5% of traders make it?

This is a discussion on 5% of traders make it? within the General Trading Chat forums, part of the Reception category; Originally Posted by kalott "NCAsí analyses on CFD trading across different EU jurisdictions shows that 74-89% of retail accounts typically ...

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Old May 15, 2018, 10:50am   #16
 
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Originally Posted by kalott View Post
"NCAsí analyses on CFD trading across different EU jurisdictions shows that 74-89% of retail accounts typically lose money on their investments, with average losses per client ranging from Ä1,600 to Ä29,000. "

https://www.esma.europa.eu/press-new...tail-investors




"The winnings can be large. Peter Hetherington, IGís chief executive, says some 3,000 customers*ó about two per cent of its total ó generate about half of the companyís non-US revenue. These high-earners will typically pay £85,000 a year in transaction fees to the platform, meaning they pocket many multiples of that.*"

https://www.ft.com/content/7a1cd446-...8-07c3086a2625


2% make money?

74 -89% lose money?

and the rest break even? (not counting workhours)
Hey Kalott,

Good research mate. Thanks for the links. I can't open the FT link as I figure you logged in to you subscription to access. Can you post up more info on this?

Without making my assumptions, with spreads and commissions I would find it unlikely that 'the rest would break even'. That's quite a high number of people with many hundred different factors included.

Looking at the quote though and as you've written it does indicate that:

2% produce around half their revenue in comms/spreads, so that leaves 50% shared around the other accounts that don't lose.

The figures you found though relating to losing accounts being in the region of 74-89% is interesting. (on CFD's)

Lee
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Old May 15, 2018, 11:21am   #17
 
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Lee

Yeah, I probably came over a bit strong .

My point is that “success” is very much a personal thing - even for professionals. Similarly all that really matters is whether one, personally, makes money or not - if you do it doesn’t matter if you belong to a 5% or 24% club other than from an ego point of view. Similarly, if you lose it’s small comfort to know that most do.

As to whether it’s hard or easy, that, too, is a personal thing. Funny thing is that trading is easy until there is real money down when it becomes much more difficult.
Hey Jon,

lol, I thought you were having a bad day. I don't usually hear such profanity coming from you.

I do agree with you that some will find it harder than others and that success comes from within, in other words what you find/call succesfull, some others may not.

But.... and here's the but...... I'm solely getting at those that want to succeed - and to be clear I'm talking success in finance/wealth which can lead to having more time to do the things they love before they are grey and old with a worn out body - we all have 24 hours in each day, its how we spend them that really count. Trading may also be for those that want to follow the path at buying and selling, make it a career and leave their current line of work for whatever personal reasons they may have. When we were all at school, we never thought let alone dreamt that we would be working so dam hard to achieve a very basic 'normal' lifestyle. If we're lucky we might have some money left over after paying all the bills to go on an international holiday once or twice a year. So we spend our time watching other people on telly with their lifestyles or hit up Facebook to see what our friends are doing. What do we see? Whatever we want to, that's selective.

The bottom line is this, if one is earning from the markets and never topping up then they are by default and whether they like it or not, part of the 24% club. (that's what I'm going to call it from now on ). To be honest there is less ego and kudos being in a 24% club than a 5% club. (but its not a club, just a statistic) That's whats I'm conveying here. In simpler terms, trading is not as difficult as it's made out to be, and therefore you don't have to be some special brainy guru type of person. For anyone who's met a trader will tell you, we're all dumb as f**k. Usually very strange people that believe in conspiracy theories and always talk about what if's. But usually put the world right after a few beers.

But as I've said in previous posts, this is part and parcel of trading. If someone presents a different side to a story, listen to it, however absurd it may sound at first glance. 2 ears, 2 eyes, one mouth, used in that ratio I'll always be learning. Whats comes out of my mouth is what I put in using my ears and eyes.

Of course the figures matter, they matter greatly. Percentages is what we deal in as traders. I want to know with high certainty that a trade will pull off, of course, sometimes they don't, this is percentages for you - as you may know by my recent large loss in one day. (£16.5k)

So, if a trade has 5% chance of winning would I accept that or would I prefer to know that the trade had a 24% chance of winning. This is the bit that people feel uncomfortable with. If you only have a slim chance of success but yet fail, then that's better than failing at something whereby you have a greater chance of success. It makes people feel uncomfortable knowing they fail at something easier than they have been told, this can make them defensive and even hostile without them knowing (on the subconscious level)- this is not their fault but it is their responsibility. Due diligence should always be at the helm. It all boils down to research.

Investment in oneself is the most powerful thing to do.

Regards,

Lee
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Old May 15, 2018, 11:22am   #18
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Hey Kalott,

Good research mate. Thanks for the links. I can't open the FT link as I figure you logged in to you subscription to access. Can you post up more info on this?

Without making my assumptions, with spreads and commissions I would find it unlikely that 'the rest would break even'. That's quite a high number of people with many hundred different factors included.

Looking at the quote though and as you've written it does indicate that:

2% produce around half their revenue in comms/spreads, so that leaves 50% shared around the other accounts that don't lose.

