90% of traders are losers

[forexdiscussion]

HI,

I am interested in learning more about trading, however before i do i'd just like ask what probably seems a stupid question but are all those theorists that say markets can't be predicted and this is why 90% of traders are losers on to something? I could play roulette which is totally random and get better odds than that.
Are markets manipulated and random? I'd like to think this isn't the case but with so many people failing in what should be purely a case of reading supply and demand one has to wonder, is it a myth that it is pure supply and demand controlling prices, what about stop hunting?

Or have i got it wrong and the reason most newbies fail down to lack of knowledge and poor money management?

Also which market/futures contracts are less open to external influences and therefore safer to trade? I suspect the more liquid contracts?

Thanks for helping a doubting newbie out

In forex trading, fail to plan is plan to fail in your trading. Herewith I would like to share what is needed to plan your forex trading http://www.forexdiscussion.net/viewtopic.php?f=16&t=27

Happy Trading!!!

 

[Jason101]

No, the typical behaviour is to enter a position at will (position of moon, advice of cat etc) and then once they see a few points profit and the market moves one tick against them, they close the position taking the few points profit.This is just my experience of watching a few thousand new traders enter the market. Im sure it doesnt apply to every new trader. Just 95% of them...

Sounds like the fear part of the common fear and greed market emotions. Maybe some of them even started out with a plan.

 

[andycon]

HI,

I am interested in learning more about trading, however before i do i'd just like ask what probably seems a stupid question but are all those theorists that say markets can't be predicted and this is why 90% of traders are losers on to something? I could play roulette which is totally random and get better odds than that.
Are markets manipulated and random? I'd like to think this isn't the case but with so many people failing in what should be purely a case of reading supply and demand one has to wonder, is it a myth that it is pure supply and demand controlling prices, what about stop hunting?

Or have i got it wrong and the reason most newbies fail down to lack of knowledge and poor money management?

Thanks for helping a doubting newbie out

Most people want to believe there is a big bad wolf, a conspiracy theory etc. The reality is human emotions of fear, greed and revenge wreck most peoples trading. Sort out your emotions and even a mediocre system will work with good money management and proper position sizing (recommend reading Van Tharp). Having said that believing the broker is your friend is as stupid as believing an estate agent has your best interest at heart when buying a house.

 

[Tubbs]

It gets me a bit when people say that in other professions people need time to train. could you be a doctor in a few months without training? Well the main problem with this horse**** is that trading is essentially gambling. There is nothing to learn other than risk management. that's it. Now don't get me wrong - risk management is a good subject - but there is no book on how to become a trader (that has anything useful in it). Whereas for most other 'real' subjects there actually are.

 

[andycon]

It gets me a bit when people say that in other professions people need time to train. could you be a doctor in a few months without training? Well the main problem with this horse**** is that trading is essentially gambling. There is nothing to learn other than risk management. that's it. Now don't get me wrong - risk management is a good subject - but there is no book on how to become a trader (that has anything useful in it). Whereas for most other 'real' subjects there actually are.

You can't have a book or a course which sets out how to trade like you can teach a Doctor or Lawyer, because trading has to have a winner and a loser. If everybody could learn to do it and we all won there would be nobody to take the money of. So the goal posts will keep moving and only the nimble will keep up. You can have and there are courses and books that will teach risk management and probability, and that is all you really need. Even Doctors and Surgeons make decisions based on probability and risk / reward, but nobody has called them gamblers since they stopped using leaches.

We all make are way through life taking decisions based on probability and risk/reward. Life is a gamble.

 

[Tubbs]

Andycon - true.

I suppose it could be thought of a bit like tennis. There is only one tournament winner. The rest are technically losers, although probably did alright financially.

If you read a book about technical tennis theory it won't necessarily make you a good tennis player, but playing over and over again will make you match fit.

I think that is the part with trading that people don't emphasise enough. Screen time is ultimately the most important factor - as long as it is accompanied by some kind of framework for learning.

It's working for me.

I do a thing where I measure my performance against a theoretically perfect game (each trade is the best location for my system - not necessarily always winners though). That way for each day I can measure how close to perfection I was and if I am getting better or worse.

 

[Splitlink]

You won't go bust by playing tennis.

I am not a believer in the placing of stops too far away. I have tried the advice of others and allowed my trades "to breath" but I feel that that is a load of cobblers and is the reason why traders do lose so much money. There are no indications of where a price will turn or continue and, therefore, nothing is guaranteed. The only salvation one has is to cut losing trades and wait to get in again.

