Why Only 10% of Stock Traders are Successful (and 90% Fail)?

Discussion in 'Trading' started by Lloyd W. Coutee, Oct 27, 2015.

  1. What is your opinion? I think it's because they just give up too early.
     
  2. rmorse

    rmorse Sponsor

    It requires finding an edge and executing that edge properly. Most traders never find that edge. It also requires proper capital. Entering any business under capitalized sets you up for failure.
     
    drm7, Occam and carrer like this.
  3. probably because a lot of people trade with emotions, don't listen to their own advice, don't cut losses when they should, don't practice proper risk management, and on top of all that have bad luck

    70% of small businesses fail within 10 years mostly due to poor management, trading isn't much different than that
     
    drm7 likes this.
  4. DrEvil

    DrEvil

    money, method, mind
     
  5. DrEvil

    DrEvil

    As a second, there is no point optimising your trading method for maximum profits if it that method takes you outside of your level of emotional competence to the extent that you cannot guarantee that you will be able to execute.
     
    d08 likes this.
  6. wrbtrader

    wrbtrader

    There's been several research surveys about the failure of retail traders. I'll list the most common reasons:

    1) Discipline Problems
    2) Lack of a proper trading plan
    3) Poor Risk Management
    4) Lack of a proper trade strategy
    5) Under Capitalization
    6) Poor Position Size Management
    7) Misuse of margin/leverage
    8) Trading the wrong trading instrument
    9) Inadequate Home/Office Trading Environment
    10) Poor Mindset
    11) Inadequate Research Skills

    Trading is a business. Most businesses eventually fail. If a trader doesn't treat the trading like a business...that's a trader that's already at a disadvantage prior to any of the above reasons.
     
    Dinosaur_Supervisor likes this.
  7. cjbuckley4

    cjbuckley4

    I told myself the other day that I would stick to explicitly technical trading related topics, but nonetheless I believe the biggest mistake 90% of traders make is not being data driven. Unless you have 8 phones on your desk with broker dealers calling you up all day, you aren't gonna make any money just doing what people say, you need to come to your own conclusions and inferences. This is very difficult to do without being data driven, whether we're talking daily bars and 10Ks or full market depth.

    Being data driven is significantly more work, and thus relatively few bother. Still more delude themselves into thinking they're taking an analytical approach when in fact they're just getting fooled by randomness.
     
  8. IOW, Technical Analysis.... proper TA. Much of the markets' movements are "noise". Some of it is not. Traders need to be able to determine which is which.

    Most traders fail because they (1) screw up, and (2) don't know what they're doing in the first place.

    There are a gazillion ways to lose your money in the markets, but only a handful of ways to succeed.

    Traders need to figure out one of those "ways".
     
    Last edited: Oct 27, 2015
    drm7 likes this.
  9. Too many would be traders master TA in 3 days and 2 nights from a comic book.
     
  10. cornix

    cornix

    Who said it's 90/10?
     
    #10     Oct 27, 2015
    OTM-Options likes this.