5% of traders make it?

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Old May 13, 2018, 2:40pm   #1
 
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5% of traders make it?

Hi everyone,

Iíve been doing my usual Sunday reading whilst sat in my spa with a glass of wine and contemplating positions for market open later tonight and I pondered on the following:

I keep hearing/reading about the 5% or there about who are successful traders. The figure usually bounces around a few percent or commonly referred to as 95% of traders lose etc. It makes me wonder why so many believe this statement. To be honest Iíve heard it so many times I started to believe it myself. Itís as if people wish to believe that if they beat the markets then they must be part of some elite club of special people and only a few succeed so you must be really clever. The real figures as published* show typical percentage figures bouncing around 24% succeed over a period of a year.

So with this in mind and presented with figures from a well established broker, it always makes me wonder why so many struggle. In principle, if I meet 4 people who wish to be a trader and then sets about opening an account and starts trading, it stands to reason that on average 1 of those will succeed in being profitable over a period of a year. From here on in, should that person continue as they have done over the 12 months, there is no other reason (with some exceptions) that the trader will continue to be profitable moving forward.

However, itís easier to accept that if a person loses, donít worry, everyone loses. Unfortunately thatís not the case though. Trading profitably is easier than youíre led to believe..... but, many will have you think itís imposible.

NOTE: There will always be people who can screw up a cup of coffee, that being the case, donít open a coffee shop and donít even bother working for Starbucks. But Iím not talking about the exceptions, Iím talking about the majority of everyday people that want more than just a wage to work 9-5 Monday to Friday till they retire. Iím specifically aiming at those that take it serious and appreciate the work and effort that goes in to such a business.

Again it is with my conclusion that it is only ever the individual who prevents their own success.

So what to do?

Well for starters stop listening to mainstream fed news and take everything with a pinch of salt at the very best. Get genuine facts, figures and statistics, get behind the scenes, listen to all sides of the equation or argument (however absurd it may seem at first glance), build contacts, pay for the best news feeds and data packages and make a trading plan based around this. Then trade it until your plan fades out or, you are where you want to be in life. By that I mean financial freedom, work when you want to and have success in wealth. What you then do is entirely up to you.

*Based on IG figures for EU account holders for the period of 2017. EU account holders at 378,100. Figures presented from IG to ESMA page 21 on the 5th February 2018
Link: https://replytoesma.trading/src/asse...r_evidence.pdf

All the best for the coming week.

Lee

PS: There is a traders meet up this coming Wednesday evening in central London. At present around 50 are in attendance. Itís always a great crowd consisting of new and old, successful or not and wannabe traders. Itís held in a private bar just for us and is hosted by Paul Wallace. There is no commercial set up or speakers selling. Iíll post up a link in another thread at some point with further details for those serious about being in the game and having a few drinks and a laugh with like minded positive people.
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Old May 13, 2018, 4:47pm   #2
 
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I think of the '95% who lose', most of them haven't been in the game very long and give up after a few months when they decide they can't afford to lose any more money and this is what skews the statistic. If we were to only look at traders who have more staying power, lets say they been trading for at least 2 years, I think we would see quite a different picture. Basically, what I'm saying is; if you want to be a successful trader, you need to be well funded, patient and tenacious - whereby every time you get knocked down, you can and will get back up again.
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Old May 14, 2018, 2:04am   #3
 
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I stated hearing the “95% losing” after the dot com bust, so maybe it was true then and maybe it will be true again one day (after the token bust for example)...
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Old May 14, 2018, 4:34am   #4
 
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95 % loss because after they got small profit, they open another position with bigger lot and lose more money. They not follow the trading system and daily target.
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Old May 14, 2018, 8:39am   #5
 
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Less than 1%

It all depends on how you define ‘successful’. If being profitable at the end of a 12 month period makes a person successful then yes, I agree, the figure could be much higher than 5%. A simple mechanical strategy could remain profitable for longer than that.

I’m sure there are many penny-betters who regularly take a punt on the markets and at the end of a year have amassed a few hundred quid more than they started with. Does this make them 'successful'? Possibly...does this mean they are ready to resign from a job that pays them $50K p.a and trade full time? I doubt it.

Most people who enter this profession don’t just want to have a profit after 12 months, they want to make trading a full time profession and in that case I’d say the number of people who make it that far is less than 1%.

