I asked myself the same question b4 I started trading this is the ultimate reality check and most people doesn't want to face reality. I would think 95% of traders who failed didn't or didn't want to think about the question b4 they start, because the honest answer in 95% of the cases is that they shouldn't trade. \ I think the reasons falls into these three catogories. 1) they are under-capitalized. 2) they don't have a edge. 3) they don't have the commitment. I would be happy to put add to the list if you can think of other reasons, but I would think these are the main reasons people is unsuccessful in trading. To complicate matters more, there is no straight answers to these question. I did a lot of thinking about these issues b4 I started and I am really glad it pay off.
Even 95% would be fine for me, you know why? Let's say the total number of traders is 100 (i.e. 100%). Here is my dream: Say each year has 5 elite traders (the 5%) retiring with more than enough money, and 95 active traders (the 95%) losing some money. Also every year there are 5 newbies started trading, to substitute the retired 5%. Every year I should become more and more experienced (particularly after learning from 9 years' bad experiences). One day in about 10 years time, I would be one of the top 5% elite traders making a lot of money probably in just one year, while the other 95% are all newer than me. Then I will retire, not trading anymore!
Regardless of you and them.... For each individual there is only themselves. It's all about yourself and then there's others. It's the LOVE that you have for yourself. The only LOVE a person get is for yourself and GOD. LOVE is ETERNAL
INDAHOOK is right. Simply because I KNOW I can. I was prepared to do whatever it took and I had basic talent along the lines of trading. To go into an endevour such as trading thinking that you won't be successful is self defeating. Look at all the successful traders who are no smarter than I am. I just decided that if they can I certainly could and did.
While I can't believe I would ever agree with Lobster he has a point.....imagine being able to practice medicine, fly a plane, be a lawyer, etc by only having to plunk down say $25k and "trying it".......a success rate of 10 or 20% would be spectacular in those professions.....but 0% would probably be more like it.
Anything worth doing has a failure rate around 95% or higher. Want to start a business that is really successful? Probably much closer to 99% failure rate. Want to write a great novel? diddo. Want to write a bad novel? Become a military/commercial pilot? Probably less than 3 or 4% reach the commercial license... Run for political office? Become a board certified medical doctor in independent practice? Get a job as a trader at a hedge fund? forgetaboutit.... Become a tenured professor at a 'good' university? 100 pounds overweight? The odds are that if you lose your weight you will regain it. So, it has less to do with money and financial success, it has to do with any change from yesterday. Learn a new language? Play a musical instrument? If you stay in the 'sucky/safe' middle of be bell curve you can be sure of a reasonably nice life. However, if you want to do anything outside the 'roadkill' center expect high odds against you. It is validation that you are on the right track. Humans suck at change of any kind. It amazes me how far we have come in the past 30,000 years.... "As long as you are alive, you get to pick your hell." ramora
That kind of sounds like those letters we all used to get in the mail. "Send one dollar to the 5 names on the top of the list. Send this letter on to 100 people you know. If you do so faithfully someday your name will be on the top of the list. You will then receive $1 million bucks sucker!" lol Or something like that... Trading to me is the most attractive challenge I have ever approached. The profits seem so close, so right there. I have had great months...and some crushing losses. But the losses are when I have mental lapses, when I follow my system things work out very good in a longer term view. The problem is several things with me. My system and its rules up to this point change and evolve. I need to settle on one thing, for the last six months things have settled down and my system is working out well.