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Why Do More Than 90% of Traders Lose?

how about an informal poll of all those who make their living trading? all forms, day  

64 members have voted

  1. 1. how about an informal poll of all those who make their living trading? all forms, day

    • Yes
      40
    • No
      32
    • I don't make my living entirely from Trading, but it supplements my income.
      41


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Well said Loustrar1...Those are great points. Those of us who have made it aren't heard by those who want the quick fix....I teach and coach trading and have to say that I lose a lot of clients when I tell them it will take time and effort and there is NOT a quick fix. The truth is not what most want to hear. Sadly. I have much better success with those that have not already be programmed by the courses that tout "work from home in your underwear for 30 minutes a day and live the life of your dreams"...

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...Hello and thanks for starting this topic.

 

Not wanting to work hard in order to have their financial dreams leaves them in a mindset that makes them easy prey for the hucksters that promise riches beyond their wildest dreams with a few clicks of the mouse.

....

My question is this -- >> What EXACTLY are the 10% that win consistantly doing? -- And why aren't we talking about that?

 

amen Loustar. all great points.

 

i'd like to put your "riches beyond dreams" into a real perspective.

years back, in my search for the holy grail, i attended a presentation on a well know software system. over 100 "traders" attended.

 

the product developer showed how to turn $1,000 into over $10,000,000 using his product. the strategy was simple...buy and sell on signals and re-invested 100% of gains. (compounding the ROI). as the gains piled up, so did the number of shares purchased. at the end of the demonstration i asked him two questions... #1"how can you buy over 2x the average volume and not move the market? ...#2 what was the max open drawdown?

answer #1..."this is just an example..yada, yada, yada."

answer #2...40% drawdown.

 

i sat down, turned to the guy sitting next to me and asked "could you sleep at night with those DDs?" he said..."IF i'm GOING to make 10 million, i'm not going to worry about the DD.

 

thanks for sharing,

peter.

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amen Loustar. all great points.

 

i'd like to put your "riches beyond dreams" into a real perspective.

years back, in my search for the holy grail, i attended a presentation on a well know software system. over 100 "traders" attended.

 

the product developer showed how to turn $1,000 into over $10,000,000 using his product. the strategy was simple...buy and sell on signals and re-invested 100% of gains. (compounding the ROI). as the gains piled up, so did the number of shares purchased. at the end of the demonstration i asked him two questions... #1"how can you buy over 2x the average volume and not move the market? ...#2 what was the max open drawdown?

answer #1..."this is just an example..yada, yada, yada."

answer #2...40% drawdown.

 

i sat down, turned to the guy sitting next to me and asked "could you sleep at night with those DDs?" he said..."IF i'm GOING to make 10 million, i'm not going to worry about the DD.

 

thanks for sharing,

peter.

 

turn $1000 to $10mil? Is that larry william?

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They say that 95% of traders lose.

I think that there are several reasons:

  1. No knowledge and no experience
  2. Desire to earn a million after the first trade with a 100 USD deposit
  3. Lack of ability to close a losing trade

 

Loustar1 offered to discuss those traders who win and how they manage to do it, why not discuss it?

Why do we always discuss the experience of unlucky traders instead of trying to get a bit of knowledge and luck of those who do know how to trade?

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They say that 95% of traders lose.

I think that there are several reasons:

  1. No knowledge and no experience
  2. Desire to earn a million after the first trade with a 100 USD deposit
  3. Lack of ability to close a losing trade

 

Loustar1 offered to discuss those traders who win and how they manage to do it, why not discuss it?

Why do we always discuss the experience of unlucky traders instead of trying to get a bit of knowledge and luck of those who do know how to trade?

 

Well, by design, wouldn't you expect 95% of the responses to be about why they lose?

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They say that 95% of traders lose.

 

Loustar1 offered to discuss those traders who win and how they manage to do it, why not discuss it?

 

Why do we always discuss the experience of unlucky traders instead of trying to get a bit of knowledge and luck of those who do know how to trade?

 

EXACTLY...

we generate the results we believe we deserve.

peter.

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Hello, I'm new to the forum turned up here to aspire help and your moral hearts.

 

From the looks of your picture, I would run and hide if I were you. In a few days your friend is going to betray you to the authorities and you will be put to death by Friday. In a couple of thousand years people will doubt you ever existed. It's not worth it. RUN!

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Really, any career path that has scalable has a very low success rate. 1% of all the traders make 99% of all the money, the rest are simply perpetual losers.

 

Tim

Your contribution is worth exactly 1%

bobc

"another enemy"

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Com'on Mouse ,make a contribution , not a snide remark.

bobc

"another enemy"

 

I do not agree with the statistic. since there is no exit poll to get an accurate stat for overall winners and loses in the market.

