Trading is just like any other business, only minority becomes very successful. How many millionaire restaurant owners do you know for example? There are many ways to extract large sums of money from markets, unfortunately too many do not stick around long enough to make it. Or just burn their initial stake too quickly and then cry that there is not way to profit from trading. As far as buy and hold goes, you can only make serious money there if you start with decent stake. No doubt that over 30 years you will be ahead, but do not forget that there is a good chance that $ will be worth much less.
I think the success rate numbers thrown around here are very misleading. It needs to be broken down further to look at amount of capital/funding. Those number are probably accurate for people with a low (less than $25k) of funding versus those with much higher funding, in my opinion. I think Don has alluded to this in the past regarding the average longevity of members of his firm.
NO IT NEEDS TO BE BRONKEN DOWN TO NUMBER OF YEARS SPENT TRADING THE SAME OR ALMOST THE SAME STRATEGY. 90% might be losers in the first year, but i guarantee you that the percentage is much much lower in the case of traders trading for 5years+. Cheers ...and stop the bullshit!
I've only been trading for a couple years now. I was break even the first year just trying to get a feel for how markets work. and not lose money. I was up and down throughout the year +_10% and ended down about 1%. The next year I lost 1/3 of my account on a bad trade, anyone remember NEW and NEWC, LOL. This was awake up to me to focus on risk management. I did pretty well the rest of the year and ended up 20% This year I am focusing on a small baskets of stocks i like to trade, in a select few industry groups. These are companies I am long term bullish on, and then I buying at really good prices when they happen and selling on news. So far so good! I often watch these companies drift lower on low volume and this generates great buying opportunities in this market. Trading is not what i do for a living, more of a hobby, and so far it has not seemed as hard as what alot of traders imply, and when I look at the advantages we have as traders compared to other money in the market, its hard to not think that a higher percentage would be successful.
when I look at the advantages we have as traders compared to other money in the market Could you please point out what those advantages are?
I will rate what I feel my top advantages are. I am comparing what i feel a small trader/investor has going for him compared to a instituitional money or long term buy an hold everybodies. This applies to small account sizes. I trade with 2:1 margin on $20k. You may disagree but certainly individual equity position sizes of less than $15,000 can be considered small. #1 Small Position Size: flexibility to get in and out of positions faster and at better prices. If think many traders would agree it is much easier to generate a huge return with less risk on a small account size. #2 Risk Management: ability to manage risk for my entire portfolio very quickly. #3 Opportunity Advantage: We may not be able to manipulate prices but we can take advantage of others inabilitity to be as flexible. #4 Full Control: Being independent we can look at the entire universe of stocks and decide on our actions. We report and answer only to ourselves. This gives liberty and flexibility. So most of this comes back to the benefits of having a small acount size. But this can be scaled up to an extent that each is able to be aware and closely follow their positions and manage rosk effectively. Keep it rolling....