Look at the number of people who have been a member of this forum for years, almost all of whom probably hoped to become a full time trader when they first joined. How many of them actually are? (And I mean bona fide self made and self sufficient traders who were so profitable they gave up a full time profession to trade full time).
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Old May 14, 2018, 9:31am   #6
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95% is a generalisation......intended to indicate this is a hard business to pursue....

if you were to take 100 people who actually opened up a funded live account and look say 5 years later I would tend to agree with it.....and that perhaps only a small percentage will still be trading and profitable ....25% seems way way to high if you are looking for profitable traders over 5-10 years


so its all about survival bias.....stay capitalised for as long as you can and eventually the penny will drop ...........as long as you have followed the things already discussed in this thread

all of the excellent profitable traders i have ever worked with over the years have all definitely displayed one outstanding trait

dogged and unflinching belief that they would make it despite all knockbacks......

grit, bull headedness, determination, balls, focus , .....whatever you want to call it ....there was never a moments doubt that they would make it happen.....

I've never felt i fitted this category but others tell me they feel i do........Ive been lucky in that I grew up with professional gamblers in my family so it was normal to emulate and do what they did to be successful in trading .....i have always loved the challenge and buzz of winning in gambling/Trading environments and the tougher the puzzle the more fun i have had trying to solve them .......

still learning something every day .....

N
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Old May 14, 2018, 9:36am   #7
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Originally Posted by new_trader View Post
It all depends on how you define ‘successful’. If being profitable at the end of a 12 month period makes a person successful then yes, I agree, the figure could be much higher than 5%. A simple mechanical strategy could remain profitable for longer than that.

I’m sure there are many penny-betters who regularly take a punt on the markets and at the end of a year have amassed a few hundred quid more than they started with. Does this make them 'successful'? Possibly...does this mean they are ready to resign from a job that pays them $50K p.a and trade full time? I doubt it.

Most people who enter this profession don’t just want to have a profit after 12 months, they want to make trading a full time profession and in that case I’d say the number of people who make it that far is less than 1%.

Look at the number of people who have been a member of this forum for years, almost all of whom probably hoped to become a full time trader when they first joined. How many of them actually are? (And I mean bona fide self made and self sufficient traders who were so profitable they gave up a full time profession to trade full time).
that last bit is an interesting caveat as well .............sucessful traders dont have to be full time ..........ive probably only been deemed a full time trader (ie no other income sources) for no more than a handful of years in total .....mainly trading F/T between jobs and other consultancy contracts ....

im full time again at the moment and bored to death so am ressurecting some of my trading coaching and mentoring work .......

i dont play golf , i dont cut lawns much , i dont collect stamps and i dont have grandchildren to dote on .........my hobby and vocation is Trading / Gambling .....from the moment i used to sit in my grandads betting shop back in the 1960's helping him add up the takings and making the odds ........i fell in love with it

so thats it ....warts and all

N
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Old May 14, 2018, 4:49pm   #8
 
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I wonder what the %win was prior to the injection of every market by algo's circa 2007?

Am I wrong that algo's have made these markets "jumpy", or erratic for daytrading?
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Old May 14, 2018, 5:05pm   #9
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Originally Posted by piphoe View Post
I wonder what the %win was prior to the injection of every market by algo's circa 2007?

Am I wrong that algo's have made these markets "jumpy", or erratic for daytrading?
hey P

my feeling is some of the big spiky moves have been caused by these....but i think things are less volaile than they used to be due to better "safety's" on algos and much more manual intervention always ready for meltdowns

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Old May 14, 2018, 7:31pm   #10
 
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Quote:
Originally Posted by Lee Shepherd View Post
The real figures as published* show typical percentage figures bouncing around 24% succeed over a period of a year.
*Based on IG figures for EU account holders for the period of 2017. EU account holders at 378,100.
The stat you want is 'Of all of the accounts ever opened at IG (in the last 44 years). How many of those made an overall profit'

My guess is that figure is closer to 5% than 24%.
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Old May 14, 2018, 8:58pm   #11
 
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Lee Shepherd started this thread All interesting comments and replies. I wonder how many have read the paper published in full (not that you have to), in length and most of all fully understood it. It's more probable that people will likely believe what they have installed in their minds already and simply give replies such as 'why should I bother to read/investigate or even believe' The opening post was long enough and I didn't really bother to read that properly

Is this what holds people back? Knowledge is power after all, research is king and to achieve, you have to believe - Don't shoot me, I'm just asking and stating lines - If you've read the paper in full and fully understood it or have seen other evidences and published papers and you are a full time successful trader then this does not apply to you as you would be one of the 24%. You'll also understand that trading and making money is not difficult. If you are not, and struggling/unprofitable/account topper upper, you may take easy offence and become either hostile or at the least defensive about this fact.

