Why do so few succeed?

[CityTrader]

Why do so many people expect to succeed?

If I could become an architect or dentist without any further education or experience, would I expect to be sucsessful? highly unlikely - so why on earth do inexperienced people who never had the urge to work as traders in a Bank or other established career path, expect to be able to drop their existing jobs ( normally seems to be IT people?) and become good traders? Even if you had the urge early on in your career, surely the fact that you were never offered a job as a trader if you applied should tell you all.

I applaud your determination, but really, really question your lack of skill & experience to ever succeed. Sorry fella's but no amount of coaching, belief or systems are going to help you, and you are incredibly naive to believe otherwise. Sorry. But it had to be said.

 

[Trader333]

Why do so many people expect to succeed?

In my view this is all to do with "Barriers to Entry" If you wish to become a Doctor or Architect then you cannot decide to do so one day and start practicing the next, ie the barriers to doing so are considerable. Whereas with trading you can and because of this many people expect that they can succeed at it with the same ease in which they were able to start practicing placing of trades.


Paul

 

[Splitlink]

Why do so many people expect to succeed?

I applaud your determination, but really, really question your lack of skill & experience to ever succeed. Sorry fella's but no amount of coaching, belief or systems are going to help you, and you are incredibly naive to believe otherwise. Sorry. But it had to be said.

Your pessimistic post is, nevertheless, true in the majority of cases and the only hope a new
trader has is to trade with very small amounts at first so as not to be forced out of the game for lack of funds.

Split

 

[SOCRATES]

You ought not say those things to them, the pair of you, they don't like it you know...see what I mean ?


It is better to say anyone can have a go, but there is a naughty turnstile.....that is..... a naughty turnstile you have to watch out for if you decide to do it for real before you are ready, or something along those lines, much better, it might be more....you know.....suitable.

And on Monday morning, the games again.

 

[PKFFW]

Why do so many people expect to succeed?

If I could become an architect or dentist without any further education or experience, would I expect to be sucsessful? highly unlikely - so why on earth do inexperienced people who never had the urge to work as traders in a Bank or other established career path, expect to be able to drop their existing jobs ( normally seems to be IT people?) and become good traders? Even if you had the urge early on in your career, surely the fact that you were never offered a job as a trader if you applied should tell you all.

I applaud your determination, but really, really question your lack of skill & experience to ever succeed. Sorry fella's but no amount of coaching, belief or systems are going to help you, and you are incredibly naive to believe otherwise. Sorry. But it had to be said.

At the expense of being ridiculed by Soc and yourself, what makes you think the only determination of success as a trader is to be offered a job by a bank?

I agree that it seems many come to the trading game thinking it is going to be far easier than it actually is. They begin trading, myself included I must admit, with far too little knowledge and practice. However, this does not mean it is a skill that can not be learnt.

Every trader learns the skill at some stage from somewhere. No one is born knowing about S&R, trendlines, MACD, discipline, backtesting, etc etc. They learn it somewhere. So your suggestion, in particular, that no amount of coaching is going to help anyone is patently false. Your example of bank traders is proof. All bank traders that I know of started out learning the skills and being trained by another at some point in their career. IE: being "coached".

Personally I think one of the main reasons so many people fail is because those with true knowledge have a vested interest in keeping it that way. I'm not talking about some golden key or secret system. I'm just talking about the basic skills needed to successfully trade the markets. As we all know, where do the 5% sucessful traders get their money? From the 95% unsucessful traders. It is in their own best interests to ensure that the masses do not become successful traders. This is why it is so easy to find worthless crap regarding trading and comparatively difficult to find the few nuggets here and there of worthwhile information. On top of that you then have the peripheral industry that makes its' money by feeding the masses the dream that it is an easy way to make money so you have a constant supply of new unsuccessful traders to take the places of those that bust out. When this dream does not eventuate in easy millions your average punter is going to give it away because he/she does not want to do the hard work it really takes to become successful at the game.

The above is not meant as a condemnation of those who have become sucessful. It is simply a statement of fact. Even despite all that, it is still a skill that can be learnt with perserverance, practice, determination and patience. If this were not the case there would never be another successful trader because he/she would never be able to learn the skills needed.

