Why do more than 90% of traders lose?

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

  1. diogenes,

    your information is false. My site clearly explains the strategy.

    For records purposes, I tell traders EXACTLY when to buy or short (live on twitter). It's very unlikely I made a recommendation at 8:30 in the morning in premarket. That's only happened abotu 5 times out of the 99 trades Twittered so far.

    When it's time to close out the position, I tell them AGAIN on Twitter, at that exact moment.


    I don't provide them with details of my exit strategy because the whole point of my site is that I do the work for them...they simply need to wait for my Twitter message stating to close out the position.

    However, I can provide them with updates to say something like "I don't plan on closing out the position today).

    There is no way for me to game my results: I post pictures of my Twitter predictions, along with pictures of the real time streaming quotes bid/ask price within seconds after I make the predictions.

    If you would've reviewed just one day's trading results you would've seen that.
     
    #21     Apr 9, 2011
  2. And one more thing...

    even if I WASN'T telling traders exactly when to exit their trade...and was instead using the day's closing price...that wouldn't guarantee me a profit at all, b/c it could just as easily end the day lower.
     
    #22     Apr 9, 2011
  3. http://in.reuters.com/article/2008/06/12/china-banking-trading-idINPEK33998520080612


    I posted the following article on the 95% lose topic. I did not receive a single reply to my post. Posters who posted just their opinion, with no facts, received multiple posts. I think this shows why so many people lose money. People want to believe they can make easy money trading. And, they choose to ignore facts which say otherwise. They think that they are "only" investing $3000 in it. But to the brokers/dealers those $3000 accounts that lose add up quickly.
     
    #23     Apr 9, 2011
  4. Pekelo

    Pekelo

    The answer is pretty simple and has been discussed to death:

    1. Most start up business goes down, so why trading would be any different, when the start up cost is very minimal (can be 2-3K) unlike other businesses? Also, no experience or licence necessery. Try to start a restaurant or a plumbing business with 3K or without experience.

    2. Under capitalization. That....

    3. Lack of a plan or consistent approach.

    4. Psychological aspects of trading.

    5-10. Blah-blah-blah...etc.etc.etc....

    By the way congrats to emg for making his 1 ES point in April! You da MAN!!!

    I wonder who is going to start a thread: Why only 5% of pro poker players make it???? Oh yes, I guess it is me....
     
    #24     Apr 9, 2011
  5. Great post.

    I can go out with friends and everyone is having a good time but I am in my head thinking how corn compared to sugar from 1870 to 1880. And why?

    It's more of a disease or a dissorder I would say but that's just the way it is.

    The only way to stop it is get totally wasted.
     
    #25     Apr 9, 2011
  6. Consider the implications of what you are saying. You are implying that some "edge" existed in the market for 15 years with none of the institutions you mentioned finding it, then you (or some other retail trader) found it, then those institutions noticed you trading it profitably and stole it from you.

    That's pretty preposterous.
     
    #26     Apr 9, 2011
  7. Perhaps the forex article is being misinterpreted. One paragraph says:

    "...
    At FXCM, 75% to 77% of customers lost money each quarter last year, according to newly required disclosures to the Commodity Futures Trading Commission. At Gain, which operates through http://www.forex.com, the number of unprofitable customers hovered between 72% and 79% every quarter last year, according to its filing.
    ..."

    The article puts a spin on it that 72% to 79% is a big bad scary number, but that is interpreting it out of context.
    An alternative spin: According to the title of this thread, 90% of traders lose. Yet according to the forex broker stats, only around 75% of their clients lose money. It sounds more like the forex brokers must be giving their clients some kind of advantage, given they have reduced the loser rate so much. If 90% lose, then 10% win; with the forex broker, around 25% win -- a 150% improvement !!! (or maybe it's not "lose vs win" but more like "lose vs. win/breakeven/hold account but don't trade").
     
    #27     Apr 9, 2011
  8. You should check your math. It is ~75% per quarter which is much worse than 75% per year. ~25% make money one quarter. But, due to the overlap, the next quarter some of those 25% will lose money, the quarter after that some of the remaining part of the original 25% lose money, and so forth. By the end of a year, probably over 90% are down money for the entire year even though many had a winning quarter or two.
     
    #28     Apr 9, 2011
  9. These constant posts from emg are very old, very quickly.

    FACT: Trading is hard.
    FACT: Many get into this thinking it's a get rich quick scheme.
    FACT: Some treat trading as a hobby, while others treat it as a business.
    FACT: Entry costs are incredibly low and just about anyone can 'give it a try'.

    When you can open an account for $500 with a credit card, just about anyone out there can give it a shot and see. Most of those will fail, but were they even trying or just buying a lotto ticket?

    These numbers and stats that emg has fallen in love with (misery loves company?) include all the people opening a mini-fx account with a few hundred bucks taking a shot to the guys that do this full-time as a living. Think there's a difference in mindset when you treat trading as a lotto ticket vs. an income stream? Think the numbers would change if cost of entry was $100k+ (like just about any other business out there)?

    It's a bit pathetic that emg feels the need to say how bad trading is over and over on an anonymous message board but if you are one of those failures, you want to know you are not alone, right emg? And if emg is going to say he's one of the few making it, why the hell would you be spending your time posting the same message over and over?
     
    #29     Apr 9, 2011
  10. Simple answer


    Because they quit before they became profitable either due to low capital, laziness or just did not have the perseverence because they were looking for instant gratification. 90% of people can't handle losing so that is why they fail at trading. The let one or a few losing trades cloud their mind and alter their emotions which leads them down a path of self destruction. It's not until you learn how to lose small and gracefully, that you can truly become a successful trader.
     
    #30     Apr 9, 2011