"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." Thanks for your insight. of course im willing to work hard. Infact I am sitting in my cubicle right now, wondering how I can get out of the cube. There has got to be a better way. I see many people making big $$$ trading. Realistically im just looking for something better for me and the fam. But reading ET, there is so much negative stuff here that would make anyone rething thier venture. I can see how the guys looking for a quick buck would fail. I believe that with anything you get out what you put in. Hard work and educating yourself is the way to success in anything. Glad to finally hear something positive. Thanks!
The 90% myth comes from the U.S. Government and brokers. For example a current case occurred on February 27, 2001, the Securities and Exchange Commission (SEC) approved amendments to National Association of Securities Dealers, Inc. (NASD) Rule 2520 relating to margin requirements for day traders. The NASD amendments to Rule 2520 become effective on September 28, 2001, while the NYSE amendments to Rule 431, which are substantially similar, information memo from NYSE became effective August 27, 2001. These became known as the pattern day trading rule. As part of the hearings at the SEC for pattern day trading (from memory only I could not find the printed record) the brokerages gave testimony about traders abusing margin. They sighted statistically the high trading failure rates (exact number not available but I believe it was in the 80% range) to support their cases for margin rule changes. When traders heard these stats at the time they knew they were flawed because they included accounts of the general public that had gone broke from the internet craze. I have never heard failure rates published for pattern day trader accounts since then. Similar events I believe occurred before the CFTC in prior years.
How do casinos stay open and make a fortune when most all lose? Well there is your answer most all traders lose. Some lose big. Others small. But 99% lose eventually
The Hong Kong exchange sifted records and found that 80% of active retail traders lost money.. maybe Asians are smarter / better traders ??
Over time the figure is likely closer to 100% of all active traders. Not total blow ups but will end up being losers overall over the long term
1 year of consistent trading is harder than working 30 years in a cubicle. lets say you have 100 people all opening a restaurant, do you think they will succeed all? lets say you have 100 people wanting to trade.. what do you think will happen? 90% of people lose because they have no discipline and dont put in hard work or they have no capital, the same reason why over half new restaurants fail. let me put it this way trading is just as hard as opening a new restaurant, maybe even harder. no wonder so many people fail. you gotta approach trading like you're opening a new restaurant.
This also is absurd, any way you slice the definition of "active trader". Think about it. Or maybe you just "believe" this because it makes you feel better about losses you yourself incur? If so, may I suggest quitting trading and getting on with your life? Ultimately, trading, even highly successfully, is just another job, not worth banging one's head over, over and over.