The figures you found though relating to losing accounts being in the region of 74-89% is interesting. (on CFD's)

Lee
about FTs article i did a google search for

The winnings can be large. Peter Hetherington, IGís chief executive, says some 3,000 customers


another thing about this that can make things look worse than it is

in other countries i know that some using CFDs to hedge long positions they have in stocks instead of stops

so a loss on CFD can be a profit on stocks on another account
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Old May 15, 2018, 11:50am   #19
 
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Lee

As I understand it your trading style is sort of set and forget. It either comes off or it doesnít. That sounds easy peasy, but many without your iron discipline find it hard. Iíd say that the process is easy, but that execution depends on whatís going on inside your head and can be easy or hard accordingly.

Donít really think weíre on different pages

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Old May 15, 2018, 12:39pm   #20
 
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What came first?

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Originally Posted by Lee Shepherd View Post

Itís purely to give understanding to all that come here is that trading is not as difficult as is made out to be and these percentages show itís easier than what is sold to the masses in the media and (most) vendors/sellers.

Iím all for freedom of information and most importantly, the correct information. These percentages indicate weíve been lied to on a constant basis.

All the best,
Lee
Is this the way you think it all started? The 'industry' just brainwashed people into believing that trading is harder than it is?
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Old May 15, 2018, 1:11pm   #21
 
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Is this the way you think it all started? The 'industry' just brainwashed people into believing that trading is harder than it is?
Hey new_trader,

I'm quoting what I and you and everyone else see's printed on a constant basis. Therefore the common belief is that 95% (or thereabouts) fail at trading. Although I very much welcome your input and question, please be a little more specific for the basis of the conversation.

How do you think it all started? I would welcome your further input.

It stands to reason that if people think that something is difficult, they will either gracefully fail at it knowing that its a high rate of failure or worse still, will never attempt it. This is what ultimately holds people back from doing what they want to in life.

They can't/won't quit their job because they have a family, a mortgage, a responsibility etc. They won't open that coffee shop because they've heard its at saturation point, too hard to get finance, the big boys have it all etc etc or worse still my mate says don't bother.... so I keep doing the same things day in day out until when... at what point do I expect a different output from my input. If I do the same each day, the results will be the same, so... to change the result, I have to change my actions....... TODAY.

If people knew how easy it is to start following their own dreams then would this be good for big businesses, corporations and legislation? Of course not. So, who holds us back? I don't know, but ultimately it is our responsibility to ensure we give it our best, whatever that is. Only one life mate.
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Old May 15, 2018, 2:38pm   #22
 
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I disagree completely with your original premise that "Trading profitably is easier than you’re led to believe".

Regardless of what the true percentage of profitable traders is there will always be people who believe they could be in that percentage regardless of what anyone tells them, even if it was as low as 0.001%. Conversely, there will always be people who are actually in the other group and find it extremely difficult, even if the true percentage of profitable traders is 90%. There is no way it is purely a mindset issue. I know this from practical experience, anecdotal and empirical data.

Stories of people trying and failing to make money from the markets are as old as the hills, don't you think the cat would be out of the bag by now if it was as simple as you make out? You can't pull the wool over peoples eyes for that long, especially if they see their neighbour, brother, sister, friend etc driving a fancy new car every couple of years.
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Old May 15, 2018, 3:30pm   #23
 
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I disagree completely with your original premise that "Trading profitably is easier than you’re led to believe".

Regardless of what the true percentage of profitable traders is there will always be people who believe they could be in that percentage regardless of what anyone tells them, even if it was as low as 0.001%. Conversely, there will always be people who are actually in the other group and find it extremely difficult, even if the true percentage of profitable traders is 90%. There is no way it is purely a mindset issue. I know this from practical experience, anecdotal and empirical data.

Stories of people trying and failing to make money from the markets are as old as the hills, don't you think the cat would be out of the bag by now if it was as simple as you make out? You can't pull the wool over peoples eyes for that long, especially if they see their neighbour, brother, sister, friend etc driving a fancy new car every couple of years.
Hi new_trader,

I don't state it is 'as simple as I make out', please direct me to where I have stated this if that be the case. You're missing the point entirely and instead putting words in my posts that clearly are not there.

I'm merely stating as I have done in all these posts that it is easier than we are told. Again that its not just a 95% fail scenario but in fact rates more like 24% win (on average over a time period of a year as per the huge amount of data compiled and verified by the sources I mention in the opening post).

Naturally there will always be people that cannot for whatever reason achieve the same success as others and of course it is no way just a mindset issue. But again, I'm not talking the exceptions here nor I am talking about individual experiences such as yours and how you describe them.

