Response to "Please, 95% of traders don't lose their accounts!" | Forex Factory

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Response to "Please, 95% of traders don't lose their accounts!"

  • #1
  • First Post: Nov 13, 2007 2:17am Nov 13, 2007 2:17am
This is in response to: http://www.forexfactory.com/showthread.php?t=54985

Surely none of (1) the exact percentage; (2) what precisely consititutes a "trader"; or (3) how many accounts each individual blows before he quits, really matters.

The obvious point is that a very high percentage of those who attempt trading quit before they reach the point where they make profit consistently.

I don't understand the need to argue semantics.

David
  • #2
  • Nov 13, 2007 2:57am Nov 13, 2007 2:57am
They say an artist is anyone who calls himself an artist. Maybe it's the same for traders. A "chartist" is anyone who calls himself a "chartist".

It also turns out that, much like artists, most traders are poor as sh*t until they die .

The parallels are striking.
  • #3
  • Nov 13, 2007 3:08am Nov 13, 2007 3:08am
Quoting hanover

I don't understand the need to argue semantics.

David
IMHO the point was to say, paraphrased "If you refuse to do what everyone who (as a trader) IS making money says to do in order to make money, you can't call yourself a trader, nor can you count yourself as a trader that failed.
You never were a trader in the first place; you never did what REAL traders do(you fail to meet the criteria / requirements for this status). Buying a pilot uniform will not make you a pilot, opening a trading account will not make you a trader."

And if that's so, then I wholeheartedly agree and recent related "fights" over what's what to me just prove his point (refusal and denial never really were synonymous with progress, achievement and success). You can't refuse to actually do what people say is a requirement and then say it never worked for you without having ever properly done it / followed through.

And those that do, start to realize; they stop arguing, and start progressing.
Trust price. Know yourself.
  • #4
  • Nov 13, 2007 3:30am Nov 13, 2007 3:30am
I agree; it's obviously about beginners, not people who've been trading for decades!


Quoting hanover
This is in response to: http://www.forexfactory.com/showthread.php?t=54985

Surely none of (1) the exact percentage; (2) what precisely consititutes a "trader"; or (3) how many accounts each individual blows before he quits, really matters.

The obvious point is that a very high percentage of those who attempt trading quit before they reach the point where they make profit consistently.

I don't understand the need to argue semantics.

David
  • #5
  • Nov 13, 2007 3:49am Nov 13, 2007 3:49am
Buying a pilot uniform doesn't make you a pilot, but that's not really analogous to opening a trading account. The trading analogy to that would be to buy a trader's uniform (which I believe is boxer shorts and slippers).

A better analogy would be to try flying a plane without instruction and then crashing it. Would that make you a failed pilot?

For what it's worth, Merriam-Webster defines a trader as "a person who buys and sells (as stocks or commodities futures) in search of short-term profits". It does NOT mention any skills or success rates as prerequisites.

It also defines a pilot as "a person who flies or is qualified to fly an aircraft or spacecraft", so it specifically mentions REQUIRED QUALIFICATIONS a person needs to call himself a pilot...

So, a trader is ANYONE WHO TRADES. A pilot is only someone who is able to fly a plane successfully (i.e. is QUALIFIED).
  • #6
  • Nov 13, 2007 4:20am Nov 13, 2007 4:20am
Quoting fierceman
For what it's worth, Merriam-Webster defines a trader as "a person who buys and sells (as stocks or commodities futures) in search of short-term profits". It does NOT mention any skills or success rates as prerequisites.

It also defines a pilot as "a person who flies or is qualified to fly an aircraft or spacecraft", so it specifically mentions REQUIRED QUALIFICATIONS a person needs to call himself a pilot...

So, a trader is ANYONE WHO TRADES. A pilot is only someone who is able to fly a plane successfully (i.e. is QUALIFIED).
Yea, but Phil's WAY cooler than a dusty Merriam-Webster book AND he can fly, too!

Word!

