Remove the label and you might get somewhere. As soon as you let yourself be pigeon-holed, when the markets change you will get stuck, or you were never able to get started in the first place. "What we call the beginning is often the end. And to make an end is to make a beginning. The end is where we start from." - T.S. Eliot nitro
Is it true that 70 % of day traders loss money??? On the other hand, 30 % of day traders make money, possibly from those losers.
Keep in mind that 4 out of 5 small businesses fail in the United States during their initial years of operations. This statistic is no different for traders who are effectively a small business. Some past studies have indicated that 10-20% of traders are at least moderately profitable. This means that 80-90% lose money. Trading "businesses" fail for the same reasons as other endeavors... namely: - Lack of adequate capitalization (Burning through your cash / account) - Lack of business planning (no systematic trading plan) - Improper skill set of the owners (the trader needs more education to be successful). Keep it all in mind.... - Greg
You could easily substitute the title of why face off with the odds in daytrading to: why face off with the odds with respect to possible success...applicable to "all small entrepreneurial businesses in general"...all professional actors..sports....etc..etc... The masses in each category mostly speak about: coulda...shouda...woulda...only if.....etc..etc... Thank goodness some people are crazy enough to try... or else no music..movies..hedge fund winners....football...etc.... At least you are not restricted from trying..albeit the probabilities stack up like a horse race...
but imho I think more people put in the work and preparation in other businesses/sports and the like.. and pay their dues.. whereas those attracted to the fast buck image of day trading... do not! I base this partly upon personal anecdotal insight gathered from many conversations through the years with guys who were doing well in their professions/businessess, etc. but perceived that trading (as I was engaged in) would afford them a better lifestyle than facing a drive/commute to work/inter-office politics and the like... and that this "work" would be less... in their minds. One guy stands out...... on a New years' Eve he was at my house, and asked if I (anyone) could trade from Key West or any 'exotic' locale in the world with access. I said sure, and he was envious that he had to actually work for a living (advertising dept. at the Chicago Tribune making over 190K per year + benefits) when he apparently perceived himself lying on a beach... after trading a few hours and making some fast money! He didn't once mention the risks of loss in any conversation about trading for a living (of which we had several). IcE
If 70% lose money,perhaps they should just start doing the opposite(going long when they think they should go short and going short when they think they should go long).Patience is another good virtue to possess when it comes to trading.Searching for perfect setups will lead to better results than overtrading and just paying commissions.
True. Great article today on franchises and how much one can earn and what they need to invest: http://money.cnn.com/2004/04/29/pf/howmuchfranchise/index.htm The revenue figures displayed in this article's chart are BEFORE rent, labor costs, taxes, and other expenses. If you remove rent and labor from these gross estimates your remaining net is not going to be a slam dunk. Even the smallest franchise would receive more thought and prep than most daytraders starting out give trading.
There is no way you will ever be a successful trader with that attitude. Yes, I'm one of the rare traders you wrote about in your post. There are many more out there that make money on a better than average day.