There is no 'cat out the bag' thing going on here. If one can trade, then trade, if not find some other vocation in life - unless of course its just for fun then that's totally different. Is it really a secret that you can open a business and be successful financially at it or is it purely down to luck, obviously bad luck has a part to play but in most cases its bad judgement, not luck that plays the vital part in failure - people will not want to hear that as they see it as a personal attack and is why only a few succeed out of the many. People see other people driving fancy new cars all the time but it seldom pushes them to change career or do something different. It rarely even prompts people to say, 'how do I get a job at your place mate' or ask the boss for a pay rise or more responsibility to enable such a rise. Instead I find the large majority of people use lines such as, they're lucky, they work hard etc but yet fail to do or recognise the same. In fact, they are probably working just as hard maybe? In fact some people simply don't want the extra responsibility or change of jobs, they're simply happy where they are and in that instance, its fine. I'm pointing at those that want more and are prepared to give more. Not the ones who want more but can't be bothered. And there are plenty of them around us.

I could work hard all day at painting pictures but I would not (necessarily) be as successful as a painter who could paint well. (I can't paint by the way). But yet I could easily look at the colleague and think it was luck as to why he sold more or that he works harder at it than me. In this scenario that would not be the case, its just simply that I am not as good as verified or described by the public at the time - I won't mention Van Gough here.

So I stand by my original comment that 'trading profitably is easier than we are led to believe'. But I respect that you disagree completely with this statement.

Lets also remember that percentages are a guideline and on average. They don't comply to individuals. Just like when we trade (as I assume you do but I may be wrong), we don't get 3 losses then 7 winners just because our stats say we get a 70% hit rate. A room full of people may produce all failing traders whereas another room may produce several winners. By default some will make it, those who work at it though have a higher chance to succeed.

I look at some people who want to be traders and they put in part time hours or/and half a5sed efforts expecting to 'beat the big boys'. Lets face it, its unlikely its going to happen. (over time of course). But we can understand that the odds are not as stacked against us as we are led to believe. Further info on this will be released through the summer with the recent ESMA rulings on transparency. Although if anyone has any early releases from their brokers, throw them across.
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Old May 15, 2018, 4:08pm   #24
 
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Lee, you're right, I am missing your point.

..24% win instead of only 5%...even if 'win' means having 1 penny more in your account after 12 months of trading. That's great news for everyone who currently thinks they are in the 95% group.
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Old May 15, 2018, 4:32pm   #25
 
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Lee, you're right, I am missing your point.

..24% win instead of only 5%...even if 'win' means having 1 penny more in your account after 12 months of trading. That's great news for everyone who currently thinks they are in the 95% group.
Hi mate,

You could be right. It could be as much as a penny.

You know thatís unlikely though right?

Although the statement is that for the year 2017 and over 380,000 European accounts, 24% of those were profitable. I donít know any more detail than that but I doubt itís by pennies.

If someone is struggling and someone comes along and says itís easier than they imagine to be profitable, I understand completely that the person would see it as a personal attack on their ability. But again, Iím not addressing any individual, just the general public. Thatís why they publish these figures to ESMA in the first place. But yet we still see bounced around 95% fail.
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Old May 15, 2018, 4:32pm   #26
 
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Lee, you're right, I am missing your point.

..24% win instead of only 5%...even if 'win' means having 1 penny more in your account after 12 months of trading. That's great news for everyone who currently thinks they are in the 95% group.
Hi NT

Thatís why I suggested it was personal - for someone who had a goal to break-even for the year 1 penny profit is a triumph, for someone relying on their trading as their sole source of income itís a disaster.
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Old May 15, 2018, 4:36pm   #27
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The stats dont really matter because they are comprised of varying approaches to the market. Seems to me that this question is always asked in context to the likelihood of being in the winning group. The problem is even in this winning group the strategies are different so it comes back to the strategy being used instead of a win loss bucketing categorisation. Of course this is a rather simplistic assessment because in reality its also down to the execution of the method which additionally has a success loss factor based on individuality.

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Old May 15, 2018, 4:40pm   #28
 
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I think trading is like any other profession, you have to put the work to succeed, it is not harder or easier than let's say becoming a doctor or a lawyer or an engineer for example...
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Old May 15, 2018, 5:00pm   #29
 
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I think trading is like any other profession, you have to put the work to succeed, it is not harder or easier than let's say becoming a doctor or a lawyer or an engineer for example...
I think the heart pumps blood around the body, what is your opinion?

People should always trade with a stop.

Technical analysis is better than Fundamental analysis.

A 1 minute timeframe is better than a 5 minute timeframe.

Indicators are useful.

What's your opinion on these? ( Let the arguments begin )
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Old May 15, 2018, 5:05pm   #30
 
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I think the heart pumps blood around the body, what is your opinion?

People should always trade with a stop.

Technical analysis is better than Fundamental analysis.

A 1 minute timeframe is better than a 5 minute timeframe.

Indicators are useful.

What's your opinion on these? ( Let the arguments begin )

Yes
Yes
No
No
No
Here you go
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Count de Money number 1 trading rule: EDUCATE YOURSELF!

Before you trade even single penny on the stock market, please spend the time and educate yourself by back testing different trading strategies and ideas - go to eBay and search for "historical stock market data", you can buy 20 years of data for less than $100 - that's all you need to start.
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