It comes from a human desire to feel more superior than 90% of other people. Nobody has any real clue what percentage of traders make what, so it's just a self-absorbed guess most of the time. It helps not to listen to these people. Whining about percentages will never make anyone money.
#1 - there have been a few research items bouncing around the internet (one was Hong Kong I believe), and they were not promising about how many people were seriously profitable over a long period. #2 - since few people have an outperformance edge, the risks and trading costs will mean almost all people lose, eventually. Think casino. It only takes a 52-48 spread + the fact that people tend to keep gambling to understand why most gamblers manage to lose. #3 - money management. Even if people break even, they tend to sail along until a major market event or mistake blows them up #4 - the Risk of Ruin. Almost without fail, just about everyone will blow up eventually. It just takes time, even for the "good" traders #5 - most of the "traders who win" that people know are either lying, self-deceived, only profitable on paper, profitable for a short time (ane Risk of Ruin has not hit them yet) or only making small profits #6. - It is more like 95%. And almost all the "5%" are only breakeven, making small amounts, etc. Maybe 1% make a living at it for a multi-year period. Don't let the claims on ET fool you. It is a marvelous thing even to make 25-35% for a long time. Consider how few multibillion dollar institutions outperform the market (like, 7-8% ANNUALLY.)
In the 1970's the CFTC studied the accounts of a few retail Commodity companies that went out of business. They discovered that about 70% of the accounts had losing balances.
Trading is an easy business to get into so naturally your going to have a lot of failures. Just think about it for a minute.....what kind of people would start trading? First you have broke lazy people that think they can throw in 5k sit at home, watch TV and just collect money. Then you also have some guy making 200k a year with a family and mortgage. He quits his job and works his ass off and makes 40k his first year trading. He's gonna say F*** this....im working my ass off and not even making a 1/4 of what I made at my corporate job. Most people start trading and MUST make money which typically doesnt happen quickly. The truth is there just isn't many people in the right place and time in their life with capital and mindset to perform well in this business.
The problem here is that the premise of the thread is incorrect. The often quoted phrase is "90% of FUTURES traders lose money" not "90% of ALL traders lose money". To gain valuable insight read the book "The Futures Game: Who Wins, Who Loses, & Why" by Richard J. Teweles.
I am feeling nice so here goes. 90% comes from the fact that most have unrealistic expectations and don't take this business seriously. For those that do and can withstand 6-12 months minimum with no profits while they learn there is a chance for this group. Trading is treated like the latest MLM scheme. Quick bucks and little work. If you are going to take money from others like us, who have been around longer than a few years, you better have a very definable edge and extreme discipline. Are you willing to put in long, boring hours, for no pay for 1 year? Are you passionate about trading or just looking for a quick buck. Get the point? Good luck.
in the mid 80's on the cboe,95% of new traders blew out ,or quit or ran out of cash in 1st year, seat rental was $ 4-5k a month