What are your odds of making it? How many get rekt?
We have all heard anecdotal evidence.
Every one throws random numbers around "be in the 80%", "be in the 91%", 99%, 90%, 75%, all sorts of numbers, usually the failure rate is pretty high and success is low. Day trading, or longer term. Real estate same story. And for long term investing you will hear "90% don't beat the market".
I am looking at speculating here rather, althought alot of numbers take into account long term investors so keep that in mind (I'll repeat it when accurate).
What is very often said is that winners have high reward to risk, and aren't day trading.
From what I have seen around it looks to me that the people that make money day trading pretty much all scalp support levels with level 2 market data, or that sell programs and signals.
No personal and anectode from here on, or maybe a little as bonus, I will look at studies.
1- AMF (french regulator) study of a popular broker clients over 4 years.
The name of the report is "Étude des résultats des investisseurs particuliers sur le trading de CFD et de Forex en France".
Now, let's get into the fun stuff.
Seems small compared to the markets (forex + stocks + indices + more). Do retail traders getting wiped out really change much?
Big institutions make more profit than a couple hundred millions over 4 years...
Large speculators that make money, must be from hedgers and whales mostly. I don't think retail holding bags & gambling adds much.
A large part of the lost money came from idiots placing tons of orders. How much is lost in spreads?
Checking by volumes, those that did 1 to 10 million lost on average 3700 euros.... Say the average volume they did was 4 MM, that's a 0.01% loss...
Looks like they are coinflip warriors that day trade and just lose money with spreads?
My opinion the very few orders ones (losses are quite high compared to very small number of operations) are those that either go "all in" an a hunch and lose and leave, or get lucky, get excited, go in big, get shrekt, get scared, leave. And also those that start and can't stop losing, bad luck streak, disgusts them so they quit.
So ye, the ones taking "big" losses early one are the luckier ones, they give up quick and never come back and don't waste time & take massive losses.
2- UKNF (Polish regulator) reports
"Komunikat w sprawie wyników osiąganych przez inwestorów na rynku forex" (Communication on results achieved by investors in the forex market)
2 reports. Can't find the older one unless this is it.
"The New York Fed’s Foreign Exchange Committee volume survey released in 2016 shows that trading by volume “non-financial customers” in April 2016 was at roughly 7% of all FX trades."
Nice, nice. No, 93% are not making money off the 7% of small fish (just making a little, a rounding error in their profit).
3- FXCM report (they're a broker)
I am so thankful for all of the 16-24 yo Forex experts, I can't help it I always get hysterical when I see their little faces or even just talk about them 🤣
If I meet someone that looks all defeated and tells me he got scammed by such an individual I guess our friendship will quickly be over because I won't be able to help just laughing in their face.
I roasted an "educator" on tradingview & twitter, he threated to sue me + others. After he had already scammed people. And he repeated it.
TV staff correctly banned him permanently, haven't heard from him since. Lots of clients were defending him. All their money is now belong to him.
4- 1999 NASAA report
"REPORT OF THE DAY TRADING PROJECT GROUP" by the "NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION".
As we have seen the vast majority of retail are day traders, so this sort of will tell the same story.
In 1999 the business was not as developped, a largest percentage of participant very likely were more seriously, most no effort get rich quick with my 22 yo educator indicators gamblers joined later.
5- Brazil 2019 study of day traders
I'm just reading an article here. I think the study can be found on the SSRN website. Had another paper from this site but it was a study on a voluntary survey of traders lol, so not worth anything.
"We observe all individuals who began to day trade between 2013 and 2015 in the Brazilian equity futures market, the third in terms of volume in the world, and who persisted for at least 300 days".
Ok so this paper is worth something then.
They quote some old papers when day traders didn't compete with HFT firms, high success rates of course (I don't know if it counts locals, because I mean that's not speculating).
6- Article from Tradeciety (quoting their sources)
7- Do Smart Investors Outperform Dumb Investors?
2009 paper by Grinblatt Keloharju Linnainmaa. From... Some Chicago school of Business?