(btw, it said "flies", not "flies without dying" and it used the "or" operator, so the binary result is still "true" even if it ends in a fireball, so that analogy is out the window as well. Yay for semantics instead of what the guy tried to say. Not that I know, I'm not him...Phil, we need you..)
Trust price. Know yourself.
  • #7
  • Nov 13, 2007 4:49am Nov 13, 2007 4:49am
If it ends in a fireball, then I don't think it would be considered flying, more like "free-falling".

NO SEMANTICS...

Oh and Merriam-Webster is not a dusty old book in this case, it's a shiny new website.

But I admit Phil's definition is still cooler.
  • #8
  • Edited 5:38am Nov 13, 2007 5:08am | Edited 5:38am
I agree with what fierceman and hanover said, but for me, the key here is about the acess to information that in the past took normal ppl to do something well.

As an example..

Lets say, if i want to be a Poker player or be called one, do i have the obligation to go to a poker school and pay for Poker Lessons?

Don't think so... why? Because the past shows me that the majority that went to the top, started by themselves.

Do i have the obligation to have a coach if i want to be a Marathon Runner?

No...! It might help at the beggining but its not totally necessary and i can do well if my body allows me to...

There are other examples of this.

Well... lets say...

Do i have to enter in a informatic school if i want to be an hacker or cracker?

No.. because there are enough information on the web to learn and... the past shows that many achieved that status without oficial lessons.

Whats the big difference between this and airplane pilot of cirurgeon? Is indeed about the shot we have at it.

If i fail, i'm out for good. But if somehow i buy a ton of academic books even without going to the university and i learn it, and i save 1 or 2 persons. I am a cirurgeon. Hey? Why not? Because i don't have my name in the official doctors list?

If i buy an airplane and somehow with pure luck i pass the first fase and i learn it, and i do it for years. I am a pilot.


Other example...

Montain Climber...! It is possible to learn without official lessons.

Musician... Actor...

If you are good, you are good. And a paper test should not be the border to officialize it, if you don't have the time and money to make it official.


In fact, lets face it.

In my opinion the main reason behind the original post by philmcgrew, its nothing more than a little bit of bragging. I don't doubt about who he is, but common...

When someone says in a semi-private forum...

"Who said that you are one of US??" with so much emotion...

Its pretty easy to see that in a lot of words there is a auto compliment sentiment behind.


Do you know who are the biggest critics of an actor than never went throught acting school? The ones who went...

This is all about ppl that went thought a hard work claming that "naturals" should not have a status if they don't spent years, burning their brains.



Just for a final note.... and this is VERY important in this discussion.

Do you know how do many pilots in lots of schools and flight companies learn how to fly?

With MICROSOFT FLIGHT SIMULATOR.

Maybe some don't believe but its the truth, i can tell you. Some believe that terrorists train on it.

"The newly released MS Flight Simulator X cater to pilots, would-be pilots or people who once dreamed of being pilots alike. It can often be frustrating, complex and difficult due to its realism, but it can be rewarding for the skilled flightsimmer at the same time."

Yes... a game avaiable to many ppl, and i can bet my money that there is lots of ppl out there that are just pros at that game.

They can fly a plane... but they are not pilots because they must write it in a paper after spending his life savings in a school?

Wierd huh?
  • #9
  • Nov 13, 2007 6:28am Nov 13, 2007 6:28am
Quoting Warper
As an example..

Lets say, if i want to be a Poker player or be called one, do i have the obligation to go to a poker school and pay for Poker Lessons?

Don't think so... why? Because the past shows me that the majority that went to the top, started by themselves.

Do i have the obligation to have a coach if i want to be a Marathon Runner?

No...! It might help at the beggining but its not totally necessary and i can do well if my body allows me to...
Warper, you completely missed the point. Over a period of years I taught myself to trade so I certainly am not suggesting that you need a coach to be a trader. That being said, every other job I've had did require several years of training. You are an economics student and at some point, perhaps now, you can call yourself an economist. You have, or will have, years of training to reach that point. It wouldn't be fair for me to read an article once a month and include myself as a member of your profession.

