Why do more than 90% of traders lose?

Discussion in 'Trading' started by emg, Apr 8, 2011.

  1. Handle123

    Handle123

    Many years ago, I would fly into Vegas each weekend, I "gambled" like it was a business, just like trading. You develop a skill or a plan, I played wherever casinos had one deck shoes, just me and the dealer very late at night. I had set bets, but when I knew the deck was heavy in face cards, I increased my bets. I never became a hog or overstayed my welcome, I only played during certain hours, very disiplined. Once I got the hang of it, never had losing weekends, some breakeven though. I never stayed long enough at a casino to get comp rooms as they are handed out to those who lose consistently.

    I have friends who gamble for a living who live in Vegas, play video poker or poker games, they never have losing years, whether it is gambling or trading, one has to master skills and themselves to succeed and those who don't have the skills is our profits.

    Only people who get ripped off is themselves cause of lack of education. There is always something else you can get better at, if you get good at reading the charts, start learning how to read the Dome and volume, try getting that extra tic, to many, extra tic is hardly worth the effort, but a ten lot or 100, it is.

    I had brain surgery twice last year, I made sure doctors were highly skilled and been doing it many years and not just graduated out of med school yesterday. trading is the same, more skilled you are, you business does well, if you are a newbie and open an account to start trading, you are bait.
     
    #11     Apr 8, 2011
    Trader8668 and masterm1ne like this.
  2. Shagi

    Shagi

    I don't why emg keeps on humming and drumming about failure rate of traders.

    There is nothing unique about start up traders failure rate - its same statistics with any other entrepreneural business start-ups - noone gets hung up about it.

    Why continue being consistently negative. Let the noobs try who knows what could happen, all self-made sucessfull traders also started out as noobs losing money consistently.

    The personal attributes that build and make succesful traders are probably no differeent to other attributes that make entrepreneurs successful in other business activities.
     
    #12     Apr 8, 2011
  3. Pekelo

    Pekelo

    Sure. But how many newbie would sign up if the ads were saying:

    "You most likely will lose, and it will take years to get profitable, and you can forget about making a living. But come and try!" :)
     
    #13     Apr 8, 2011
  4. emg

    emg

    Best answer so far!
     
    #14     Apr 8, 2011
  5. maxpi

    maxpi

    The work is solitary, it attracts people that are introverted. The ones with intuition backed up by gut feel can get some kind of a game going in a few months or a year or two but they are lame... the ones that back up intuition with thinking take much longer to get a game plan and they are somewhat less lame... extroverts with intuition backed up by thinking will take FOREVER to get going but once they master the game they pile up the cash like crazy...their biggest obstacle is implementing their plans, they have to master themselves and undergo personality change in order to get their trading implemented properly but when they do it's 80% wins and winners much bigger than losers all day every day...
     
    #15     Apr 8, 2011
  6. Cheese

    Cheese

    This thread is on the repeat topic of endless threads on the same subject, namely why most people lose.

    The unrealised fact behind losing is that they are all amateurs and they lose. I have a professional and executive background in this business. And undoubtedly stocks and futures markets put you at the heart of world capitalism.

    However my previous posts have repeatedly shown my view that there is still no bar to an amateur becoming a winner. I attempt in my posts to bring new and existing players at ET to the nub of what they should be doing.

    But I am not a teacher, mentor, trainer or instructor to anyone (other than to past or present employees). I would not detail and send the systems I use to any outside person. Your success can only ever be your own personal achievement. So you must do your own study and problem solving. I like to see amateurs make themselves rich. For sure, it can be done. It is a good thing and there is plenty of room for amateur traders to make themselves securely rich on a big scale.
    :)
     
    #16     Apr 8, 2011
  7. rew

    rew

    The short answer is that if it were easy everybody would be doing it. Most markets are zero sum games (or very close to zero sum) which means that anyone who is regularly pulling large amounts of money out of the markets is getting that money from somebody else, often retail traders like yourself. In fact, if you throw in commissions and fees most markets are negative sum, with the only sure winners being the brokers collecting their steady stream of nickels and dimes.

    It is also a fact that most markets are efficient. In quant speak that means that the prices are very close to being martingales. If they were true martingales no trading strategy would work. Successful traders find deviations from efficiency and make that their edge, unsuccessful newbies see patterns in random data that aren't there and trade thinking they have an edge but don't. Most traders are in the unsuccessful newbie category. Because markets are so efficient it is very hard to find an edge. And because markets become more efficient over time edges go away, and you have to find new ones.

    You are competing against a horde of quants at places like Renaissance Technologies, and against hard core traders with every inside edge possible at banks like Goldman Sachs. Are you surprised they keep ripping your face off?
     
    #17     Apr 8, 2011
  8. +1
    From time to time you will find some edge (aka market inefficiency or loop hole) and you indeed will make money out of it in a short while. However, the market is so efficient and "they" will find out very soon and this edge will be exploited by them and it will disappear very soon. "They" - refer to the platform provider that you used to develop and back test your strategy, your brokers, MM, HFT tracking system, the group that re-pack your edge and re-sell to smart money. This consequence will leave those "edge finder" wonder why the edge disappear after a short while, even it is working fine for the past 15 years based on the back test.

    This sound familar, right ? :confused:
     
    #18     Apr 9, 2011
  9. Look at my record: 302 - 70. Compounded gain of almost 400%. And those are only the trades I'm able to verify with documents on my site. My stats are even higher otherwise.

    It's not gambling at all.
     
    #19     Apr 9, 2011
  10. Call me crazy, makethesetrades, but your trade recommendations are one-sided, so they don't qualify as trades at all.

    You make a entry trade recommendation at 8:30 am, for instance, to buy F at 17, but you give no exit advice. If Ford ranges between $16.50 and $17.05 that day, closing at $16.50, you still get to make the claim that you sold at $17.05 when you post your result at the end of the day.

    Quoting your site, "The chances are that this (trade recommendation) post will not provide the details of my exit strategy. After all, my advice is free, and I don't want to give away my strategies."

    You're just telling people to open a trade without giving them any advice on how to manage that trade. I don't see that as helpful at all, and it raises questions about the results you claim.

    I'm sure you would debate my conclusion, so I await your response.
     
    #20     Apr 9, 2011