Found it on Yale department of economics site. Robert J. Shiller personal page (Shiller PE ratio). Seems legit enough.
8- What about non day-trading market participation?
Well, there is absolutely nothing! It's all about day trading. Like not being clinically retarded is extravagant.
So to sum up:
The ~76% money losing rate european brokers display on average, I think is over a quarter.
China literally totally banned leverage with FX (wonderful country), and you wonder why Bitcoin and other ponzi schemes have so much success?
And crypto baghodlers actually expect China to not entirely ban crypto eventually...
They are slow and incompetent but they'll get there.
And this is a classic commie tactic: Let them think you are pro crypto, they pop their head out, you can arrest them.
When they'll have arrested all those involved with crypto they wanted to arrest, they are going to lay a blanket ban on all cryptos.
There is no hope, there is no light at the end of the tunnel, more and more brainlets are treating the markets like a casino, and it might only be a matter of time until it gets completely banned for retail (thanks, always protecting the morons).
Stats are not that bad. 90% lose over a 4 year period? Maybe 90-95% of all those that join end up eventually losing or quit after a short while?
It's not that bad. And remember a whole lot are stupid day traders, and they destroy the average.
In the first year 60% of restaurants don’t make it past their first year and 80 percent go out of business (get rekt) within five years.
In the first year 80% of retail traders don't make it past their first year and 90% go out of business (get rekt) within five years.
Not much surprise here. Lmao at all those celebrities restaurants that fail completely! 😄 Not talking about famous chefs, I mean action movie actors & the such.
Restaurants failure rate isn't counting the recent "min wage raise" in the USA. Good luck with those. Success rate would honestly go to zero. Simple maths. Politicians are really really stupid.
House flipping is a very intelligent activity and has about the same success rate as day trading.
US bureau of labors stats show that small businesses in general have a 50/50 survival rate over 5 years and 25% over 15 years and that's quite high.
Most "educators" are either young or old (uuu the experience right). Studies show middle-aged men start the most successful businesses.
Middle aged men are too busy doing actual stuff? I am between young and middle aged myself if you were wondering.
I could go look for more stats but it's all the same. Success rates are never 100%. And the harder something is (because of hygiene regulations, because of cognitive demand), the lower the success rate.
Medical schools have an acceptance rate of 7% on average, but that's not saying that 7% of all people that apply get in.
"MCAT and GPA Grid for Applicants and Acceptees to U.S. Medical Schools, 2017-2018 through 2019-2020 (aggregated)" ==> 42%
Teens with low scores don't even bother applying thought. And once in school how many end up with a doctorate?
Sooooo... Speculative trading is one of the hardest activities, it is one of the hardest psychologically and most cognitive demanding.
I crack up when people try to cheer themselves up and go "smart people don't make good traders because emmm ego n perfectionists n stuff".
It's really not surprising that the failure rate would be at that level.
Medical schools have a barrier to entry, which is why the failure rate is not as high, but absolutely anyone can start trading or open a restaurant.
Obviously failure rates will be higher, and much higher in the case of speculation.
Just imagine the average person. He's not very smart. Most people are somewhat isolated from the rest of the population. Engineers are surrounded by people with master degrees and doctorates, not janitors that can't add 2 and 2 and think Bloomberg can give 1 million to every one (lol).
The average person is not very bright, and 50% people are dumber than this!
In the 90% failure rate you got all kinds of delusional clows, all the bottom feeders are here. AND! Remember! This includes a big majority of day traders!
I don't know what the numbers are for non day trading, but over a 5 year period the failure rate might only be 70% or so!
Cruel reality is cruel. If you are rather smart, or at least non-retarded. Let's say you are in the top 25% of people (> 110 IQ), you have a real chance of making money if you put the effort into it. Probably doesn't need to be a genius. Just to make some money now I'm not talking about making millions either. 90 to 110 IQ I don't know. Slow people under 90 IQ, it's my personal opinion they can't possible be successful.
