20,000 now? I thought there would be like 150K. You guys think that is accurate?
  5. We have come a long way from 1999. Today things are a lot more advanced then they were back then. Technical analysis seems to be pushed a lot more.
  6. The stats are for day traders who do it full time under a series 7. it does not include hedge fund traders or anyone with a longer time frame. It only includes NYSE and NAZ traders. The field has changed so much in 7 years I am not sure if there are 5000 day traders that fit that definition. If you add all markets and people doing it part time I can see it being a lot higher.
  7. Statistics are just a formal way to lie.

    I know lots of traders who were never polled or asked so how is some 90% figure pulled out their butts :).
    It is a generalization based on a review of some nrokers accounts.

    Private hedge funds run by individual traders who are not required to report were never polled I do not think. Was every single trader out there asked to show their account?

    I wish this 90% stat would die already as it is oft quoted and is just an off-based genrealization.

    MOST traders who start out fail because of lack of discipline, skills, knowledge, understanding of risk, sufficient capital, etc.... Is it 90 or 60%.... I aks you..... does it really matter..