ok, so the thought experiment came to me over the weekend, thinking about VC investments (those who burn cash fastest try to earn it back on "market valuations") and reverse psychology and the Parasite movie which i'd watched on the plane (the one from 2019 which won best picture, i can see how it mirrors the zeitgeist) you know how most people don't make much money even when they try so hard? eg. most traders lose when they try so hard to make $$ trading? what happens if they make it a game where they "try" to lose $$? eg. instead of having the "goal" of growing an account from $X, they try to LOSE the whole wad, as fast as possible? before you say, "isn't that what they're doing at r/wallstreetbets" LOL, i think those options guys are either/ some combination of: - very rich, and can thus be so nonchalant in essentially playing $100k hands of poker on their personal cash, burning through their bankroll - very young, with early access to their trust funds which they'll surely squander - very desperate for attention, that they'll take such random throws of the dice/ earnings plays for social media clout - very good at photoshop but let's say for pure FX, futures, stocks, etc if ppl are given free reins to trade however they want, with the stated objective of "losing" the whole account (first down to 0 wins) as fast as possible, what do you reckon would happen? - would they still lose $$ - or would they paradoxically make $$ (kinda ironic) has anyone tried doing this by playing on demos? keen to hear your stories
When they 'try' to lose $$$$, or if they do revenge trading, then they lose even more $$$$$$$$$$$$$$$$$$$$.
The ever most repeated sentence : "most people lose at trading" is not quite true. At least with brokers that don't trade against you. These are reports from interactive brokers on their FX accounts: https://www.interactivebrokers.com/en/general/about/performanceCustomerForex.php You can visit this page every quarter. Regarding the question about losing money on purpose, that would be quite easy, just prepare two limit orders, one to buy on top of the ask and another one to sell below the bid. Rinse and repeat. You will see your account slowly draining to 0.
Interesting link, but. But on the second hand, someone from 90/90/90 club could be considered as someone from ,,Percentage of Unprofitable Accounts'' and someone from beginners luck club could be counted as ,,Percentage of Profitable Accounts", thus i wouldn't rely on this data too much. Especially, retail, FX. 50% profitable accounts. (wink) And if they were profitable, then, how big-were those profits ? Besides, maybe those were the losers of the previous quarter. Nonetheless, great to see such data.
I think the main issue here is that people see those banners at CFDs coinshops and crypto exchanges and think that is the standard. It is true that 90% of their customers lose money, that's why they are forced to show the banner, but it is because they trade against you, stop hunting and payment for other flow to institutions are their primary businesses. But that is not the standard with regular trading, FX and stocks are quite different, the BBO price is there for a reason. It would be interesting if someone could chip in with another source for the performance of retail traders, then we can compare.
India reports percentage of traders who make money each year. In 2022 Number of F&O traders 4.57 million Losers 89% Average loss US ~$1500 per year Winner 11% Average profit US ~$2000 per year The top 1 percent takes 51% of the total net profit. The top 5 percent take 75% of the total net profit. Here is the link if anyone is intrested. https://www.sebi.gov.in/reports-and...rs-dealing-in-equity-fando-segment_67525.html
It would be beneficial to analyze how those losers lose. Is it because they have a canny foresight into future prices (but then the wrong way)? Or is it more likely they lose because of over-trading without an edge while paying commissions and bid ask spread, or they gamble too big positions relative to their account?
If you’re trading «noise» with small/moderate stops as many do, I’m sure the outcome will not be very different if you reverse your entries.