I was talking about the markets with some family and my cousin told me he wants to be a trader..He follows the markets and just finished college..I told him to considr an anaysts job as the universe of traders needed in society is at overcapacity... he has an engineering degree and has succeeded in many things in life...I told him that he needs to know that the odds are against him and to think about how money is really made in the business.. 9 out of every 10 people who try to be professional traders, who aren't market making, will fail and if they are risking their own money they will lose it all...the 1 out of 10 will become very rich..and he needs new traders to come into his market every year so he can take their money..so I ask all the parties involved..who benefits the most when some guy with a lot of money decides he wants to be a professional trader... suckers......
try being a trader for 2 years and then if you succeed, continue. if you do not succeed, try becoming an analyst. it's not like you get put to death for not trading profitably.
This is because of the low barriers to entry. Other professions have barriers to entry like advanced degrees and certifications, etc. law school and bar exam, med school, etc. Trading has no barriers to entry - anyone can attempt o trade if they have $500 to fund an account. Thus the majority of participants are way below the bar and exist simply to enhance the functionality and froth in the market. This is tangentially related to the "ego" of the avg trader and the competitiveness of the business. Most guys think they are smarter, more savvy, or just more insightful / harder workeing than other traders. Without this competitive edge, traders wouldnt believe that they are the 1 out of every 10 new traders who will conclude his trading career deep in the black. Without those 9 other guys there's no money for the 1 guy, hence no market. I think I'm that 1 out of 10 guy, as I'm sure you do as well, err... did.
that or you just don't believe in the 9/10 so called statistic, based on what study I have no clue--if it even exists, it would probably be laughable if held to academic standards. (i'm only saying this because the "study" i've heard of is from some tax accounting company that surveyed their retail clients. I've never heard of an actual study done...and i don't think its coming out anytime soon...what would be the point...we all pretty much know the majority don't make it, although 9/10 sounds a lot worse then 3/4) I'm sure theres a lot of anecdotal evidence to support this 9/10 saying, but somebody better prove it to me year after year before i start drinking the purple koolaid. although after talking to joeyata, and he's been around enough to know, 9/10 might be a little generous if you push the time out to 5-10 years, instead of how many traders are gone in a year. My point is there is absolutely no point in dwelling on something that a) hasn't been formally studied as fact, b) changes all the damn time; there have to be some years better then others...like the dot.com as an extreme c) isn't such a happy thought. additionally, how much crazy bullshit do you hear from unhappy/losing traders anyways. Throw a number/percentage in there and now its something to believe? Absolutely not. Even if it were true, its such a discouraging thought. If I said, "hey steve, think you'll be around in 5-10 years? Someone says the odds are against you, what do you think?" If he wasn't such a nice guy, it might go something like this: "fuck off" Trading is hard enough with or without these sayings.
it is funny..the brokers don't want anyone to believe this..$5,000 deposit they get your commissions...you lose it all to a 1 out of 10...another 1,000 guys deposit $5,000 and 9 of them lose it all ..more commissions and the 1 out of 10's get richer... suckers..
tell me, say my rate is at .008, i do 1000-1500 shares per day, with 25x bp my deposit with equivalent overnight, and pay no software fee. Exactly what do you think they are making on me? what exactly are they going to make on me when i hold slb while it runs up/down 5 pt on 100 shares. if you churn yourself, who's fault is that? Good scalpers don't churn themselves. Good position traders don't nth tuple down. Good pair traders don't reach max pain on their 3rd add. This is all about you. Its got nothing to do with anyone else. not the specialist, your manager, or any other copout. ( there is a guy in my office who, every single day complains about the gs specialist. The gs specialist doesn't fuck you out of 3 pts a day. You can bitch about something when you get filled 10 cents-1 pt lower on some crazy spread. Sure. But on a daily basis....for that much heat. Its ridiculous and its a copout.