Cheers,
PKFFW

 

[Splitlink]

Personally I think one of the main reasons so many people fail is because those with true knowledge have a vested interest in keeping it that way. I'm not talking about some golden key or secret system. I'm just talking about the basic skills needed to successfully trade the markets. As we all know, where do the 5% sucessful traders get their money? From the 95% unsucessful traders. It is in their own best interests to ensure that the masses do not become successful traders. This is why it is so easy to find worthless crap regarding trading and comparatively difficult to find the few nuggets here and there of worthwhile information. On top of that you then have the peripheral industry that makes its' money by feeding the masses the dream that it is an easy way to make money so you have a constant supply of new unsuccessful traders to take the places of those that bust out. When this dream does not eventuate in easy millions your average punter is going to give it away because he/she does not want to do the hard work it really takes to become successful at the game.


Cheers,
PKFFW

It is that 95% that I was talking about. It is a terrible failure rate and the main reason that they lose is not because they don't know what they are doing, but because they allow emotions such as greed and fear into the equation.

a. Greed. Adding more money after a success, when they should be patiently accumulating.

b. Fear. Telling oneself that the market will turn after the price has fallen too far. That is a kind of hypnotism similar to that of a rabbit looking at headlights. This is very important, in my view.
If you have your 100 pounds capital divided into 10 pounds per trade you must remember that, if you disobey that rule, you are removing capital meant for your next trades. When I hear that "I think it will come right" expression I know that that trader is another one for the bone yard. Get rid of that attitude right away- believe me, I've been there but I was one of the ones that had my 1000 pounds divided into 100 lots at 10 per trade and have survived.

This has been repeated so many times and it must be continually repeated for the benefit of newcomers. It will be said that the same, old, stuff is being trundled out but I don't believe there is anything else that is so important as the Cold, Calm and Collected attitude to trading. Dominate emotions and you will become a survivor. The trading "edge" will come with practice.

Split

 

[CityTrader]

Every trader learns the skill at some stage from somewhere. No one is born knowing about S&R, trendlines, MACD, discipline, backtesting, etc etc. They learn it somewhere. So your suggestion, in particular, that no amount of coaching is going to help anyone is patently false. Your example of bank traders is proof. All bank traders that I know of started out learning the skills and being trained by another at some point in their career. IE: being "coached".



Cheers,
PKFFW

I'm not here to ridicule anyone. But my point is, that most sucessful traders have been "coached" at a bank in full time employment for 10 years before they are decent trader. Not 1 or 2 hours a week for 3 months, nor 5 hours on a seminar.
As I've said before, if anyone is dumb enough to believe that ANY system will make them money, then there would be no market to trade in. The system would have ben honed and devolped by the Morgan Stanley, Deusche banks and Goldmans of the world- until it was foolproof- then of course nobody would ever sell, as every trader would have the same foolproof "buy signal" i.e it is impossible.

CT

 

[new_trader]

The system would have ben honed and devolped by the Morgan Stanley, Deusche banks and Goldmans of the world- until it was foolproof- then of course nobody would ever sell, as every trader would have the same foolproof "buy signal" i.e it is impossible.

CT

Doesn't this more or less contradict what you say? The fact that the market moves up and down means that traders are acting on different buy and sell signals. If all the "professionals" are buying when all the "idiots" are selling, which way will the market move?

 

[TheBramble]

CityTrader, I understand and partially agree with what you're saying. You'd imagine you're more likely to get a successful trader come out the end of a professionally directed and managed trading environment, complete with coaching, mentoring, support, funds, infrastructure, analysis, research and having done so for 10 years, 12-16 hours a day, your chances of consistent success are going to be considerably higher than some IT bod who has just decided to spreadbet his/her £500 life savings after attending a 'Reap-the-Reward' seminar by Warren Dinters.

But...

When you look at all the resources the banks pour into nurturing and training their traders, and how few stay the course and end up 'successful' you need to compare that with those independents who have done as well. Difficult data to come by I know, but on personal experience, I'd say independents that DO make it are far more effective in their approach and performance, albeit generally on a smaller scale.

Check out where the banks make their profits - is it trading or on services? It's the latter for almost all of them.

I guess to summarise my point, if you have a choice between being tutored by a bank or a consistently successful independent, I'd go with the latter.

