New study shows only 1% of traders are consistently successful | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Why Traders lose money and how to start being consistently profit 60 replies

How many consistently profitable traders around? 87 replies

Emacsen Study, Study, Study 0 replies

Which Brokers Do Consistently Profitable Live Traders Use? 2 replies

Are New Traders Who Are Successful Hated? 43 replies

Attachments: New study shows only 1% of traders are consistently successful
Exit Attachments

New study shows only 1% of traders are consistently successful

  • #1
  • First Post: Mar 29, 2010 4:22pm Mar 29, 2010 4:22pm
We've all heard that "90% of people fail in trading." Another figure that is just as often used is "95%" fail at trading. BUT, has anyone actually seen any study proving these statements?

Like many here, I have been curious as to whether the 90 - 95% of traders statistic had any truth to it. Well, I FINALLY found a study that gives an actual number in regards to the percentage of people that succeed in trading. An article was published in The New York Times a few days ago in which it cited a new, yet-to-be-published study that basically said only 1% of traders are regularly profitable.

Here is the link (the study I speak of is on page 2 of the article):

http://www.nytimes.com/2010/03/28/bu...s&st=cse&scp=1


Now, finally having factual proof showing that ther is a next-to-nothing chance of someone becoming (consistently) successful as a trader, my question to everyone here is: Will it stop you in any way in trying to achieve your dream as a consistently profitable trader?


Topgun
"Success is not a fantasy, it's a formula." - MTI
  • #2
  • Mar 29, 2010 4:36pm Mar 29, 2010 4:36pm
Does it really matter whether the number is 95% or 99% of people fail at trading. Maybe if people quit whining about how hard it is to trade and spent more time trying to be a succesful trader and not complaining on forums that number would change. The real issue is that people don't really want to work for anything they want it all handed to them on a silver freakin platter.
  • #3
  • Mar 29, 2010 4:46pm Mar 29, 2010 4:46pm
HA HA HA,but there are millions in your 1%,What's your problem?are you your brother keeper,study about yourself and your trading,not what some survey is saying about you.These are the propaganda and brainwashing, designed to break you before you start.It's better to try and fail that fail to try.Why did our forefathers succeed?
  • #4
  • Mar 29, 2010 4:56pm Mar 29, 2010 4:56pm
As long u stop searching for some holy_grail EA and magical indicators that can become your ATM , it can be doable....

good luck friend,
  • #5
  • Mar 29, 2010 4:57pm Mar 29, 2010 4:57pm
I don't believe it, if you spy and ninja around this forum you'll find many successful people.
  • #6
  • Mar 29, 2010 5:04pm Mar 29, 2010 5:04pm
Look at this forum, over 700 are in in the trading systems or cable/euro etc threads, others are in the popular commercial threads that are designed to get subs.

The rest are probably in journals or trying to write an EA in MT4.

A few are in here discussing trading,

If we say there are 1000 people online right now, 10 of them are profitable. I would say that's about right.
Attached Image (click to enlarge)
Click to Enlarge Name: 2010-03-29_2257.png Size: 79 KB
Economists have forecast 9 out of the last 5 recessions
  • #7
  • Mar 29, 2010 5:14pm Mar 29, 2010 5:14pm
I am still in Green since 2008. I join the 1-5% group traders for a while
  • #8
  • Edited 5:32pm Mar 29, 2010 5:21pm | Edited 5:32pm
1%?

Sure, I believe it. Doesn't concern me at all because I'm in it for the long haul and I'm working my ass off at it.

Just look at where everyone on the forum is. On the so called "Interactive Trading" (aka Call) threads - asking each other which way is up.

There is someone to ask but, not there on those dumb threads:
http://1.bp.blogspot.com/_HoDij8Z2tH..._in_mirror.jpg

I'm ALWAYS completely stunned whenever I'm approached by someone who finds out that I'm working at forex trading, at how absolutely little they are willing to do. Even worse how itchy they are to throw their money into "trades" right away. Maybe they don't account for many of the 99% as a whole, I don't know. I'll bet a good many though.

