Interesting data on trader profitability

Discussion in 'Data Sets and Feeds' started by Maverick74, Oct 7, 2010.

  1. Maverick74


  2. Stupid throwing of unverified data. You must compare the performance of traders to a benchmark index to see who is losing and who is gaining. Someone who has made $5 in two years is not making money due to opportunity cost. If one traded EURUSD with 100K capital and made $50 this year, he is not a winning trader but a big loser because the EUR went up about 10% in the same period. Gains and losses are always measured with respect to a benchmark. Absolute numbers do not mean a thing. If you trade a stock like AAPL and you made $100 in two years paying $1000 commission, you are a huge loser. The stock has made 100% and more in the same period.
  3. Let's use simple probability statistics.

    According to this table, your chances of coming out profitably in a given quarter are on average 29%:

    (33% + 28% + 27% + 28%) / 4 = 29

    Your chances of coming out profitably after a whole year (four profitable quarters in a row) shrink to 0.71%:

    0.29 to the power of 4 = 0.0071

    As a result, 99.29% of traders are not profitable after one year which leads us back to the original conclusion.
  4. Pekelo


    Dude, that was some bad math, and I have only 3rd grade education, still noticed it.

    What your .71% meant was the % of traders profitable in all 4 quarters, not the allover profitability for the year. A trader could have 3 losing quarters and still came out ahead if his 4th quarter was better then the other 3 combined.

    I am glad I could help you....
  5. Correct. That's why I said "four profitable quarters in a row". I'm sad to see your 3rd grade education fail at teaching you proper reading.

  6. Your conclusion is way wrong. What you calculated is the probability of a streak of 4 winning quarters. A trader can have 3 losing quarters and still make money.

    If we assume for simplicity that each quarter yields the same profits on the average, then the break-even is for only

    0.29 x 0.29 = 0.084 or only 8.4% of traders. Hence, 91.6% lose.

    However, this is overly simplistic calculations. But you are way off.
  7. There was an asian study on REAL WORLD results of daytraders.
    And they "opted" not to publish the results as they couldn't find a single profitable daytrader over the years!
  8. intradaybill, you seriously have to take a class on common sense. If you have a rough 30% chance to be profitable in a given quarter, then your chances of consistent profitability obviously shrink with every new period. I assume that this is something you still understand.

    With the numbers given, the sequence of periods is neglected. Why? Because in period 1 it could be Bill earning, in period 2 it's Diana, in period 3 Dave, and in period 4 Henry.

    But what is the chance that you, intradaybill, will have a guaranteed profit? After four quarters it's less than 1%. Whereas if we look at the inverse, on average 71% of people lose each quarter. Your chance of a guaranteed loss is therefore a stunning 25.41% (0.71 to the power of 4). Agreeably, the numbers do not consider the sum of money involved. So it could be as Pekelo mentioned, that small losses are made up with a large gain.

    Conclusion: The further we look into the future, the lower is the chance of intradaybill being consistently profitable. Statistically seen.
  9. Pekelo


    Dude, you are losing it, even a 3rd grader can see it... :)

    Nope, that's not what you said:

    Your chances of coming out profitably after a whole year .... shrink to 0.71%:

    Clear and fine, you were talking about the whole year's profitability. Now you equaled the 2, that was your mistake, my reading comprehension on the 3rd grade level is just fine...

    Read your own fucking posts....Not that it matters but others agree with me... :)
  10. Yes... that's GOVERNMENT math...
    #10     Oct 7, 2010