Just my 2p-th.

 

[TraderPattern]

I hasten to add that I am, on this occassion, in significant agreement with the analysis of TheBramble, who has been bold and correct in the assertion that, given a choice between the two, it is probably more effective to be honed in the nuances of successful trading by the latter (namely a successful independent) than the former (namely an individual who has received his tutelage at a bank).

 

[CityTrader]

CityTrader, I understand and partially agree with what you're saying. You'd imagine you're more likely to get a successful trader come out the end of a professionally directed and managed trading environment, complete with coaching, mentoring, support, funds, infrastructure, analysis, research and having done so for 10 years, 12-16 hours a day, your chances of consistent success are going to be considerably higher than some IT bod who has just decided to spreadbet his/her £500 life savings after attending a 'Reap-the-Reward' seminar by Warren Dinters.

But...

When you look at all the resources the banks pour into nurturing and training their traders, and how few stay the course and end up 'successful' you need to compare that with those independents who have done as well. Difficult data to come by I know, but on personal experience, I'd say independents that DO make it are far more effective in their approach and performance, albeit generally on a smaller scale.

Check out where the banks make their profits - is it trading or on services? It's the latter for almost all of them.

I guess to summarise my point, if you have a choice between being tutored by a bank or a consistently successful independent, I'd go with the latter.

Just my 2p-th.

I dont disagree, in fact I think you're actually emphasising my point! - The banks have a natural selection process where by the weak get fired in the annual cull. Thus those who do make it, are perhaps even better than would otherwise be expected ?

CT

 

[barjon]

I think the kernel of what CT says has to be true, albeit that self-coaching is a viable route. But it will take many, many hours of hard work (smart work, db ) to arrive at consistent success.

A 95% failure rate is no surprise in a profession which is unusual in that totally inexperienced and untrained amateurs can "have a go". Imagine the failure rate if anyone "had a go" at open heart surgery or drawing up a water-tight legal contract.

Trading is unusual, too, in that success - for a time - can arrive for the inexperienced and untrained which helps convince that there is a system or some other key that turns the trick. A bit like horse racing - I had a super day at Newbury last week backing the highest rated horse in my daily paper - ah, money for old rope, that's the system for me :cheesy: .

good trading

jon

 

[new_trader]

A 95% failure rate is no surprise in a profession which is unusual in that totally inexperienced and untrained amateurs can "have a go". Imagine the failure rate if anyone "had a go" at open heart surgery or drawing up a water-tight legal contract.

Trading is unusual, too, in that success - for a time - can arrive for the inexperienced and untrained which helps convince that there is a system or some other key that turns the trick. A bit like horse racing - I had a super day at Newbury last week backing the highest rated horse in my daily paper - ah, money for old rope, that's the system for me :cheesy: .

good trading

jon

I also think it's to due to unrealistic expectations. Your analogy with heart surgery is good, however most people would understand that it is a matter of life or death. Do the failures initially go into trading with the same frame of mind?

 

[new_trader]

The banks have a natural selection process where by the weak get fired in the annual cull.
CT

So does the market. "Survival of the fittest" some would say. The weak quickly blow their trading accounts and never return.

 

[TheBramble]

I dont disagree, in fact I think you're actually emphasising my point! - The banks have a natural selection process where by the weak get fired in the annual cull. Thus those who do make it, are perhaps even better than would otherwise be expected ?

We're agreeing that those who make it, have made it!

The banks do have a natural selection process - as does The Market.

What I believed you were previously stating was that ONLY those previously/currently tutored in trading through professional organisations were going to be successful. My point was that there are those who have been independent in their trading education and development and have reached a level of consistent success. I have no idea of the balance of numbers in these two classes, but professional (bank) training is not the only way.

I also agree (there's a lot of agreeing going on today, bad sign) those who do make it represent a screamingly small percentage of those who start out. We see 95% and 97% bandied about, but who knows? My sense is that it is far, far higher (failure wise) than that.

 

[timsk]

Why do so many people expect to succeed?