 

Secondly, what makes a loser? if someone is trading futures, which are highly leveraged, and he loses 5k and never trades again. Is he a loser? Technically yes, but does it really say something about how hard trading is as the 90% BS stat would lead you to believe?

 

I think trading is considerably easier than most people think. I also think that it isn't as lucrative as people think. I also think it is foolish to assume that all the winnings end up in the accounts of a few.

 

Those are my contributions.

 

If you read closely, there is a positive message there.

 

 

MM

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I do not agree with the statistic. since there is no exit poll to get an accurate stat for overall winners and loses in the market.

 

Secondly, what makes a loser? if someone is trading futures, which are highly leveraged, and he loses 5k and never trades again. Is he a loser? Technically yes, but does it really say something about how hard trading is as the 90% BS stat would lead you to believe?

 

I think trading is considerably easier than most people think. I also think that it isn't as lucrative as people think. I also think it is foolish to assume that all the winnings end up in the accounts of a few.

 

Those are my contributions.

 

If you read closely, there is a positive message there.

 

 

MM

Well done Mouse

A positive contribution, especially the assumption that all our money does not ends up at Goldman Sachs

.As you say , its not that hard, and not that lucritive.

But its better than bricklaying.

bobc

"new friend"

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I haven't read this entire thread but a lot of the good stuff early on.

 

I don't think there's any question that most traders will not succeed. But I would never let that stop me. When I went to school, most of the rest of the kids there got worse grades than me -- a few got better. Same goes for college, and then into my career. I've seen plenty of people do poorly in any endeavor - not just trading.

 

To me we MUST have losers for the rest of us to do well. If it was so easy everyone would be doing it right? Is it our fault that so many are just ultra lazy and expect money and profits to be handed to them? They blame the brokers, the services, the courses, whatever when in reality you'd get a lot further if you took responsibility and blame yourself for your losses.

 

I truly feel if some is willing to work harder than they ever expected, stay incredibly stubborn in their desire, and forget looking at this as get rich quick it really doesn't ultimately have to end in failure.

 

It just will for most.

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put a bunch of highly educated people into a room - lets guess they are all lawyers, doctors, bankers, academics etc; people who might have more idea than your average punter :)

Tell them that 50% of the people in the room are below average intelligence for the room.

watch the incredulous looks and denials that 1) this is true, and 2) each individual will believe they are above average.

There are always winners and losers depending on the measure.

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I consider myself a successful trader, but I am not full-time. I am a software engineer, but have an automated trading system that I busted my ass on for about 2 years. Been running since 2008 (started with $30K) and slowly added more and more money as I proved to myself (to the best of my ability--via backtests and forward tests) that what I'm doing actually works.

 

MightyMouse said the following: "I also think that it isn't as lucrative as people think". I think I'm starting to slowly agree with that statement as I've been doing this successfully now for more than 3 years. The jury is still out on this, so time will tell.

 

Now, just a little background. I tried to trade (as a hobby) for 10-15 years and pretty much just pissed money away year after year after year. I blew up badly once when I lost $27000 in about 1 hour. I had a 2nd blow-up, but it wasn't as bad.

 

After many years, I finally had a "trading breakdown" when I went through some serious emotional anguish over the fact that I was a "trading failure". I finally faced myself that I couldn't trade my ass for a hole in the ground and decided to buckle down and start to use my software development skills to mine data and look for some semblance of profitability in the markets.

 

I did this for many, many months and thought I had finally discovered something that may (just may) work. Once I started acting on this strategy with real money, I found out over the course of a couple months that I was wrong. It was through this (much more disciplined) approach that I stumbled onto what I'm doing now. But this next step took more than a year of concerted effort (on my part) where I sacrificed one hell of a lot of family time and busted my ass constantly until I finally "cracked the nut".

 

I still had a long way to go, but I finally had the underpinnings of something that seemed to work. I worked another solid 1 to 2 years honing and tweaking my strategy to what it's become today. Even with all of this blood, sweat and tears, I only have a winning strategy that has an EV of .10 and this is all I've got!!!!!! One automated strategy that supplements my income.

 

My desire (of course) is that this will eventually replace my income and I finally think I'll truly get there, but I'm not counting my chickens until my trading consistently brings in north of $200K per year (for at least two years).

 

Jason

 

Here are two charts of my actual profitability since the inception of my automated trading back in 2008. Not a ton of money, but I'm pretty damned proud of it!!!!!

 

Daily Results

http://postimage.org/image/2xst806mc/

 

Trade by Trade Stats

http://postimage.org/image/2xs2rempw/

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