How often does everyone win?

[ERJ]

I have always wondered how many traders actually win. i hear from other resources that the majority of home traders lose, is this the case?

Thank you

 

[ardhill]

maybe it would be a better idea to give some sort of guide - maybe % for these levels i.e. what is the difference between often and most of the time, or between sometimes, barely ever?

 

[RUDEBOY]

ERJ, the censensus is that most lose, whatever the percentage is over any given time i don't know.

 

[donaldduke]

Its reckoned 95% of traders lose money. (The figures 80%,90%,99% are also sometimes quoted).

Of the 5% that make money, its reckoned that that the majority are right between 35%-50% of the
time (ie between 35-50% of their trades are profitable).

However some succesfull traders claim they have a win rate of between 60-75%.

Some losing traders even claim to make money 90% of the time, but lose so much 10% of the time
that they end up being net losers.

 

[Trader333]

I have known of traders who could win around 90% of the time but still end up net losers and all because they would take profits too early and cut losses too late.

As an example you could win say 1 point 90% of the time but then lose 10 points 10% of the time. So this would equate to (90 x 1) - (10 x 10) = -10 points and this does not factor in commission costs.

In my view the important issue is Profit Factor, ie what is the ratio of profit to loss that you make multiplied by the percentage wins. So you could have a win rate of 40% and a profit factor of 2 to 1. So in 10 trades this would equate to the following:

(4 x 2) - (6 x 1) = +2 points over 10 trades minus any commission of course but this does illustrate that the focus should not just be on percentage of wins.


Paul