The losers

Discussion in 'Trading' started by drasfs, Jun 20, 2007.

  1. drasfs


    How many percent of traders lose money while trading stocks? Is there any well known number?

    I've only read a survey that showed that 90% of "day"traders lose money.
  2. thats probably correct..just like 90% of all retauramts go out of business the first year.
  3. All of those statistics are questionable though.

    If you take the "9 out of 10 businesses go out of business within 5 years" or whatever it is statistic that is so often spouted, they don't actually even count a parnership that turns into a corporation or a something such as that.

    Many statistics have huge holes in them...just as the CPI doesn't measure shit that matters. Take them at face value. You might be able to measure using what percentage of accounts that are flagged as pattern day trade accounts end up being closed...but then again, if you go to another broker you could be mis-counted.

    I think that's a tough one to measure.
  4. Pareto principle, 80/20, is a close approximation for a lot of "things" in human endeavors.
  5. Tuke


    I've lost a little money in the markets. If you get 8 more responses like mine and one person says they're up for the year then I guess the claim is substantiated.

  6. take it another step, for 8/10 or 9/10 that lose $x, the 1 or 2 out of ten winners make $10*x likely. A very steep bell curve of profitability.
  7. I've talked to guy's who run futures brokerage firms and they'll tell you the fail rate is north of 95%.

    Just look at it mathematically. If one's outcome is purely random (I know, I know, your trading style has an edge. But besides you, the other mere mortals have a 3% "chance of doubling their money 5 times without blowing out. Now throw in commissions.

    Trading success is linked to capital and position sizing.

    IMO, most small traders have it backwards. It's easier to hit home runs than slap together 3000 days of singles.

    I'm certainly a scalping fool much of the time so I know the dynamics. For one, scalping seems less risky. As if bleeding month after month on a bunch of failed 5 minute breakouts or cci/macd divergences is better than blowing your stake on one trade. Another weird conception is traders believe the market will let them win if they keep looking for small gains. Yet most small traders pick the most tick fucked market on earth to trade, the E-Mini S&P. How frickin' imaginative. Now there's an edge, lol.

    I suggest you all read Curtis Faith's book, Way of the Turtle.

    Hey inflector, I'm pluggin' you all around here.......
  8. faure


    Even if you don't believe the stats; simple common sense will tell you the easier the barriers to entry, the higher the failure rate.
  9. Curious choice of words and phrases...
  10. I was only speaking in proportions, not the underlying quality.. CBOE is probably 90/10. And.............stemming from writing naked calls.

    Yes, it takes a LOT of "losers" to feed consistent 7 figure accounts. Fortunately there are new ones minted each day by just virtue of population growth. Stated another way, P.T. Barnum was right.
    #10     Jun 20, 2007