Myth Buster: 90-95% of traders cannot survive in trading

Let me just emphasize again. I never said the years of trading experience can guarantee the survival in trading arena.

Let's look at this exercise with a little open mind and try to think outside the box.

Okay, i have no offense intention
Just post what i think about.

will wait for your hypothesis of this exercise

Although we got only 87 voters but it seems that the traders who have longer trading experience are reduced by approximately 1-1/e = 63% in every age group and stable after 21-25 age group.

btw I just noticed that the number of voters on other polls is hardly more than 200 voters. I guess this exercise is very unlikely to have a large sample size. So how? Should I drop this exercise?

Forexquant, what is your conclusion about this thread title ?90-95% of traders cannot survive in trading

Not sure yet but I suspected that it could have an exponential decay with lamda of 1.

closer to 1-2% survive long-term...they defy the Livermore law that no one alive can beat the market in the long run.

One fatal thing that make livermore cannt survive his trading because he has break his own rule.
with a good management the one will survive

Well I think this exercise will not even have half of sample size (only 109 votes at the moment!) that I am looking for. So I will just make a short and simple explanation on my hypothesis.

The purpose of my question is to measure the number of traders who no longer stay in the game. It makes sense to consider those who eliminated from trading arena are not profitable and they stop gaining experience when they give up. It is very likely that they give up because they cant make money. Loser will eventually give up because most people cant sustain the financial/emotional stress and frustration in long run.

You may question that those who still stay in the game could be a loser too. Yes it is but as long as they still stay in the game, they still got chances to become profitable. Every profitable traders used to lose money or even blew their account. Therefore it is too early and not appropriate to judge an active trader if he or she does not give up. Thomas Edison had tried and failed over a thousand times before he invented a light bulb. We do not label him as a loser.

Ok now short story ends. Based on the limited number of votes, I would conclude that the survival rate has an exponential decay with lambda of 1.1, which means the survival rate is about e^(-1.1) = 33% every 5 years. The half life (Not the game!) is about ln(2) / 1.1 * 60 = 38 months, which also means the half of the survivals will be eliminated every 38 months.

If you have the endurance to stay in the game for 20 years, you are very likely to stay in the game hence profitable for the entire life. But how many survival left after 20 years? Just about 0.33^3 = 3.6%.

So, 90-95% of traders cannot survive in trading? Plausible. Margin of error of the survey? Damn huge!

ForexQuant,
what software/application did u use to create that chart?
U should've made the poll public to reduce & deter vote manipulation/haphazard voting.

Looks like a standard Excel chart with trendline options set to "display equation on chart."

i see.
Thanks, Sir Scott!

I got started in futures right at the start of the millennium. www.FutureSource.com was the place to go for free charts online. Looks like its been sold off. Forex traders are somewhat spoiled. Metatrader 4 / 5 has programming built in and is basically free for the trader. They promoted strategy trading to the retail trader from "the beginning" so to speak.

Always knew from the moment i dug into these markets that this is where the money is. Other businesses just dont compare.

Load it with broke r tricks

in the highest-leverage market
that is one of the few unregulated
for anybody with a penny to enter

a job that has the lower-wage retail trader guess
what the highest-earning corporations
(some of whom own that platform) do next,

and yes,
there's enough motivation
to give away a nice platform.