Just my personal opinion. Like my personal opinion is that people with (today's) IQ < 90 have never and are never going to solve any math problem, or find some new elemental particle, or build a rocket, etc. If they manage to remember how to lace their shoes and fill a welfare request document that's real good, and that's all society will ever require of them 😉.
Marathons, Chess, stuff where you can't cheat. Masters in those disciplines reached the peak after training for decades.
Musclemen... Activities where you can take steroids...
"The Mountain" became one of the strongest men in the world 2 years after lifting his first weight. Now his face is deformed 🙃
Strongment events that rely on strong joints not just muscles, in other words steroids don't help, interestingly their records haven't been broken in a century+
The public thinks they can get something for free. They think they can have success in something instantly, like it's a web link, just clic and here y a go.
The gall. You got people so stupid they don't even understand how stupid they are, they struggle with the most basic concepts, and they casually think they're the greatest mind of all time, and will become some super hero beating HFT firms and outperforming Jesse Livermore etc.
That amount of delusion is absolutely staggering. What more can I say. Anything other than flipping burgers takes time and effort and brains or brawns and sees some people fail. The competitive activities have higher failure rates. The more competitive, the lower the success rate... Why am I even typing this...
But sure, I'm going to keep seing thousands of newbs land every months, and chase the twitter expert, or look for the person that joined 2 months ago and said "price go up" just before the price goes up (not joking I saw someone like this recently and the update idea after the breakout had literally in the first line "Volume is low not a good buy I am looking to short", literally the first line, and newbs that saw "green candle. price go up" are celebrating the "great call").
Absolute pieces of ****. I don't always read everything, or watch entire videos, I read diagonally and I think every one should, I pick bits in articles I am interested in, and I think that's what people should do but maaan. If you're not even going to bother reading the first sentence and are jsut looking for the traders with the most successful apparent last few calls, you really deserve to lose everything.
It's like the USO buyers that didn't bother finding out what they were buying. Or stock & FX traders that never touched a future and then went all in Oil without learning what it was or anything.
That's really insane to me. They certainly deserve to get wiped out.
If I may give some tips around all this:
Every one throws random numbers around "be in the 80%", "be in the 91%", 99%, 90%, 75%, all sorts of numbers, usually the failure rate is pretty high and success is low. Day trading, or longer term. Real estate same story. And for long term investing you will hear "90% don't beat the market".
I am looking at speculating here rather, althought alot of numbers take into account long term investors so keep that in mind (I'll repeat it when accurate).
What is very often said is that winners have high reward to risk, and aren't day trading.
From what I have seen around it looks to me that the people that make money day trading pretty much all scalp support levels with level 2 market data, or that sell programs and signals.
No personal and anectode from here on, or maybe a little as bonus, I will look at studies.
1- AMF (french regulator) study of a popular broker clients over 4 years.
The name of the report is "Étude des résultats des investisseurs particuliers sur le trading de CFD et de Forex en France".
Now, let's get into the fun stuff.
Seems small compared to the markets (forex + stocks + indices + more). Do retail traders getting wiped out really change much?
Big institutions make more profit than a couple hundred millions over 4 years...
Large speculators that make money, must be from hedgers and whales mostly. I don't think retail holding bags & gambling adds much.
A large part of the lost money came from idiots placing tons of orders. How much is lost in spreads?
Checking by volumes, those that did 1 to 10 million lost on average 3700 euros.... Say the average volume they did was 4 MM, that's a 0.01% loss...
Looks like they are coinflip warriors that day trade and just lose money with spreads?
My opinion the very few orders ones (losses are quite high compared to very small number of operations) are those that either go "all in" an a hunch and lose and leave, or get lucky, get excited, go in big, get shrekt, get scared, leave. And also those that start and can't stop losing, bad luck streak, disgusts them so they quit.
So ye, the ones taking "big" losses early one are the luckier ones, they give up quick and never come back and don't waste time & take massive losses.
