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

  • #21
  • Nov 14, 2007 7:25am Nov 14, 2007 7:25am
Quoting TrevA

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.


& From Wikedpedia
In finance, a trader is someone who buys and sells financial instruments such as stocks, bonds and derivatives. Traders are professionals, casual investors or speculators in financial instruments traded in the stock markets, derivatives markets and commodity markets, comprising the stock exchanges, derivatives exchanges and the commodities exchanges.
  • #22
  • Nov 14, 2007 7:59am Nov 14, 2007 7:59am
Sim "pilots" = demo "traders" perhaps?

In any case, Phil, buying a salad does not make you a trader according to the dictionary definition of the word. Making a trade through Interactive Brokers does. You can argue with a dictionary definition as much as you want, but unless you can change the minds of the linguists who are responsible for those definitions, and even more importantly, the general public (the real creators of language), then a trader is quite simply ANYONE who trades (and I don't mean trading money for salad).

But really, as hanover said, WHO CARES?
  • #23
  • Nov 14, 2007 8:04am Nov 14, 2007 8:04am
Quoting hanover
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?
Yeah, you can be a golfer if you want. But, you are not competing with people who do that for a living, you are playing against your drinking buddies.

The appropriate analogy would be you saying something like "95% of golfers don't make the cut to play on the weekend of a PGA sanctioned event." Well, no duh, you're not as good as those guys nor have you shown the effort or desire to become one. Does hitting your first ever bucket of balls make you a golfer?

The point is if you treat trading like a business and become a serious student of all aspects of trading your chances of some level of success are better than 5%. The point was not to say "I am a trader and you are not." I could not care less about how you refer to me or yourself.
  • #24
  • Nov 14, 2007 8:09am Nov 14, 2007 8:09am
Quoting philmcgrew
Yeah, you can be a golfer if you want. But, you are not competing with people who do that for a living, you are playing against your drinking buddies.

The appropriate analogy would be you saying something like "95% of golfers don't make the cut to play on the weekend of a PGA sanctioned event." Well, no duh, you're not as good as those guys nor have you shown the effort or desire to become one. Does hitting your first ever bucket of balls make you a golfer?

The point is if you treat trading like a business and become a serious student of all aspects of trading your chances of some level of success are better than 5%. The point was not to say "I am a trader and you are not." I could not care less about how you refer to me or yourself.
WoW, The underlying message in your post, is very encouraging. If I will put in the effort and the force of will and the quest for knowledge and the time, I can become a trader and the odds become better and better as I continue the task.

I would have to say, I agree with this completely.
  • #25
  • Jun 22, 2014 8:12pm Jun 22, 2014 8:12pm
Quoting philmcgrew
{quote} Yeah, you can be a golfer if you want. But, you are not competing with people who do that for a living, you are playing against your drinking buddies. The appropriate analogy would be you saying something like "95% of golfers don't make the cut to play on the weekend of a PGA sanctioned event." Well, no duh, you're not as good as those guys nor have you shown the effort or desire to become one. Does hitting your first ever bucket of balls make you a golfer? The point is if you treat trading like a business and become a serious student of...
The bottom line is that Broad statistics do not apply entirely to an individual. "Making it" is an individual thing . Every individual has their own unique odds of making it or not making it . Trading is an odds and probabilities buisness all the way around the block. Do you like the odds you have of making it in financial trading ? I think what gives the 90,95,99 % stats so much importance is the fact that dealing with looming uncertainty is all a part of the buisness . Sometimes I'm ok with the uncertainty and sometimes I get worried . I think the key is in learning how trading works for you and building on that. Does anybody have any tips on how to find a good mentor ?
  • #26
  • Jun 23, 2014 2:45am Jun 23, 2014 2:45am
Wow, a thread from the good old days. I only started it because, back then there was a 'Trading Club' forum where only folk who'd made more than 1,000 live trades were allowed to post. It was eventually replaced by the vouching system; now it's the little red diamonds.

