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

The truth is that 90% of retail traders lose money and only 10% of traders make a profit and see any green. So statistically from a narrow and negative point of view your chances of success are slim at best.

But as with most things in life with a different and more positive perspective towards the task of creating wealth through online trading it’s entirely achievable.

Firstly why is it that you wish to trade and obtain money? This question is key as it will affect the core of your entire being. What separates winners from losers is often intent. Intent will give you the energy to persevere and learn from your mistakes rather than feel sorry for yourself.

Once you have clarity and believe in your purpose the rest is plain sailing. The majority of people in life say they want to win but have no real intent on making success happen. These kind of people secretly deep down just wish to please their family and friends and have to no real desire and ambition to succeed, they like to follow the herd instead of thinking of their own happiness and desires. They will never walk with the gods.

An open mind filled with positive intent will learn much faster than a closed mind expecting a negative outcome. We are not all born equal and the same can be said of the desire to win.

Listen and have belief in yourself and you will be in that 10% bracket making a profit. Ask yourself if you really want it, I mean really want it, if not walk away and stop filling your head with daydreams.

Money comes from success and to those who deserve it, which means you have to work for it. You should understand that success boosts self esteem and confidence not money. Money is simply the reward we get for our efforts.
Money does not buy that house, car or designer wardroom it’s success that does. Think about it? Success equals money not the other way around.

Most traders fail as they take far too much risk as they never think to consider this and make decisions based purely on the desire for money becoming gamblers rather than traders.

Desire the trappings of success and the great life success can bring and detach yourself from money. To survive in a game that’s all about the money it’s a good idea not too worship it too much.
 
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trendie

Legendary member
On the face of it, thats a good post.
But, all the "believing", "deservedness", "positive intent" and "open-mindedness" is no substitute for some conception of the underlying market structure, and a viable trading plan with a quantifiable edge.
And some nerves of steel wouldnt go amiss.

For some reason, I thought your post had the undercurrent of "law of attraction" about it.
 

zaysev36

Well-known member
So, you basically say that guys who randomly trades usually lose and those few who trade using analyzis and statistics - usually win. Big deal?
 

dbphoenix

Legendary member
So, you basically say that guys who randomly trades usually lose and those few who trade using analyzis and statistics - usually win. Big deal?

Pretty much.

Db
 

TexasRangersFan

Active member
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.
 

dbphoenix

Legendary member
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.

Db
 

tomorton

Legendary member
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.
 

Forexmospherian

Legendary member
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


F
 

Fugazsy

Veteren member
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.
 

dbphoenix

Legendary member
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.

Db
 

forker

Senior member
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.
 

dbphoenix

Legendary member
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.

I agree with most of your points but disagree on the best route to get there. One needn't be a flagellant in order to reprogram himself. It starts with study and observation, then practice and testing. Trading without any sort of plan is more likely to reinforce everything that's wrong with one's approach.

For details, see the article I wrote on fear.

Db
 

forker

Senior member
I agree with most of your points but disagree on the best route to get there. One needn't be a flagellant in order to reprogram himself. It starts with study and observation, then practice and testing. Trading without any sort of plan is more likely to reinforce everything that's wrong with one's approach.

For details, see the article I wrote on fear.

Db


you can only deal with fear by taking it by the horns. You don't facilitate deprogramming through observing and practice. I think of myself as an average guy and as such i found no success in deprogramming myself through observation and practice. I only gained strategies through that approach and strategy is only half of what it takes to succeed in the long run. Everyone observes and practices but why does so many fail following this path?

being an average Joe, turning things on its head and interacting with the market in a way that goes against all my beliefs; opened new doors. I am sure many people trying to make it in this business will agree that observation and practice has not yielded consistent results. In my opinion, this is directly related to their programmed thought process.
 

dbphoenix

Legendary member
you can only deal with fear by taking it by the horns. You don't facilitate deprogramming through observing and practice. I think of myself as an average guy and as such i found no success in deprogramming myself through observation and practice. I only gained strategies through that approach and strategy is only half of what it takes to succeed in the long run. Everyone observes and practices but why does so many fail following this path?

being an average Joe, turning things on its head and interacting with the market in a way that goes against all my beliefs; opened new doors. I am sure many people trying to make it in this business will agree that observation and practice has not yielded consistent results. In my opinion, this is directly related to their programmed thought process.

They fail because they don't observe correctly and therefore practice the wrong things. Practice doesn't make perfect unless one is practicing the correct things, whether trading or a forehand. If one keeps practicing the wrong things, he is reinforcing the wrong behaviors. And thus continues to fail.

I've been working with beginners for quite some time now and they rarely are able to observe without obsessing over where to enter. If they do enter, they then obsess over their entry rather than focus on what traders are doing and how and where and when they're doing it. This invariably leads to exiting at the wrong time.

All of which is why this is so easy for children.

Db
 

forker

Senior member
They fail because they don't observe correctly and therefore practice the wrong things. Practice doesn't make perfect unless one is practicing the correct things, whether trading or a forehand. If one keeps practicing the wrong things, he is reinforcing the wrong behaviors. And thus continues to fail.

I've been working with beginners for quite some time now and they rarely are able to observe without obsessing over where to enter. If they do enter, they then obsess over their entry rather than focus on what traders are doing and how and where and when they're doing it. This invariably leads to exiting at the wrong time.

All of which is why this is so easy for children.

Db

Any person of reasonable intelligence would know through practice and observation that they did something wrong and they should do it differently the following time. You put your hand in the fire once and you know next time to rather put it to the side. So to say that people don't observe correctly is appropriate on the first instance and insulting thereafter.

I spent years trying to tune my observations and in the end i realised my problem was not my observations but rather my attempts to rectify them on future trades. This logic only results in an overly complex rule system that makes trading even more difficult. This is why, as you say, children find it easy. They cannot follow a complex rule system and trade it as they observe it.

I have to say that i disagree with you on your point where its a case of observing incorrectly and requiring practice. Every instant in a market is unique and thus practicing in reality is trying to apply logic based on infinite instances of an observation. We don't know what is going to happen next so how is practicing going to change that? (it isn't)

Going back to children, which is a very good example of someone that hasn't been programmed; they trade it as they see it without fear or tunnel vision from a bias. They don't need to practice because they observed once and apply the same logic to every instance that fits the profile of that observation. An adult of reasonable intelligence should be able to replicate; so why can't they?

how can practicing infinite variations of an observation, when each instance is unique and the outcome unknown going to help? you can't! practice is not going to change your belief and in my opinion it will only make it worse because each instance is different and you end up questioning every move you make and end up giving up. The only way you are going to equip yourself like a child is to deal with what really matters. There are probably many ways to do it but for me, and i am sure it could be the same for others as i am not unique, is to put your hand in the fire every time.
 
 
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