Edit: Just one more thought which should be obvious. Anyone who's not 1,000% serious and committed should definitely be concerned about becoming a statistic. Otherwise, you're going to need one hell of a long streak of good luck.
  • #9
  • Mar 29, 2010 5:52pm Mar 29, 2010 5:52pm
This study seems to have struck a raw nerve for several here. So I will offer you hope. Here is a quote from the co-author of the study, Brad M. Barber:

"It’s not impossible to make money actively trading. There are slivers of people out there who are quite good. And everyone thinks they will be in that group of 1 percent.”

So, if you think your hard work and dedication to trading will put you in that group of one percent, then I say go for it. I am just the messenger reporting the facts of the study... and letting you know not to be shocked if you end up in the 99% group.


Topgun
"Success is not a fantasy, it's a formula." - MTI
  • #10
  • Mar 29, 2010 6:18pm Mar 29, 2010 6:18pm
Quoting Topgun_1
and letting you know not to be shocked if you end up in the 99% group.
Topgun
The thing is that you must keep yourself out of the group. Otherwise, by default, you will definitely end up there.

As has been said many, many times here in the forum it's not any different than any skilled, highly competitive field - the low percentage of success. 1% or even less. The currently low cost of entry is , most likely, another factor in favor of a high percentage of crash and burn.
  • #11
  • Mar 29, 2010 6:26pm Mar 29, 2010 6:26pm
"Using account data for over 60,000 households from a large discount brokerage firm, we analyze the common stock investment performance of individual investors from February 1991 through December 1996"

Come on be serious, this is an outdated study !!!

The so called study is from stock trades from 1991 to 1996 from "households".
Have you the slightest idea what were the commissions, the spreads, and the cost to plateforms and datafeeds then. It was nothing compared to today.
No wonder people couldn't win daytrading these days, they were eaten alive by the cost of trading. Day trading became viable around 1998-1999 when technology, and volumes increased, as the costs decreased.

Today it's definately very possible to make good money trading, especialy with low entry barrier forex market.
But it must be treated as a serious job, implying lots of work and discipline, not a casino's like mentality.

Another point is that: Who cares if it's 1% or 20% as long as you're part of the winners
Getting it right is NOT as important as not getting it wrong.
  • #12
  • Mar 29, 2010 7:06pm Mar 29, 2010 7:06pm
Quoting fxswing
"Using account data for over 60,000 households from a large discount brokerage firm, we analyze the common stock investment performance of individual investors from February 1991 through December 1996"

Come on be serious, this is an outdated study !!!

The so called study is from stock trades from 1991 to 1996 from "households".
Have you the slightest idea what were the commissions, the spreads, and the cost to plateforms and datafeeds then. It was nothing compared to today.
No wonder people couldn't win daytrading these days, they were...
finally... a real post here.
  • #13
  • Mar 29, 2010 8:07pm Mar 29, 2010 8:07pm
Also, if you're looking at accounts, you really need to look at active accounts, over a period of time. There are plenty of people on this forum who have blown up a couple of accounts before becoming profitable, doesn't mean there are 2 losers and 1 winner there.

A lot of people just give trading a whirl, just like anything else. I'm sure for people who actually give it a proper go, the chances of success are much much higher.
  • #14
  • Mar 30, 2010 2:03am Mar 30, 2010 2:03am
".....By the end of the day, Mr. Lindloff has traded 60,000 shares and is up $165. It would be a satisfying return, but commissions on those trades cost $300....."



-
  • #15
  • Edited 12:36pm Mar 30, 2010 12:24pm | Edited 12:36pm
Quoting FXSurfer


I'm ALWAYS completely stunned whenever I'm approached by someone who finds out that I'm working at forex trading, at how absolutely little they are willing to do. Even worse how itchy they are to throw their money into "trades" right away. Maybe they don't account for many of the 99% as a whole, I don't know. I'll bet a good many though.

.
WELL SAID

Of the people that I know personally (not from FF) who trade Forex, none are consistently profitable. They all share a common theme--got excited about some seminar with a Get Rich Quick product for sale, bought it, dabbled, and wandered off in search of something easier.

I trade a small live account. I have consistently hit my goal for growth per month ( using scalping and strict MM), but as I have not done that for a full year yet, I do not consider myself a truly profitable trader. I also get up about two hours earlier than the rest of my household so I can trade, study, and learn. I read everything I can get my hands on, tinker with my method, and took an extended break from FF so I could coalesce my own technique (which would be called hopelessly primitive and basic by almost everyone here). So far, so good. It is a passion, and I love it.
  • #16
  • Edited 12:50pm Mar 30, 2010 12:47pm | Edited 12:50pm
According to this report: http://www.americanchronicle.com/articles/view/778

80% of "new businesses" fail. I'm taking that to mean any new business. Start up and failure are a natural part of business. If you want to concentrate on the negative, then you too will fail.

