WARNING: 90% Of Retail Traders Lose, What Are You Made Of? Are You A Shark?

This is a discussion on WARNING: 90% Of Retail Traders Lose, What Are You Made Of? Are You A Shark? within the Psychology, Risk & Money Management forums, part of the Methods category; I have always heard that 80 percent of the people that trade futures lose money, 10 percent break even and ...

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Old Feb 23, 2016, 10:19pm   #9
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I have always heard that 80 percent of the people that trade futures lose money, 10 percent break even and 10 percent make the money that the other 80 percent lose.

I wish there was a chart that broke down the 10 percent that make money.
Someone is making big money along the way.
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Old Feb 23, 2016, 11:48pm   #10
 
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Originally Posted by TexasRangersFan View Post
I have always heard that 80 percent of the people that trade futures lose money, 10 percent break even and 10 percent make the money that the other 80 percent lose.

I wish there was a chart that broke down the 10 percent that make money.
Someone is making big money along the way.
The findings of the studies that have been done regarding this sort of thing have been remarkably consistent. In a nutshell, those who take it seriously succeed and those who don't, don't. If you're interested, google the studies of Barber and Odean, the most recent being 2010. You may also want to look up Cory Mitchell.

Then there is this:

The proportion of commercial failures due to Lack of Capital or Incompetence is about 60 per cent. Call the former by its Wall Street cognomen — Overtrading — and the percentage of stock market disasters traceable thereto would be about 90.

That was written by Richard Wyckoff. In 1909.

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Old Feb 24, 2016, 8:04am   #11
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The article's OK, but can only go into limited depth in a short web piece. For more, Mark Douglas covered the psychological basis for traders so well in his well known books.

My own two-penn'orth's worth on this is that the majority of the majority who fail never wanted to be traders anyway. Yes, they wanted to start trading in order to make money, but with no intent to be traders the rest of their lives. Their mission statement would have read: learn totrade, make a lot of money in a year or two or at the most five, and then stop trading for ever.

To me, they were never going to be traders, they shouldn't be counted as such in any statistics about 80% or 90% of traders failing. I'm not surprised so many of this group fail. Its a shame the vocabulary of our field hasn't got the right term for these guys yet.
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Old Feb 24, 2016, 8:42am   #12
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The article's OK, but can only go into limited depth in a short web piece. For more, Mark Douglas covered the psychological basis for traders so well in his well known books.

My own two-penn'orth's worth on this is that the majority of the majority who fail never wanted to be traders anyway. Yes, they wanted to start trading in order to make money, but with no intent to be traders the rest of their lives. Their mission statement would have read: learn totrade, make a lot of money in a year or two or at the most five, and then stop trading for ever.

To me, they were never going to be traders, they shouldn't be counted as such in any statistics about 80% or 90% of traders failing. I'm not surprised so many of this group fail. Its a shame the vocabulary of our field hasn't got the right term for these guys yet.

Hi Tom

Maybe a good name for this group would be - "Chancers"

I totally agree with you about the rubbish you hear about FX and the industry

All depends who paying for the survey and what they want to get over - or "spin"

For example - the brokers want us to believe anything from 25 to 35% of FX traders make money

Losers - some vendors even - and some of the trade want to get it out it's only between 1% and 10% that are successful and become consistently profitable

Similar with the number of world wide retail FX traders - it ranges from half a million to 3 million

So lets say 5% are profitable FX traders - just as a conservative estimate covering the whole world ( not one country or just housewives etc etc ) then that means between 25000 and 150,000 traders are consistently profitable

Forget the 400000 or 2 million plus trader who never really get there - as you say maybe 80% of those guys are just "chancers" and maybe the odd 1 gets through a year or two and finds out hes got a natural ability to make money trading - it does happen - but then 99% of the other "chancers" will just slowly give up - and there is nothing wrong with that at all


Regards


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Old Feb 24, 2016, 9:29am   #13
 
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Get back to work you pommie bludgers otherwise you be joining the 90%

http://dandenong.starcommunity.com.a...mmie-bludgers/
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Old Feb 24, 2016, 11:17am   #14
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Most will lose because instead of investing in themselves are constantly searching some kind of magic somewhere else.

Only a few will go deep down where it hurts to deal with the nitty gritty and when they come out of it they will be payed for the inconvenience.

The rest will choose the apparent easy way which will turned in the not way at all.
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Old Feb 24, 2016, 12:24pm   #15
 
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Quote:
Originally Posted by tomorton View Post
The article's OK, but can only go into limited depth in a short web piece. For more, Mark Douglas covered the psychological basis for traders so well in his well known books.

My own two-penn'orth's worth on this is that the majority of the majority who fail never wanted to be traders anyway. Yes, they wanted to start trading in order to make money, but with no intent to be traders the rest of their lives. Their mission statement would have read: learn totrade, make a lot of money in a year or two or at the most five, and then stop trading for ever.

To me, they were never going to be traders, they shouldn't be counted as such in any statistics about 80% or 90% of traders failing. I'm not surprised so many of this group fail. Its a shame the vocabulary of our field hasn't got the right term for these guys yet.
On the other hand, if one doesn't count them, then an even more warped outlook for success prevails, and it's warped enough as it is. AFAIC, the numbers speak for themselves.

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Old Feb 24, 2016, 2:22pm   #16
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my contribution to this thread:

I have to say i like the term chancers but i prefer the term plagiarist washouts [people carbon copying someones work and expect to succeed]

I think if people can overcome this inherent property we were programmed with from birth [grow\win\succeed]; we would have a very different ratio of success -I think it would even change market dynamics. You cannot succeed in trading until you deprogram yourself because your intentions will always align yourself to failure. it might be fear of being wrong or not focusing on important bits because of tunnel vision biased towards our programmed properties.


The best way to deprogram this is to throw a few hundred into an account and trade it to lose. Don't cheat by throwing the maximum position size. The goal here is to bleed yourself of everything you believe to be right. When you feel that you want to go long then open a short trade and set your target and stop like you normally would. There are 2 valuable lessons in this exercise that will change your belief system that you have been programmed for your entire life.

1) Anything can happen. Don't bias yourself in any way because you will end up with tunnel vision
2) Decouple yourself emotionally from losing. This will take the fear away and you can tune your intuition to get you out of a loser before your stop is hit which can improve your results.
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