You are correct, you don't need a coach to call yourself a marathon runner. The point is that you actually need to run a marathon though. Stapling a number to your shirt, wearing running shoes, and posting on runnerfactory.com do not make you an athlete just as opening an account and blowing it up does not make you a trader.

There are traders, there are people working hard to become traders, and there are people who are fooling themselves hoping to hit the big one. I have been both of the first two and didn't find either journey particularly enjoyable but more of a business venture that I refused to walk away from. I do not brag about trading, it's just what I do for a living. If given the opportunity, I would brag about flying or some other accomplishments. Trading is just a job and not a very fun one at that. The only ones who think trading is somehow fun and glamerous are people who haven't done it.

The point of my post was to dispell the myth that there are so many losing traders. There are dropouts in all walks of life, not just trading. Almost half of all college students fail to obtain a degree within 6 years. Over half of all pilots drop out of flight training. In my nuclear power school there were 10 out of 30 students left after 6 months. The list goes on and on. Trading is a profession. If you are ill-prepared to trade against professionals but chose to do so regardless that's your choice. But, don't include yourself as a losing trader.
  • #10
  • Nov 13, 2007 6:59am Nov 13, 2007 6:59am
Quoting Warper
Just for a final note.... and this is VERY important in this discussion.

Do you know how do many pilots in lots of schools and flight companies learn how to fly?

With MICROSOFT FLIGHT SIMULATOR.

Maybe some don't believe but its the truth, i can tell you. Some believe that terrorists train on it.

"The newly released MS Flight Simulator X cater to pilots, would-be pilots or people who once dreamed of being pilots alike. It can often be frustrating, complex and difficult due to its realism, but it can be rewarding for the skilled flightsimmer at the same time."

Yes... a game avaiable to many ppl, and i can bet my money that there is lots of ppl out there that are just pros at that game.

They can fly a plane... but they are not pilots because they must write it in a paper after spending his life savings in a school?

Wierd huh?
Flight simulators are not part of the private pilot training curriculum in the US which is the first step in achieving additional ratings. If you want to become a pilot in the US I would be happy to point you towards the Code of Federal Regulations which spell out the minimum requirements. Our ratings transfer to virtually every country but the reverse is not true. The average pilot takes between 65 and 75 actual flying hours to get a license. Flying is expensive but it doesn't take your life savings unless you have little savings to start with.

Flight simulators are authorized to be used for a small percentage of training in advanced certificates but MS flight simulator is not an approved simulator because it lacks the realism necessary. I have a couple simulators including Microsoft and do use them on occasion to practice landings and look at checkpoints before flying to a new area. Playing flight simulator after learning to fly is not very satisfying but it does help with proficiency until you can do the real thing.

No offense, but reading the side of your MS flight simulator box does not qualify you to discuss the steps necessary to learn to fly.
  • #11
  • Nov 13, 2007 7:13am Nov 13, 2007 7:13am
Ok.

Let's come up with a new failure rating we can toss around at parties.

Since the real number is as elusive as Keyser Soze how about:

89% of all traders lose money, 6% are unlucky and the rest are human ATM machines.
  • #12
  • Nov 13, 2007 9:39am Nov 13, 2007 9:39am
Quoting Warper
Do you know how do many pilots in lots of schools and flight companies learn how to fly?

With MICROSOFT FLIGHT SIMULATOR.

Maybe some don't believe but its the truth, i can tell you.

Warper, I'm a pilot too. I got my PPL last year. What you say is simply plain totally FALSE.

All the flight schools around the world works with a very similar program because of the required conformance to ICAO standards.

Wherever you live in the world, believe me, you need to train on real planes for a definite minimum amount of hours if you want the license.

Schools usually discourage this but during the months of training you can use flight simulators if you like. Anyway the hours spent on simulators are just NOT reckoned by your flight school. You have to fly real planes if you want the license.

Way later, only after having got the PPL, only after having made tons of hours of REAL plane flying, and only if you decide to advance in your pilot career, some simulators could appear in you training. Not Microsoft anyway.
.Ubeee.
  • #13
  • Nov 13, 2007 9:55am Nov 13, 2007 9:55am
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
This is an interesting academic debate.... and I'm really enjoying your opinions. Keep them coming.

