Why do 95% of retail traders lose?

Discussion in 'Trading' started by fanews, Apr 3, 2011.

  1. fanews


    Why do 90% of people who attempt daytrading the ES lose or quit after 6 months?

    someone told me at least 90% of daytrading accounts close after 6 months after blowing out.

    those are the stats from the broker

    are those stats true. The broker has the stats. but I cannot confirm the stats 90% are losers?

    and the ones who do make money quit after a while...so you will find very few hard core daytraders or traders who've been trading or daytrading for more than 5 years year over year day after day and making 6 figure money every year.. full-time means trading is all they do and no other activities.

    market participants who have other sidebusiness or full time jobs who trade part time are not 'professionals'

    my guess is 90% of market participants don't know what they are doing meaning no trading plan...and no training no edge etc. or just amateurs.

    why do post this thread..
    a good trader like a gambler knows his odds of winning.
    David Sokol said that there was only 5% chance that Berkshire would make buyout offer.

    so newbies have only 5% of making money based on 'estimated' brokerage statistics.

    note: stats aer hearsay,,,not confirmed by brokerages or wall street firms.

    don't be another statistic.

    another there a are lies and there are damn statistics.
  2. 1. Your odds of winning are always one in two.
    2. The ES is too strong an instument, meaning traders attempt it undercapitalized.
    3. Traders are not gamblers.
    4. What you are actually trading is not price, but people.
    5. Develop a plane to understand what people are likely to do relation to the price point where your instrument currently stands, and you will do quite well.
  3. You either never trade ES or you attend too many seminars or BS trading course organised by losers type of traders, or you are from broker or market making business where your sole of purpose is to coach as many people as possible to trade(aka owner for the casino )

    You can't win in SHORT TERM trade in ES,the odd of loss is in your side- you loss TWO ticks PLUS commission in EACH trade. Similar to roulette game in casino.
  4. cornix


    Assuming that most people coming to trading business treat it as gambling or a way to get rich quick, I am amazed that only 90% lose... It seems to me that % of winners should be way smaller than 10%.
  5. The 10% winner include broker and market maker (or HFT in this day). The "actual" winner for retail is < 1%, and most of them trade using some kind of "edge" - and believe or not, most of those edge are either a market loop hole (which will not last long)or illegal stuff ..
  6. cornix


    Yup, less than 1% success rate among retail wannabe traders sounds much more realistic for derivatives etc.

    In longer term stock plays (mostly buy & hold) I think, that % can be higher, but that is more investing than speculation.
  7. So the other 5%, brokerage, and exchange can win. :D
  8. Yup. Brokatage & Exchange, market maker (or HFT in thhis day) always in the odd side to win. Same as the owner of the casino.

    Recall for ES - you loss immediately TWO ticks PLUS commision when you enter any trade, if you are aiming of 30 ticks win/loss ratio, you are actually in the worse situation than playing roulette in casino.

    Don't come back and tell me some BS TA that will add your odd to win by looking at longer time period (pivot, reverse, momentum, break out and so on) and hence larger range(e.g. 200 ticks ++ or so that slippage and com become insignificant) to cover the "cost" for the trade. If this can be done, the firm I worked before (can't tell who is it, but there are the biggest and not hard to guess) already did and exploit it , and it is no point for them to spend hundred of millions just to develop the HFT to make only one of two ticks profit. Clear ?
  9. 1.Your odds of winning remain one in two.
    2. I did not mention anywhere in my five points anything about time frames.
    3. I stated clearly that most traders who attempt ES are undercapitalized. A 5-1 ratio should be used, i.e. if you can trade five contracts on max margin, you should trade one, and this is a minimum. Ideal would be 20- 4 ratio so scaling in can be done under certain conditions.
    4. Civil discourse is a mark of good parents and a certain degree of education, you should try it, if you are able.
  10. Really ?
    After you pay for the slippage and commision ?

    #10     Apr 3, 2011