I believe that most losing traders are nothing more than gamblers. That is why the 90% is as high as it is. Losing traders should ask themselves whether it makes sense to allow a share to lose more than it does before their stop is triggered.

 

[andycon]

I do a thing where I measure my performance against a theoretically perfect game (each trade is the best location for my system - not necessarily always winners though). That way for each day I can measure how close to perfection I was and if I am getting better or worse.[/QUOTE]

That's a good idea, I will try that. Without divulging your system can you say how you measure your perfection in more detail.

 

[Tubbs]

Well my 'system' isn't rocket science, but it is based on pure price action - and it is an always in the market system - so I always have an either +ve or -ve bias. Now depending on how I trade based on that +ve or -ve bias will be how successful I am. At the end of the day I go back over the trades (partially in hindsight but mainly with the rules of my bias) and see how close I was to perfection.

The great thing about it is that it gives a really tangible thing against which to measure. If more trading books could show real trades versus imaginary ones they would be far more useful.

Effectively over time i just want to see my trading efficiency rising - I'm sure it will never reach my ultimate goal, but I will still be very successful even if not.

 

[RedRenegade]

I think 90% of traders are losers because they just dabble in it but do not fully understand how to trade well.

 

[neil]

I think 90% of traders are losers because they just dabble in it but do not fully understand how to trade well.

According to a survey:

http://en.wikipedia.org/wiki/Spread_betting#Mathematics_of_spread_betting

Dangers of financial spread bettingAccording to an article in The Times dated 10 April 2009 approximately 30,000 spread bet accounts were opened last year, and that the largest study of gambling in the UK on behalf of the Gambling Commission found that serious problems developed in almost 15% of spread betters compared to 1% of other gambling. In addition a report from Cass Business School found that only 1 in 5 punters ends up a winner. As noted in the report, this corresponds to the same ratio of successful punters in regular trading.

 

[happytrader8888]

HI,

I am interested in learning more about trading, however before i do i'd just like ask what probably seems a stupid question but are all those theorists that say markets can't be predicted and this is why 90% of traders are losers on to something? I could play roulette which is totally random and get better odds than that.
Are markets manipulated and random? I'd like to think this isn't the case but with so many people failing in what should be purely a case of reading supply and demand one has to wonder, is it a myth that it is pure supply and demand controlling prices, what about stop hunting?

Or have i got it wrong and the reason most newbies fail down to lack of knowledge and poor money management?

Also which market/futures contracts are less open to external influences and therefore safer to trade? I suspect the more liquid contracts?

Thanks for helping a doubting newbie out

Market is rig to make most of traders lose. If people is telling you that they are winning through futures is probably they trade in a team and trade in large volume.It is hard to let your winner run as during market off time...they will push your stop unless of course you don't even have a stop.,,,not forgetting the heavy commission you are paying your broker which cuts into your profits.

I rather you play other games which offer a much higher odds of success ....remember just play opp of the public and you have a much higher chance of success :clap:

 

[trader30]

This is absolutely ridiculous.

Please dont comment on things you clearly have no knowledge of.

Market is rig to make most of traders lose. If people is telling you that they are winning through futures is probably they trade in a team and trade in large volume.It is hard to let your winner run as during market off time...they will push your stop unless of course you don't even have a stop.,,,not forgetting the heavy commission you are paying your broker which cuts into your profits.

I rather you play other games which offer a much higher odds of success ....remember just play opp of the public and you have a much higher chance of success :clap:

 

[trader30]

In relation to:

"a report from Cass Business School found that only 1 in 5 punters ends up a winner"

This entirely depends on how you classify a "winner". One winning trade? Opening balance lower than closing balance? In profit after first year?

There is absolutely no whay whatsoever that 20% of spread betting clients take more money out of the market than they put in. This would be closer to 2% at most. I wroked in the industry with full access to all of these stats for 5 years.

Financial Spread Betting atracts those with a gambling nature, usually without a job, or very low paid, who see "bankers" making millions and think they can do it by opening an account with there allowance. they usually live with their mums and wear trainers.

The ONLY people who regulary make money with spread betting with the companies that still exist out there are longer term swing traders who arent effected by the constant platform downtime and pip stealing / excess slippage etc associated with all SB firms.

As a successful trader once said to me, it takes 10 years or 10,000 hours to get good at something, same (almost) applies to trading. not sure who said that originally.

stick to your day job monkeys.