I would like to throw my opinion into the mix....

Trader is a noun, a name for a person who buys and sells a commodity. So, if you use real money and buy and sell money with the goal of profiting from your endeavor then you are a trader.

New Trader, Experienced Trader, Inexperienced Trader, Profitable Trader, Loosing Trader, Bankrupt Trader, Swing Trader, Day Trader.... notice the pattern? By adding a verb we say something about the subject... The Trader.

Your success as a trader has nothing to do with the definition of the term, it merely qualifies your trading ability.

Your training, experience, duration, age, personal characteristics, sexuality, political bias and so forth have nothing to do with the definition of "Trader".

It has been fun!

TrevA
  • #14
  • Nov 13, 2007 11:33am Nov 13, 2007 11:33am
Are we actually traders or speculators? Although some may
argue that we are traders because of the advent of ECN
(An ECN connects major brokerages and individual traders so that they can trade directly between themselves without having to go through a middleman.- investopedia.com) I still believe that our traditional role is
to speculate every move of the main traders.

The above definition did not say individuals can trade with central
banks and other so-called largest market participants.

I would like someone to explain further our roles and which market
do we have influence over.

Are we not gamblers? Are gamblers or speculators also called traders?
  • #15
  • Edited 12:33pm Nov 13, 2007 12:22pm | Edited 12:33pm
Quoting TrevA
This is an interesting academic debate.... and I'm really enjoying your opinions. Keep them coming.

I would like to throw my opinion into the mix....

Trader is a noun, a name for a person who buys and sells a commodity. So, if you use real money and buy and sell money with the goal of profiting from your endeavor then you are a trader.

New Trader, Experienced Trader, Inexperienced Trader, Profitable Trader, Loosing Trader, Bankrupt Trader, Swing Trader, Day Trader.... notice the pattern? By adding a verb we say something about the subject... The Trader.

Your success as a trader has nothing to do with the definition of the term, it merely qualifies your trading ability.

Your training, experience, duration, age, personal characteristics, sexuality, political bias and so forth have nothing to do with the definition of "Trader".

It has been fun!

TrevA
I agree with everything you said in your post. Trader can also refer to someone who traps furry animals and swaps them for supplies. By definition, when you go to the grocery store to buy eggs you are a trader because you are exchanging currency for a commodity. I bought a salad for lunch today therefore I am a trader.

The point of my original post was to point out that trading is also a profession just like surgeons, pilots, and a host of other professions. They all take training, skill, money, determination, support, and some luck.

It is my belief that just because you made a currency trade you are not truly a trader in the professional sense of the word and as Merlin eloquently stated in a subsequent post, it's a bit irritating to see someone break all the rules, blow their account and then cry that they are part of the 95% and that trading can't be conquered.

Yes, there is a generic definition for trading but it also refers to a profession and a way of life. This is a trading forum and it's not unreasonable to refer to a trader as someone who knows how to trade. I was not born a trader nor did I know any traders growing up. I traded for about 15 years before I quit to become a "trader." I'm not suggesting that I'm special, heaven knows that I paid my dues just as many others are doing now. It's not important to me that you think of me as a trader or anything else. It's a lonely business and I learned the hard way that others opinions and approval are quite unnecessary.
  • #16
  • Nov 13, 2007 3:18pm Nov 13, 2007 3:18pm
Regarding the Flight subject i just want to leave a final note...

ubeee, first of all, if there are anyone to blame is the news TV that gave me that information, including clear footage... (but if you are so sure that it cant be happening, what can i say... i guess nothing)

Second, we must admit that you or me trying to guess how its done everywhere is nothing more than speculation.

Third..

Quoting ubeee
Wherever you live in the world, believe me, you need to train on real planes for a definite minimum amount of hours if you want the license.


You have to fly real planes if you want the license.
Really? Isn't that obvious? Who said the opposite?

I never said nothing about the simulation being the one and only element in the school.