However, if you have a full time job working 40+ hours for a firm (or even yourself), then you go to work then get paid your worth (or not). All a trader/investor does is come along, see's how hard you work then invests/buys/sells a part in the business you work for.

Self investment is the most powerful thing one can ever do, investing in others is the second.

Regardless of this and that, the following statement is true as published (as verified by Investment Trends LTD (UK): irrespective of the value, amount of trades, full time, part time or no time, its this:

"The actual proportion of profitable accounts across IG’s European clients for the calendar year 2017 was 24%"

This is not 5%, 10% or any other figure..... it's 24%..... believe it or not - it's your choice. The world around you is what you shape it to be, as are your friends and contacts.

Meaning as stated - very simply - that the actual proportion of profitable accounts across IG's European clients for the calendar year 2017 is 24% - hang on, thats what they said. Sorry, there is however no other way to say this or skew it or make it anything more or less than it is. It's really that simple. 24% of IG's EU clients were profitable in the calendar year 2017. More importantly though, were you one of the 24% or one of the 76% ?

PS: I check through my contacts on my phone and see almost 30 odd numbers straight off the back that are successful traders, and for whom I can call upon. In fact, I have not 1 number of a person that is not a successful trader. (maybe 1 but I won't talk about that) Of course I have friends and family members but they are not traders, do not proclaim to trade nor want to be a trader. When I was at the PSE I was surrounded by hundreds of successful traders. Relevance? Build your contacts and choose your friends wisely, they will either hold you back or have your back. As what was once stated to me years ago - hang around sh1t and you'll smell like sh1t. If you want to smell like roses, you know what to do.

Hang around the people you want to be like, learn from them, listen to them and if you like, mimic them. If you want that expensive car or house or financial freedom, listen to those who have them already - not your mate who says it can't be done.

On top of that, I hope all have had a successful day. Lets all get some rest and up fresh for tomorrow. I'm off Wednesday and Thursday as will be in London for the Traders meet up. I look forward to meeting with some of you there. Happy trading.



Lee
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Old May 14, 2018, 10:30pm   #12
 
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Lee,

It seems to me that it doesn’t actually matter a toss what the “true” percentage is or what is “successful”. What does matter is whether you are satisfying your own aspirations or not. If you are then you’re a 100% winner, whether that aspiration is to have a bit of fun and not blow your account too often, or to make millions, or wherever in between. If not, then you’re on the losing side whether or not you are actually losing money regularly.

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Old May 15, 2018, 8:08am   #13
 
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Lee,

It seems to me that it doesnít actually matter a toss what the ďtrueĒ percentage is or what is ďsuccessfulĒ. What does matter is whether you are satisfying your own aspirations or not. If you are then youíre a 100% winner, whether that aspiration is to have a bit of fun and not blow your account too often, or to make millions, or wherever in between. If not, then youíre on the losing side whether or not you are actually losing money regularly.



Cheers
Hi Jon and good morning,

As this is a trading website I would imagine a lot on here want to be traders and hence the website name, trade 2 win. I respect you donít give a ďtossĒ about the precentages (many people wonít) but I do respect your passionate response.

I also respect the fact there are a lot of older retired people on this board who flutter on the markets to have fun then come here to discuss. If one is blowing their account or losing money but having fun, then this would fall into a different catorgory than trading for a living and having financial freedom. Iím specifically aiming at those working 9-5 Monday to Friday that want more in life so they can be satisfied and be able to spend more time with friends and loved ones. With respect Jon, this is something you can already do. I want people to fulfil their dreams and not work to fulfil someone elseís.

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
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Old May 15, 2018, 8:51am   #14
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"NCAs’ 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 €1,600 to €29,000. "

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




"The winnings can be large. Peter Hetherington, IG’s chief executive, says some 3,000 customers*— about two per cent of its total — generate about half of the company’s 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)

Last edited by kalott; May 15, 2018 at 8:59am.
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Old May 15, 2018, 8:53am   #15
 
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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.
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