Tradeciety

Hello, I had the same question after everyone kept mentioning the number 95% all across the web so we started our own research and evaluated numerous scientific papers and we found that the statement that 95% of all traders lose is a myth. But the actual numbers is much higher. We went through a number of different research papers and found that the statistics economic scientists found are very depressing and show that less than 1% of traders can actually make money. Here are a few more statistics that we extracted from some scientific papers of researchers who analysed individual broker data. 1. 80% of all day traders quit within the first two years. 2. Among all day traders, nearly 40% day trade for only one month. Within three years, only 13% continue to day trade. After five years, only 7% remain. 3. The average individual investor under performs a market index by 1.5% per year. Active traders under perform by 6.5% annually. 4. Day traders with strong past performance go on to earn strong returns in the future. Though only about 1% of all day traders are able to predictably profit net of fees. 5. Day traders even continue to trade when they receive a negative signal regarding their ability. 6. Profitable day traders make up a small proportion of all traders – 1.6% in the average year.However, these day traders are very active – accounting for 12% of all day trading activity. 7. Among all traders, profitable traders increase their trading more than unprofitable day traders. 8. Poor individuals tend to spend a greater proportion of their income on lottery purchases and their demand for lottery increases with a decline in their income. 9. Investors with a large differential between their existing economic conditions and their aspiration levels hold riskier stocks in their portfolios. 10. Men trade more than women. And unmarried men trade more than married men. 11. Poor, young men, who live in urban areas and belong to specific minority groups invest more in stocks with lottery-type features. 12. Within each income category, gamblers under perform non-gamblers. 13. Investors tend to sell winning investments while holding on to their losing investments. 14. Traders sell winners at a 50% higher rate than losers. 60% of sales are winners, while 40% of sales are losers. 15. Trading in Taiwan dropped by about 25% when a lottery was introduced in April 2002. 16. During periods with unusually large lottery jackpots, individual investor trading declines. 17. Investors are more likely to repurchase a stock that they previously sold for a profit than one previously sold for a loss. 18. An increase in search frequency [in a specific instrument] predicts higher returns in the following two weeks. 19. Individual investors trade more actively when their most recent trades were successful. 20. Traders don't learn about trading. “Trading to learn” is no more rational or profitable than playing roulette to learn for the individual investor. 21. The average day trader loses money by a considerable margin after adjusting for transaction costs. 22. [in Taiwan] the losses of individual investors are about 2% of GDP. 23. Investors overweight stocks in the industry in which they are employed. 24. Traders with a high-IQ tend to hold more mutual funds and larger number of stocks. Therefore, benefit more from diversification effects.