In 1998-99 broadway trading in miami had 90- 100% of their traders making absurd amounts of money......theyve all since disapeared.
How does one calculate the percentage of losing traders, assuming all of the data is in hand? For example, let's assume the following history for a prop firm: Year 1: The firm opens. 100 traders begin trading. 90 fail miserably and go away. Ten have some level of success and continue trading with the firm. Year 2: In addition to the 10 net profitable traders from the prior year, another 100 new green rookie traders join the firm. Of the rookie traders, 90 fail miserably and 10 have some level of success and continue trading. Year 3: In addition to the 20 net profitable traders from the prior year, another 100 new green rookie traders join the firm. Of the rookie traders, 90 fail miserably, while 10 have some level of success and continue trading. etc, etc, etc Year 9: In addition to the 80 net profitable traders from the prior year, another 100 new green rookie traders join the firm. Of the rookie traders, 90 fail miserably, while 10 have some level of success and continue trading. So, the question is: "What percentage of traders actually lose money?" => In Year 9, one might conclude that 50% of all traders are profitable (80 experienced traders + 10 rookie traders made money while 90 rookie traders failed). However, someone could also look at all of the data for the firm and see clearly that 90% of all traders that came into the firm lost money. Obviously, this is a simple example, but I suspect most people looking at all the data would say that 90% of all traders lose money, not 50%.
The successful traders in the house are making more than $20K per month. They are not considered "small traders." There is barrier to entry to become a successful traders. http://www.elitetrader.com/vb/showthread.php?s=&threadid=228628 read the entire thread from page 1 -8 Higher education is the key to become a successful traders. The degrees to become a succuessful traders are: -Math -Computer Science - Minor Financial Math Those degrees will land a job in the house on the first year and work their way up. Small Traders look for short cut. They don't want to get Higher Educated but subscribe 3rd party vendors thinking they have the holy grail. Too bad they are losing. Just too bad
I've had some success in some "elite" military programs and schools. One in particular has a 90% failure and quit rate. I would estimate that of those that were qualified to be there and were committed to finishing, the pass rate was well over 60%. The bulk of the failures guaranteed they would fail before they even began. I wouldn't be surprised if trading is the same especially after reading many journals on et over the years.
probably one of the better indicator of long term survival, is ET itself and active membership. This site has been around for a long time, yet something I noticed all the recent posters have registered very recently, 2010, 2011,2009, geez a poster registered in 2001 is almost an anomaly. I think it does tell you something even though many ET poster must stop posting or reduce actvity after a while simply because of the futility and nastiness of many discussions . RE emg: degrees to become succesful , I do not consider Wall Street/ institutional traders as being part of the same profession. For the most part , we don't do the same thing , you can't compare, if anything the failure rate for them relates more to factors existing in many other occcupations, not to pure trading skills. It's well known that many institutional traders couldn't trade their way out of a paper bag if they were on their own. Otherwise why the hell would you keep working in a high rise building after having made 10 millions in a few years, you could move to the Bahamas and trade your own account. None of these guys does that , and it not just because "they want more", it's because they know it would be a lot more difficult.
My posts and trades in 2003 fit that pattern. Sadly one of the big lessons I learned is that I can't successfuly trade in my current position. I do get some satisfaction from the fact that in my last account I was able to daytrade profitably for about a year.
Trading is a Career Professional. Many small traders want to become a full time traders. However, there 2 paths, Traders vs Gamblers If this small traders do not want to get higher educated, he can become a gambler. There is no barrier to entry to become a full time gambler. Look around. Go to those trading convention. All these small traders think subscribing 3rd party vendors will get to become a full time successful traders. Small traders do crazy shit. they are crazy!!
Actually there are more longtimers here than you might think. A lot of us have retired aliases and come back after a leave. One thing you will find is that there are only so many ways to trade. After awhile the same threads keep popping up, asking the same questions. I think there are a good deal of good traders out there, but let's face it, making money in this way is not considered legit to the working Joe, who will outnumber you 100 to 1. Traders who figure it out will go underground. If you get good at this business expect envy before admiration. I say this as I am nowhere near where I want to be, but I am no longer a losing trader. I know it is a matter of size for me now. When I am throwing around risk to the tune of five or six hundred bucks a pip, I will be more low key than ever.