What % of traders really make money?

Discussion in 'Trading' started by baggerlord, Jul 5, 2007.

  1. Hi. I have been interested in trading for like 5 years now. I play poker for a living, and am starting to have some extra money and may try again. Past attempts have gone badly. I am starting to notice something somewhat disturbing though. I am somewhat connected in the poker community, enough to know that there are a lot of guys making a lot of money at poker, week after week and year after year.

    Trading doesn't seem to be the case. It seems to have a MUCH lower success rate. I have lurked these forums for about 5 years I think, and don't see too many of the same people around. I almost never see success stories, and everyone on here just seems to be trying to figure out something that works.

    This is in strong contrast to poker, where tons of people post graphs of their winnings every month.

    So my question is, where are the consistant winners? Is trading so hard that there are only a few, and most of them are the quiet type that don't post results, brag etc...? I know in poker most players are arrogant, like to brag, and are quick to post a good day/week/year's numbers. I doubt traders are too different.

    So come on, tell me a success story to encourage me to keep my interest in trading.
  2. All of them make money.

    A significant number of them just do not know how to keep the money.

    Risk and portfolio management...
  3. Do you play online, or do you live in Vegas?
  4. insert


    don't even bother you are not smart enough

    think about it, do you FEEL smart, well do you punk.

    If you FEEL very smart, you are probably not but its an important first step


  5. I'm a trader

    I'll 'complete' the trade when I sell my big profits in rimm, aapl, and ma later

  6. I play online. To the "feel smart" guy. I am what I am, nothing too special, but I have a good mind for risk/reward etc... Your response is the typical vague reply from someone that acts like they make money and know what they are talking about, but is probably a breakeven/loser. Not a personal knock, just what I have noticed on elitetrader. I am interested in the details and numbers, not generalized words of wisdom.
  7. jessie


    My own experience is that a lot of people make money at first, and the percentages diminish over time, just as statistically you would expect. But, many thousands of people open trading accounts, so there are still quite a few people left who are consistently making money. I have read stats that 5% or 10% "make money", but the time frames always seem vague. In my experience, certainly no more than 10% of people who start trading will make it for 5 years. That is due to a lot of factors, but the most important ones in my experience are discipline and patience.

    There is also a learning curve, just as with anything else, and I think that it is probably not that different from that of the average "off the street" poker player. How many people who play their first poker hand at Mohegan Sun casino end up walking away from the tables for 5 years as consistent winners, and what did they do to accomplish it??? Most people who begin trading do not treat is as a business, have a strong tendency to tremendously overtrade, ride losers, go "all in" on nothing more than hunches (As a pro, think about how many hands you actually play out vs. fold...), and generally take risks that professionals wouldn't dream of taking. I am usually horrified when I hear the position sizes and leverage of most new traders, and whenever I see someone shopping for the firm that will let them open the largest position possible with $XX.00, I know that they won't be around long.

    In my experience, there are really two distinct groups of novice traders, and to pool them is comparing apples and oranges. There are the "dabblers" who are drawn to trading because they expect or hope to get rich quickly and easily (by far the majority of new traders), and the others, who recognize that it is a business like any other, which requires study, hard work, patience, and a few years of experience to succeed. The people I know who DO treat it as a business, have a sound plan, iron discipline and good risk management, and a basic understanding of probabilities and statistics, generally fare MUCH better, and often DO make it.

    Longwinded, I know, but if you have what it takes to be a poker pro over the long haul, I think you would find the trading business very similar, and would certainly have a major leg-up on most beginners.
    Good trading!
  8. What will you do with all that whopping money?!?! :confused: What is it now, $115k?!! Oh man, I hope you don't force every short in the world to cover with all that liquidity you're going to pump into the markets! :p :p :p

    Don't forget to keep $250 in cash so you can finally step up to a 19" monitor! :D
  9. I lost my daytrading edge about 3 years ago and have been trying to get it back ever since. So I joined a group of daytraders on meetup.com. None of them knew their ass from a hole in the ground about daytrading and the guy who started the group was a con artist.
    The whole experience was a waste of time.

    I started trading 14 years ago, even without ever reading a book about it or having a computer for the first 6 years and was consistently profitable trading treasury bonds and closed end funds.

    In 1999 I bought my first computer and started swing trading and then daytrading and was profitable until 20004. During that time I was a member of the Niederhoffer 100 which also turned out to be a waste of time as well because no one would provide any worthwhile information.

    On July 4, cnbc had a show about Warren buffet and what a great trader/investor he is. So I checked big charts and noticed that his fund lost 50% between 1998 and 2001 when I was making money.LOL

    So now I still don't know what the percentage of consistently profitable traders is to the total is and I probably never will.
  10. gaj


    here's my comparison to poker, and i'm only decent in hold'em SNGs ($10/20, i get a 17% ROI). don't play cash well, can do ok in omaha,

    if you're playing the $1/2 NL tables, or the $10/20 limits ,you can do ok. it takes time, and discipline, and ability NOT to spend your winnings on the craps / blackjack tables. and you can make that a career, and slowly move up higher. competition gets tougher, of course. and once you get up to super high levels, there's less fish to gobble up so you have to go against the best. and keep some level of humility, because once you think you're rolling over everyone, someone will play possum and bust you.

    well, trading is like that as well. if you've got a good couple patterns, don't break out and start trading others just 'because'. it's much easier for an individual to buy 100, 200, 500, 1000 shares than it is for a fund to buy millions of shares; your small buy doesn't move the market, the big one DOES. the big players put their performance vs the s&p; if i did the s&p for 3 years in a row, i'd have to quit trading because it wouldn't be enough money.

    then again, i'm not living in a palatial mansion in connecticut. or las vegas.

    that's not a direct answer to your first question, but i've found much of the emotions and psychology involved with trading also applies to poker, or vice versa.

    also....i feel more comfortable in my particular kind of trading than in poker. and, my favorite part - if you're in a poker hand, you can only buy insurance under unfavorable terms, or you'll get sucked out on and take a big hit. but in a stock, if you've got the 'perfect' setup, and it doesn't work? yo're stopped out a little away from where it happened. it could be a 75% play, and if it doesn't happen, you don't take as big a hit.
    #10     Jul 5, 2007