2- UKNF (Polish regulator) reports
"Komunikat w sprawie wyników osiąganych przez inwestorów na rynku forex" (Communication on results achieved by investors in the forex market)
2 reports. Can't find the older one unless this is it.
"The New York Fed’s Foreign Exchange Committee volume survey released in 2016 shows that trading by volume “non-financial customers” in April 2016 was at roughly 7% of all FX trades."
Nice, nice. No, 93% are not making money off the 7% of small fish (just making a little, a rounding error in their profit).
3- FXCM report (they're a broker)
I am so thankful for all of the 16-24 yo Forex experts, I can't help it I always get hysterical when I see their little faces or even just talk about them 🤣
If I meet someone that looks all defeated and tells me he got scammed by such an individual I guess our friendship will quickly be over because I won't be able to help just laughing in their face.
I roasted an "educator" on tradingview & twitter, he threated to sue me + others. After he had already scammed people. And he repeated it.
TV staff correctly banned him permanently, haven't heard from him since. Lots of clients were defending him. All their money is now belong to him.
4- 1999 NASAA report
"REPORT OF THE DAY TRADING PROJECT GROUP" by the "NORTH AMERICAN SECURITIES ADMINISTRATORS ASSOCIATION".
As we have seen the vast majority of retail are day traders, so this sort of will tell the same story.
In 1999 the business was not as developped, a largest percentage of participant very likely were more seriously, most no effort get rich quick with my 22 yo educator indicators gamblers joined later.
5- Brazil 2019 study of day traders
I'm just reading an article here. I think the study can be found on the SSRN website. Had another paper from this site but it was a study on a voluntary survey of traders lol, so not worth anything.
"We observe all individuals who began to day trade between 2013 and 2015 in the Brazilian equity futures market, the third in terms of volume in the world, and who persisted for at least 300 days".
Ok so this paper is worth something then.
They quote some old papers when day traders didn't compete with HFT firms, high success rates of course (I don't know if it counts locals, because I mean that's not speculating).
6- Article from Tradeciety (quoting their sources)
7- Do Smart Investors Outperform Dumb Investors?
2009 paper by Grinblatt Keloharju Linnainmaa. From... Some Chicago school of Business?
Found it on Yale department of economics site. Robert J. Shiller personal page (Shiller PE ratio). Seems legit enough.
8- What about non day-trading market participation?
Well, there is absolutely nothing! It's all about day trading. Like not being clinically retarded is extravagant.
So to sum up:
The ~76% money losing rate european brokers display on average, I think is over a quarter.
China literally totally banned leverage with FX (wonderful country), and you wonder why Bitcoin and other ponzi schemes have so much success?
And crypto baghodlers actually expect China to not entirely ban crypto eventually...
They are slow and incompetent but they'll get there.
And this is a classic commie tactic: Let them think you are pro crypto, they pop their head out, you can arrest them.
When they'll have arrested all those involved with crypto they wanted to arrest, they are going to lay a blanket ban on all cryptos.
There is no hope, there is no light at the end of the tunnel, more and more brainlets are treating the markets like a casino, and it might only be a matter of time until it gets completely banned for retail (thanks, always protecting the morons).
Stats are not that bad. 90% lose over a 4 year period? Maybe 90-95% of all those that join end up eventually losing or quit after a short while?
It's not that bad. And remember a whole lot are stupid day traders, and they destroy the average.
In the first year 60% of restaurants don’t make it past their first year and 80 percent go out of business (get rekt) within five years.
In the first year 80% of retail traders don't make it past their first year and 90% go out of business (get rekt) within five years.
Not much surprise here. Lmao at all those celebrities restaurants that fail completely! 😄 Not talking about famous chefs, I mean action movie actors & the such.
Restaurants failure rate isn't counting the recent "min wage raise" in the USA. Good luck with those. Success rate would honestly go to zero. Simple maths. Politicians are really really stupid.
House flipping is a very intelligent activity and has about the same success rate as day trading.
US bureau of labors stats show that small businesses in general have a 50/50 survival rate over 5 years and 25% over 15 years and that's quite high.