CityTrader,
The point you made in your post is very good and the the question posed is one that everyone would be wise to answer for themselves, IMO. When things are going badly for me, the negative demons surface asking this very question - in various forms. Such as . . .
- 'How will you ever get anywhere just spending an hour of two per day staring at charts'?
- 'How do you expect to compete with with highly skilled pro's with their deep pockets'?
- 'Your knowledge base and understanding of the markets is too thin to be successful'!

The list goes on, but the 'neggies' are all variations questioning the premise that, one day, I expect to be successful. To shut these little buggers up and to dis-empower them, I have various positive affirmations which help to restore my self confidence and belief . . .
- Intellect is not a barrier to success. I am of average intellect , therefore I can succeed.
- Trading success can be learnt, as proven by Richard Dennis and the Turtles. I can learn.
- I have access to the necessary resources to learn what I need to know from books, T2W etc.
- There is no right or wrong way to trade in so far as 'one trader's meat is another trader's poison'. In other words, there's room for little ol' me in there somewhere!
- It's not necessary to have the info', resources, skills and qualifications of the pro' traders who work for the banks, in order for me to have my tiny slice of the pie. If it were necessary, no independent retail traders would succeed.
- Others in circumstances similar to mine are successful, so I can be too.
- In a nutshell, it ain't easy - far from it - but it is doable.

Tim.

 

[the blades]

I dont disagree, in fact I think you're actually emphasising my point! - The banks have a natural selection process where by the weak get fired in the annual cull. Thus those who do make it, are perhaps even better than would otherwise be expected ?

CT

Pardon my ignorance here CT, but isn't the failue of the vast majority of unit / investment trusts, run by the banks etc, contrary to the suggestion that the cream of the crop work for them?

UTB

 

[Splitlink]

Pardon my ignorance here CT, but isn't the failue of the vast majority of unit / investment trusts, run by the banks etc, contrary to the suggestion that the cream of the crop work for them?

UTB

Does the vast majority fail? I didn't know that, there are some nice looking ones on my data base that I wish I had bought at the right time. I didn't buy them because I have been reading about how badly they were managed! Maybe there is a lesson there for me, not to take too much notice of what I read in the papers and the various boards.

Nevertheless, you are probably right in assuming that they are not all managed in a proper way, but, partly, I believe that the fault lies in the fact that they are limited to the sector in which they trade and by the percentage that they are allowed to own of any one company. Therefore, with the millions that they have to invest they are not so likely to worry about the smaller capitalised companies, leaving the way open for individuals who can use their initiative on the amount that can be bought.

Personally, I am not worried about professional competition as there is not much point. I am a trader and that's that. I have to live with what there is or get out. Emotion and money control is what has to be dominated in the markets and most of the blame that we attache to other factors, be they professional traders, SB company bias, or whatever are, really, because we do not want to blame ourselves for trading badly.

Split

 

[Pat494]

Pardon my ignorance here CT, but isn't the failue of the vast majority of unit / investment trusts, run by the banks etc, contrary to the suggestion that the cream of the crop work for them?

UTB

Although I agree there is a cull at financial institutions - I think it's far from the case, that it's only the less able that are fired. Politics is rife in ALL companies. Small cliques always form - often brown-nosing their way up the ladder but with little ability. What I'm trying to say is it's not the end of the world getting fired by big companies. Managers dare not promote people more able than themselves for obvious reasons. So after a few decades the big companies get managed by the very people who should have been fired but weren't for other reasons.
Don't necessarily agree with one's critics unless it's true.

 

[the blades]

Does the vast majority fail? I didn't know that, there are some nice looking ones on my data base that I wish I had bought at the right time. I didn't buy them because I have been reading about how badly they were managed! Maybe there is a lesson there for me, not to take too much notice of what I read in the papers and the various boards.
Split

Hello Split,

Over the last 3 years, only 32 of 217 unit trusts in the UK all companies group outperformed the FTSE all share index - rubbish

Each year, there's a few that generate impressive returns. However, investing in last years best performers is a well known road to the poor house. Few are consistantly impressive - though some are.

Until the last few years I invested 90% of my money in unit / investment trusts, until I realised that my simple mechanical system following was outperforming the vast majority of them - hence my interest in City traders quote;

As I've said before, if anyone is dumb enough to believe that ANY system will make them money, then there would be no market to trade in.

Cheers,
UTB