I often hear that much more traders lose money than make money? Is this really the mentality? It seems hard to believe considering the huge advantage we have over the institutions. It's just so much easier for a small trader to get in and out of positions and manage a small portfolio. Does anyone have any realistic estimates of what percentage of traders actually make money consistently?
from reading ET my estimates: 90% market participants (individuals) who trade frequently lose money over a period of 1 year or sooner, 9% make $, 1% can live from trading.
There was a report from 2004 where a firm that handles trader tax returns showed that out of 1000 traders, 36 % were profitable BUT only 4 % made over 50 k from trading.
most of the 4% were probably acting on inside information. that's how it works in the trading world. if you're not inside, you're outside.
I believe if you trade frequently you have more odds losing money than profitting. That's by definition so. If you trade and made money, you are merely taking money from pockets of other fellow traders. So there will always be more losers than winners. For an average person, I guess the only way to make money is spend your time do your due diligence, and then invest for long term, stick to your fundamental analysis. Most billionaires made money this way. It's a well proven and well defined approach, but it is also an approach that most people will NOT follow. It way much easier to just print out a chart and then grab a ruler to draw some straight lines on the chart that absolutely means nothing, than to spend hard working hours digging out and digest information.
I quite agree with volente. I don't know why there would be such a high rate of failure. Commissions/ fees necessarily make it negative expectation , but not 90/10 ... And if you're reading ET or another forum, you're already outside of the losing core of retired person lucky enough to understand how their platform works and about to give back the revenues of their successful prior business ventures...
Its amazing how the losers in trading always know why they're going nowhere. Conspiracy victim, manipulated, at a trading disadvantage, kept in the dark, or fill in your own favorite excuse. The information - inside, outside, onside, offside, upside, downside - is always all there on the live chart in front of you. :eek:
That is a good assessment, except a lot of those 9% break near even, not make money. But the 1% of those who live from it sounds proper. But the lemmings keep coming in, and some ET dreamers keep claiming you will get there, if you just keep plugging away. Futures trading is a delusional fantasy, wrapped in schizophrenic megalomania, and propelled by a mixture of self-deception and public drunkenness using funhouse mirrors as your compass. Most of those who are successful in the short run, trip over luck and mild-mannered market conditions.
<i>"Futures trading is a delusional fantasy, wrapped in schizophrenic megalomania, and propelled by a mixture of self-deception and public drunkenness using funhouse mirrors as your compass. Most of those who are successful in the short run, trip over luck and mild-mannered market conditions."</i> This from someone who months ago professed to be highly profitable taking one ES trade per day using technical analysis of price action? Interesting change of heart * Now let me ask this: what of the buy & hold investors who bought index or quasi-index funds in early 2007 or even 2005? If you bought the Dow, S&P 500 or Small Cap indexes and held thru two - three years of a glory run, where is your portfolio balance now? What did buy & hold get for that entire artificial ramp? Nothing, nadda, zippo. Portfolio is right back to par or even red in some cases. Opportunity cost from fixed income is additional loss. Trading works for those who master this highly difficult = high paying profession. Buy & hold works thru some periods of time, but not all.