motely fool says 95% onfday traders out in 6 months

Discussion in 'Professional Trading' started by stockripper, Sep 13, 2005.

  1. they had big article in sundays paper 95% of day traders blown out in 6 months or less and onlyt about 3% of the origianl 100 make it a year
  2. Makes total sense to me. I think the lack of good, solid training (a mentor who takes you under their wing) (not churning gimmicks) coupled with the time it takes to really learn on your own.

    What I have found in this business is that it simply takes time to learn what doesnt work, b/4 you find what does. And that can take years.

    But most people overtrade and trade too large size right off the bat.
    Also, many people simply cant afford to not make $$ so the pressure they feel just makes things worse, and can create a panic situation.

    If more people had 2+ years of time to research and use a sim, and were really dedicated, the # of successful traders would probably jump to 25%....

    I genuinly think most people wont put into or cant the amount of time it takes, and throw in the towel..
  3. And they are absolutely correct.

    Ofcourse every trader ignores this and instead believes they will be part of the 1% that will make big $$$.
  4. mahras2


    That is correct not because of experience, not because of anything anyone SAYS! Its because this is how the game is MADE. There can ONLY be a SMALL group of profitable traders fed by a VERY LARGE group of losers. Among this SMALL group are the hedge funds and other very large entities which form a very large chunk of the pie leaving the profitable retailers with the crumbs.

    This is how the game is made so of course that will be the number. I dont find this surprising and if any individual does, than well there is no easy way to say it but s/he is probably a part of the losers.


    in january of 2002 I saw hundreds of Naz traders became unprofitable. It was if a bunch of black boxes got turned on overnight.

    Everyone rushed to the NYSE using ARCA to hit regionals/read the tape to catch turns. The NYSE hybrid model could wipe out 1000's of NYSE scalpers in 2006. The transparancy will be no better than nazcrap soon
  6. Yes. Add up all the profits from GS, ML and all the other brokers, software provider, etc., billions and billions, and ask yourself where all that money comes from.
  7. Listening to them it is undoubtedly sure to occur, sometimes even faster. Maybe one day.
  8. SteveD


    These are the primary reasons, IMHO:

    Not enough capital

    No business plan

    No business experience

    Live outside US

    Look at a Franchise Magazine and see the large amount of capital that is REQUIRED to buy a franchise. Most well over $50,000.

    They then provide a "seasoned" business plan or model, along with financial discipline, bookkeeping etc etc

    The Franchise industry has a fairly high success rate among established companies.

    Now, along comes the "daytrader" with $7,500 in capital and decides to open a hamburger stand. He doesn't need anyone to tell him how to cook burgers, LOL. He, of course, knows nothing of financial planning regarding rent, utilities, cost of goods, employees etc etc. He goes bust after 6 months if he is lucky.

    The older and wiser guy rounds up $250,000, buys a McDonalds, works 18 hour days, follows the McD business plan, stays disciplined and makes a very nice living.

    There is absolutely no barrier to entry in this business.

  9. that sounds too optomistic, that was the number before volatility collapsed. on second thought....maybe that is right....the volatility contraction might be keeping people in the game a few months longer after all.

  10. Boib


    So what is the answer. There seems to be hundreds of vendors out there that want hundreds if not thousands of dollars to teach me to trade.

    I can also subscribe to any number of tip sheets that scan the market, pick stocks and tell me what to buy and when.

    Someone takes these courses and subscribes to these newsletters. Are these the 3% that make it? I personally doubt it. Trading to me seems to be more about discipline, money management and managing your emotions than it is about chart patterns, setups or deciphering a level II screen.

    I agree that a mentor would be nice but where to find one? Is anyone aware of a site that rates the different courses and seminars that are available?

    It seem reasonable that I would need more training than reading a few books or watching a training video but where do I start.
    #10     Sep 13, 2005