According to a survey:

http://en.wikipedia.org/wiki/Spread_betting#Mathematics_of_spread_betting

Dangers of financial spread bettingAccording to an article in The Times dated 10 April 2009 approximately 30,000 spread bet accounts were opened last year, and that the largest study of gambling in the UK on behalf of the Gambling Commission found that serious problems developed in almost 15% of spread betters compared to 1% of other gambling. In addition a report from Cass Business School found that only 1 in 5 punters ends up a winner. As noted in the report, this corresponds to the same ratio of successful punters in regular trading.

 

[Splitlink]

The main difference between financial spreadbetting and other betting methods is that the former gives the impression that it can be taught and that a career can be made out of it. Punters do, really, believe that they are not gambling, but most of them are.

It is a very dangerous game because of its plausibility. It looks so obvious on a chart. I feel that most losers hold their losses far too long and that is the danger that fixed odds gambling does not have.

 

[donaldduke]

In relation to:

"a report from Cass Business School found that only 1 in 5 punters ends up a winner"

This entirely depends on how you classify a "winner". One winning trade? Opening balance lower than closing balance? In profit after first year?

There is absolutely no whay whatsoever that 20% of spread betting clients take more money out of the market than they put in. This would be closer to 2% at most. I wroked in the industry with full access to all of these stats for 5 years.

Financial Spread Betting atracts those with a gambling nature, usually without a job, or very low paid, who see "bankers" making millions and think they can do it by opening an account with there allowance. they usually live with their mums and wear trainers.

The ONLY people who regulary make money with spread betting with the companies that still exist out there are longer term swing traders who arent effected by the constant platform downtime and pip stealing / excess slippage etc associated with all SB firms.

As a successful trader once said to me, it takes 10 years or 10,000 hours to get good at something, same (almost) applies to trading. not sure who said that originally.

stick to your day job monkeys.

Spread betting for day trading

Long term profitable DAY TRADING with a spread bet firm isnt going to happen.

You may get a winning streak once in a while, but overall you will churn and burn out.

Day trading with Direct Access to the exchanges is hard enough!, your chances with a spread bet firm are near 0.

If you do manage to beat the odds and are very selective in your day trades you might come out slightly ahead, but it wont be worth either the time or risk taken.

The only other way to make money day trading with a spread bet firm is to exploit some sort of weakness in the pricing, but those will be temporary and eventually get shut down.

Losing day traders who use buckets shops, will blame themselves, either say it is lack of discipline or not having the mental side covered etc, in reality they dont stand a chance regardless of how much they work on themselves.

 

[meanreversion]

Market is rig to make most of traders lose. If people is telling you that they are winning through futures is probably they trade in a team and trade in large volume.It is hard to let your winner run as during market off time...they will push your stop unless of course you don't even have a stop.,,,not forgetting the heavy commission you are paying your broker which cuts into your profits.

I rather you play other games which offer a much higher odds of success ....remember just play opp of the public and you have a much higher chance of success :clap:

Who rigs the market? Is there a committee which determines exactly what the $4 trillion FX market should do during the day in order to stop out all the SB punters betting £1 a point?

 

[Splitlink]

I do not believe that the market is rigged. Neither, do I believe that all SB firms are bent, although they have the strings tied pretty tightly. They do not have to be bent because the punter is going to lose, anyway, most of the time. If a punter loses most of the time then it is a matter of time before he gets cleaned out.

 

[happytrader8888]

This is absolutely ridiculous.

Please dont comment on things you clearly have no knowledge of.

Do you mind showing me your trading record to prove im wrong....im very much interested to learn from a pro like you.....if you are juz another poser wanne be who just paper trade pls don refute mine pt.

 

[happytrader8888]

I do not believe that the market is rigged. Neither, do I believe that all SB firms are bent, although they have the strings tied pretty tightly. They do not have to be bent because the punter is going to lose, anyway, most of the time. If a punter loses most of the time then it is a matter of time before he gets cleaned out.

I would say in this financial game...the one with the biggest bankroll wins they call e shot...else they wont be so many ppl losing in this market....they can paint a nice chart to entice ppl to buy their stocks while they are secretly distributing theirs to the unknowing public....i agree on this point "they do not have to bent because punter is going to lose anyway" cause they always knew how to manipulate e game to their advantage small punters will small bankroll confirmed will sure be wiped out in a matter of time...ppl who wins are those who knew their tricks and go inline with e banker.

Banker always win in e long run.