Study and learn from the mistakes of others...apply those lessons...and don't make the same mistakes. Success or failure is NOT the result of the market nor the nature of the business, it is completely 100% result of the person running the business.

Trading Forex is NO different. If you want to allow others to influence your business then get a regular job. If you want to be successful then you MUST put yourself out there and take a risk. Business = Risk...get used to it.

All these cute little statistics are only for the "nay" sayers. They all want to think of good logical reasons why YOU wont be successful because THEY are afraid. If you spend even 1/2 the amount of time being positive and studying to be successful as you do on the negative crap you WILL have some success. Build with positive not negative.

No one has ever claimed it will be easy...nothing worth doing in life is easy. If you want easy, get a job at McDonald's...that's REAL easy. (for most any way). Just like any business start up there is a great deal of good old fashion hard work, with no guarantees or entitlements attached. Do your dilligence, study, work hard and you too can reap the reward. Succumb to the pessimism and negative attitude and you will be yet another anonymous memeber of the 90% failures in this world...

Your choice...wake up!!
  • #17
  • Mar 30, 2010 2:00pm Mar 30, 2010 2:00pm
Quoting gspajon
....If you spend even 1/2 the amount of time being positive and studying to be successful as you do on the negative crap you WILL have some success. Build with positive not negative......
I don't think anyone goes into any business feeling negative or anticipating failure, everyone is optimistic when they start out otherwise they probably wouldn't bother.

Sportsmen for example are big on psychology (the 4 C's), but without the talent and ability it's not enough to get them by, the same goes for trading, you need more than a positive attitude to achieve any degree of success.

There's a difference between pessimism and facing reality, and the reality of trading is the vast majority fail, there's no escaping that fact.

-
  • #18
  • Mar 30, 2010 2:49pm Mar 30, 2010 2:49pm
Quoting pipmutt
I don't think anyone goes into any business feeling negative or anticipating failure, everyone is optimistic when they start out otherwise they probably wouldn't bother.

Sportsmen for example are big on psychology (the 4 C's), but without the talent and ability it's not enough to get them by, the same goes for trading, you need more than a positive attitude to achieve any degree of success.

There's a difference between pessimism and facing reality, and the reality of trading is the vast majority fail, there's no escaping that fact....
I agree with you 100%. Perhaps I wasn't clear. My point (ranting as it was) is that every business has a negative side and involves risk. The entrepreneur must accept this and do everything in his power to overcome these to be successful. Granted talent and skill have their place but even the less skilled (me being one) can be successful, it just takes more work.

It would've been easier to blame the failure rate of this business and say that was why I can't be successful. But I do not accept that, and while I am still struggling, I am still experiencing success and building on that NOT the failures.

This is another form of accepting responsibility for my own actions. By saying that 99% of this business fails (to me) is just another way of putting the responsibility off yourself an onto something outside your own control. This is unacceptable to me. Take responsibility with full knowledge of the down side and then let the chips fall where they may.

BTW...this is the same formula for a successful trade. Control the risk...accept it and let the market decide if you win or lose.

The first step is always...control/accept the risk. (read take responsibility for your own actions).
  • #19
  • Mar 30, 2010 3:32pm Mar 30, 2010 3:32pm
Quoting gspajon

This is another form of accepting responsibility for my own actions. By saying that 99% of this business fails (to me) is just another way of putting the responsibility off yourself an onto something outside your own control.
Right, I see what you're saying now, I misinterpreted it slightly.

There's probably comfort in knowing that most people fail, that way if we fail we're not really failures, we're no worse than the majority. I can see how that might lead to less effort and work being put into the venture, maybe there's some subconscious expectation, acceptance even, that failure is quite likely.

I wonder what Freud would make of all this!
  • #20
  • Mar 30, 2010 3:42pm Mar 30, 2010 3:42pm
Quoting pipmutt
I wonder what Freud would make of all this!
It's our mothers' fault if we fail!



Really good post, Pip!
0 traders viewing now