Sadly, Phil hasn't posted for a few years now. He was one of the good guys. I have no idea whether he's still trading actively these days. Back then he was using a system of his own design called 'Currensys'. It used MACD and Bollinger bands to generate three different signal types, if I recall correctly. I also wonder how many of these indicator-based systems have retained their effectiveness during the global crisis, now that the carry trade can no longer be exploited by certain trend trading approaches.

Some other buddies from yesteryear also: ubeee, smjones, fierceman, SeekingLight. Ahh, the good old days.

I expect that the 95% figure is largely anecdotal. I haven't seen any formal statistical backing for it. Maybe it's come about because many aspiring traders discover that being consistently profitable isn't that easy, and they figure (rightly or wrongly) that no more than 5% of the population is likely to have more aptitude than they have. Perhaps the Dunning Kruger effect has a role in this.

Then, as more folk reach a similar conclusion, the snowball grows.......
  • #27
  • Jun 23, 2014 3:35am Jun 23, 2014 3:35am
Quoting fierceman
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.
  • #28
  • Jun 23, 2014 3:40am Jun 23, 2014 3:40am
I don't have aa th
Quoting hanover
Wow, a thread from the good old days. I only started it because, back then there was a 'Trading Club' forum where only folk who'd made more than 1,000 live trades were allowed to post. It was eventually replaced by the vouching system; now it's the little red diamonds. Sadly, Phil hasn't posted for a few years now. He was one of the good guys. I have no idea whether he's still trading actively these days. Back then he was using a system of his own design called 'Currensys'. It used MACD and Bollinger bands to generate three different signal types,...
I don't have a thousand live trades under my belt. I have studied options trading for the last eleven years. I started trading stock options live with a $1500.00 dollar account that actually lasted a year and a half ! I have a trend and volatility approach to vanilla options. Now I trade on the Nadex exchange live daily when the market is fit for it. I don't have a super large account yet because I have only been trading Nadex binary options live for six months. I put in a couple of hundred bucks here and there . I tend to win a lot more than I lose on a consistant basis. My biggest problem is cutting my losses short and letting my winners ride . It's like the minute I hit the green zone I'm like "I don't want to lose this profit . So I slide in and close the trade "before the greenzone turns to red again .
  • #29
  • Jun 23, 2014 4:20am Jun 23, 2014 4:20am
Perhaps there is something that you ALL are getting wrong.

First, there is not exist a consistently profitable/unprofitable trader, a trader itself is the guy that place the orders on behalf of an investor (you).
In other words, if you now call your broker and ask him to open or close a trade, the trader (the guy on the other side of the phone) will execute your request, earning a commission (that can be hidden inside the spread).

Now, professional traders never risk a cent of their money, yet they are consistently profitables (they earn money everyday with commissions).
This is what traders ARE.

Then there is you, the investor.
Thanks to the internet and the computer platforms, most of investors (like you) don't need to deal with traders anymore, they just place their trades directly from their computers, directly from their homes.

The question remain, xx% of investors do or do not loose money, i would say any answer is useless because of the gambling nature of investing.
Every trade is a gamble, so past performances are not indicative of future ones.

Of course most investors don't realize this.
  • #30
  • Last Post: Edited 7:28pm Jun 27, 2014 7:14pm | Edited 7:28pm
Quoting spaceduck
Perhaps there is something that you ALL are getting wrong.
Perhaps we are. But while your terminology might be strictly correct, it seems to be opposite to what is widely understood, at least on the trading forums and books that I've read.

  1. What you describe as a "trader", tends to be described elsewhere as a "br0ker" or a "market maker".
  2. What you describe as an "investor", tends to be described elsewhere as a "trader". The term "investor" usually refers to a speculator who "invests" passively, maintaining individual positions over longer periods of time; while a "trader" is a speculator who actively "trades" smaller timeframes and moves. (For example, I've heard of an "intraday trader", but never of an "intraday investor"). At least that's how I understand it.

Anyway, the terminology does not detract from the points being discussed.

While on the topic of word usage, "loose" is the opposite of "tight"; "lose" is the opposite of "win". As illustrated here.

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