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Even if the statistics showed that 1/30 of 1% succeeded, what does that say?
Probably that most new traders were undercapitalized, undereducated (in
terms of trading) and generally not prepared to trade with people who have
tons more experience and capital. This is even more true with the
popularity of the markets. Further, the number of unsuccessful traders
would probably decrease with number of years experience. What's the average
time span for people who attempt to trade? Sounds like 4-6 weeks. How can
you learn to trade the S+P, or anything for that matter, in 4 to 6 weeks?
Based on what was said below about how the average so-called trader feels,
they obviously aren't prepared to trade otherwise they wouldn't believe
those things. I've heard that on the floor if you can breakeven 1 year after
starting you're considered a good candidate for success. So the stats mean
little. What they say is that people underestimate the effort required to
trade successfully and are overly optimistic about their abilities. It also
says that they have little staying power because they fail once, and few if
any return (which may be a wise thing). It doesn't mean that the odds are
stacked against any one person from making it. If that person sticks around
and keeps working at it then they vastly improve their odds of success.
Trading is a great thing because it's a skill that can be cultivated with
reasonable intelligence and perseverance. The beginning trader just has to
work at it and use their head (i.e. paper trade, then trade midams, then
trade 1 lots then after some time if you've been profitable trade
multiples). They also can't let failure get them down. And this may be the
most sobering truth of all.
B.
> -----Original Message-----
> From: Bill Vedder [mailto:bved01@xxxxxxx]
> Sent: Saturday, July 17, 1999 9:59 PM
> To: Alan Myers
> Cc: omega-list@xxxxxxxxxx
> Subject: Re: Summary of comments: NASQAQ 100, SOES
>
>
> Alan,
>
> There is a paper at the OFOR site you may be interested in. It's
> titled "An
> Analysis of the Profiles, Motivations, and Modes of Habitual Commodity
> Speculators". It's a good paper detailing exactly what the title
> says. Lots of
> interesting stats and generalizations (typical trader is more
> concerned about
> win/loss rather than the amount won/lost, typical trader more
> worried that he'll
> miss a move by not trading rather than losing, most traders
> surveyed seldom or
> never used stops, the average trader had a career net trading
> loss of $72k...).
>
> The paper also has quite a few references to other studies.
>
> The OFOR site is: http://w3.aces.uiuc.edu/ACE/ofor/aboutofor.html
>
>
> Regards,
>
> Bill Vedder
>
>
>
> Alan Myers wrote:
>
> > MB said
> > ...I was told that the average
> > account 5000 to 15,000 that was opened up to daytrade the
> e-mini SP. Closed
> > due to debit or was inactive because of a lack of funds within
> 4 to 6 weeks
> >
> > >TJ sez ****>
> > >**** i know for a fact that less than 1/10 of 1% of futures traders at
> > >my clearing firm have gains on the 1099's that are sent out last year.
> > >so if you want to become a day trader, the odds are stacked against
> > >you.
> >
> > --- Ron Augustine <RonAug@xxxxxxxxxxxxx> wrote:
> > I don't have any stats, but imo, it's probably far less than 5% of the
> > people who attempt day-trading that meet with any worthwhile degree of
> > success
> >
> > Is there any possibility of ANYONE ever finding out what the
> truth really
> > is? Not guesses or heresay or survey of traders, but some real numbers?
> > What are the real odds of trading success (not just daytrading)? I have
> > never seen such numbers but plenty of guessing or generally
> accepted failure
> > percentages. I'm talking about numbers that are objective, and
> therefore,
> > probably not from traders.
> >
> > I came across some numbers from a study done by a large mutual fund that
> > studied the profitability of switching from one fund to another - only
> > within the same company because that was all of the data that
> was available
> > to them. I would have to search for it to find the exact
> numbers but almost
> > all "fund switchers" lost money in one of the greatest bull
> markets of all
> > time. To date, that is the only objective information I have
> ever seen. It
> > must have been leaked!
> >
> > Getting accurate stats from the stocks, options and futures
> industry is like
> > getting the tobacco industry to admit that smoking is
> addictive. It can't be
> > very pretty. I just wonder if it is worse than we believe.
> >
> > ~Alan
>
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