I said "learn how to fly" that in other words can be read as "learning the first and important steps to fly a plane with safety in a realistic way, before flying, but with real/quality knowledge"

I even had the care of writing "many pilots" and not "most of the pilots" that would mean the majority.



Anyway, just like i said, i am almost sure that TAP pilots do it and i leave here a little example of their skill.


In a previous note, you might think at first glance that this is bad skill from the pilot but in fact its the extreme opposite.

In that conditions few would make it. Notice that the planee is going sideways.

Inserted Video


And now.. an incredible airshow...

Only ppl that know a bit about planes know how incredible this is... in this kind of plane.

Enjoy

www.youtube.com/watch?v=_dK5VOhKk8s

www.youtube.com/watch?v=qkJr2kY1TqY

www.youtube.com/watch?v=BWdDHGEMQ2Q


Same move with tourists and a pilot reaction on the ground
Inserted Video


Cesár Brito is the name of the pilot with 4000 flight hours.
  • #17
  • Nov 13, 2007 5:21pm Nov 13, 2007 5:21pm
I think it's to do with how people try and word their thoughts. Many diatribes come out similar to what we really intend, but the subtle differences in wording ultimately skew the meaning. This is why I love the English language, it's so specific and we have a word for each subtle difference in an object or meaning.

From what I understand of the "95% fail" sentiment, it is that 95% of the people attempting to become a currencies trader for profit and income give up or fail their endeavor, while only 5% are able to achieve their goal, for whatever reason and circumstance.

Wordy yes, but I think that's where the "default" comes from, is that someone hears the concept and transcribes it changing one word which better fits their situation, which begets another change in the next person, etc. Much like the childhood game of "operator". Or how Aluminium became Aluminum. Even now, my spell checker is telling me that Aluminium is spelled incorrectly though a lot of people would argue that is the real and true spelling (which it is ).
Never underestimate the powers of the Force.
  • #18
  • Nov 13, 2007 9:59pm Nov 13, 2007 9:59pm
Quoting Warper
I never said nothing about the simulation being the one and only element in the school.
Warper, it's not a matter of the simulation being ONE OF MANY or the ONLY element of the schools. It's just NOT AN ELEMENT AT ALL (to get the PPL).

Anyway, this is a Forex forum, I think we are highly OT. I just suggest you go to a flight school and ask them and see with your eyes. TVs are TVs not the real world. While you are at it, enjoy a short flight on one of those school planes with a trainer. I bet you'll find the experience really extraordinary.

The videos you posted are good.
.Ubeee.
  • #19
  • Nov 14, 2007 2:48am Nov 14, 2007 2:48am
Quoting philmcgrew
.....Yes, there is a generic definition for trading but it also refers to a profession and a way of life......
If I play (amateur) golf in my local club championship, does that make me a golfer?

I would say yes. Others might say no.

But does it really matter?
  • #20
  • Nov 14, 2007 4:23am Nov 14, 2007 4:23am
Quoting hanover
...
But does it really matter?

Maybe I understand what Phil intends. We can make an analogy with simmers and real pilots. Pilots know that the vast majority of really addicted simmers (a simmer is someone that only plays flight simulators) strongly believe that they are also able to fly real planes if given the chance. Well, of course this not true, but in this case a simmer can never call himself a pilot because there are international laws that say that you are a pilot only if you get the expected licences.

Now, when we talk about trading, markets are open for everyone. Everyone can just start trading whenever he wants and call himself "trader", whatever profits or losses he usually gets from doing this. So there is no way to differentiate professionals to "dreamers".

Anyway my opinion is that every actor of the market should be allowed to call himself a trader, because the consequences in this case automatically award the professionals. You are a pro? You get the money. You are not a pro? Well, in order to call yourself a trader you have to pay more and more everyday giving your money to professionals through the markets. This way a "dreamer" just keeps on paying for his right to call himself "trader".

Then, you know, sometimes dreams come true and once in a while one of them stops paying and starts cashing from other dreamers. Now he is a new pro.

It seems very fair to me.
.Ubeee.
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