Well, it depends...if you're trading for a living, then you're likely to use a consistent, "safer" (that doesn't mean easier!) method such as scalping where you aim for small profits which add up at the end of the day. On the other side, investors or position traders which don't make their livings exclusively off the financial markets (that is, those who use the markets as a secondary income source) may be more focused on scoring big rather than on being consistent in a daily-weekly basis. In that case, those "big" home runs aren't anomalies, they are just how they play the game.
This is quite possibly the most logical and rational explanation to the OP's question. It mathematically makes sense.
I wonder why people focuses on debating about how many people win and how many people lose rather than focusing on making money.
here we have a guy claiming to be in market wizards and trades using pyschic ability. But you call me crazy? Delusions run very deep in this business. No wonder most all lose and wallstreet is soooiooo rich!
The question I would ask is what percentage of traders make money that survive the learning curve. The learning curve is very steep in the first couple of years. Most people blow out and give up in this period. If a trader puts in enough screen time ,learns from his mistakes and can afford the draw downs that happen when learning,he will start to make money at a certain point and never look back.
yes true. But remember it takes double returns to get back to even after blow out. So I still say most lose overall. 99%
Don't forget talent/intelligence. I hear a lot of people say 'if you work hard and have a good system and solid money management etc. etc.' Well the truth is, most people don't manage their money well, and even less can develop an edge. Most people are just not smart enough to beat the market, no matter how hard they try. There is no 'learning curve' if even at your max potential you won't be a winner. Most are never going to be profitable, and the traders that do have an edge will get more and more money from the guys who don't. I think the real wealth distribution is kind of like a pyramid, with a lot(~80%) of losing traders each with small amounts of money, a few breakeven(15%) traders, and then at the very top(5%) there's the guys that are making a lot. Oh and of course the brokerages make more than anyone =]
"5% making a lot" is VERY generous. I would say it is more like 90-95% losing money, most of the rest break even/make small amounts/have made a lot for a short time (as most ET self-acclaimed successful traders are). I would say perhaps 0.3-1% "make a lot."
Unless you are referring only to unleveraged traders this isn't true. A new traders "tuition" could be $10-20k. Once a trader knows what they are doing you can make what you lost back in one good day. There are a lot of good traders out there making big $ every month, supporting families, funding college tuitions etc. If you had learned to treat trading as a business rather than a hobby you would be on the other side of the fence.
well. There are a few but there is not alot. It's very rare that anyone gets rich trading but it does happen for sure or even makes a living for that matter