Most "educators" are either young or old (uuu the experience right). Studies show middle-aged men start the most successful businesses.
Middle aged men are too busy doing actual stuff? I am between young and middle aged myself if you were wondering.
I could go look for more stats but it's all the same. Success rates are never 100%. And the harder something is (because of hygiene regulations, because of cognitive demand), the lower the success rate.
Medical schools have an acceptance rate of 7% on average, but that's not saying that 7% of all people that apply get in.
"MCAT and GPA Grid for Applicants and Acceptees to U.S. Medical Schools, 2017-2018 through 2019-2020 (aggregated)" ==> 42%
Teens with low scores don't even bother applying thought. And once in school how many end up with a doctorate?
Sooooo... Speculative trading is one of the hardest activities, it is one of the hardest psychologically and most cognitive demanding.
I crack up when people try to cheer themselves up and go "smart people don't make good traders because emmm ego n perfectionists n stuff".
It's really not surprising that the failure rate would be at that level.
Medical schools have a barrier to entry, which is why the failure rate is not as high, but absolutely anyone can start trading or open a restaurant.
Obviously failure rates will be higher, and much higher in the case of speculation.
Just imagine the average person. He's not very smart. Most people are somewhat isolated from the rest of the population. Engineers are surrounded by people with master degrees and doctorates, not janitors that can't add 2 and 2 and think Bloomberg can give 1 million to every one (lol).
The average person is not very bright, and 50% people are dumber than this!
In the 90% failure rate you got all kinds of delusional clows, all the bottom feeders are here. AND! Remember! This includes a big majority of day traders!
I don't know what the numbers are for non day trading, but over a 5 year period the failure rate might only be 70% or so!
Cruel reality is cruel. If you are rather smart, or at least non-retarded. Let's say you are in the top 25% of people (> 110 IQ), you have a real chance of making money if you put the effort into it. Probably doesn't need to be a genius. Just to make some money now I'm not talking about making millions either. 90 to 110 IQ I don't know. Slow people under 90 IQ, it's my personal opinion they can't possible be successful.
Just my personal opinion. Like my personal opinion is that people with (today's) IQ < 90 have never and are never going to solve any math problem, or find some new elemental particle, or build a rocket, etc. If they manage to remember how to lace their shoes and fill a welfare request document that's real good, and that's all society will ever require of them 😉.
Marathons, Chess, stuff where you can't cheat. Masters in those disciplines reached the peak after training for decades.
Musclemen... Activities where you can take steroids...
"The Mountain" became one of the strongest men in the world 2 years after lifting his first weight. Now his face is deformed 🙃
Strongment events that rely on strong joints not just muscles, in other words steroids don't help, interestingly their records haven't been broken in a century+
The public thinks they can get something for free. They think they can have success in something instantly, like it's a web link, just clic and here y a go.
The gall. You got people so stupid they don't even understand how stupid they are, they struggle with the most basic concepts, and they casually think they're the greatest mind of all time, and will become some super hero beating HFT firms and outperforming Jesse Livermore etc.
That amount of delusion is absolutely staggering. What more can I say. Anything other than flipping burgers takes time and effort and brains or brawns and sees some people fail. The competitive activities have higher failure rates. The more competitive, the lower the success rate... Why am I even typing this...
But sure, I'm going to keep seing thousands of newbs land every months, and chase the twitter expert, or look for the person that joined 2 months ago and said "price go up" just before the price goes up (not joking I saw someone like this recently and the update idea after the breakout had literally in the first line "Volume is low not a good buy I am looking to short", literally the first line, and newbs that saw "green candle. price go up" are celebrating the "great call").
Absolute pieces of ****. I don't always read everything, or watch entire videos, I read diagonally and I think every one should, I pick bits in articles I am interested in, and I think that's what people should do but maaan. If you're not even going to bother reading the first sentence and are jsut looking for the traders with the most successful apparent last few calls, you really deserve to lose everything.
It's like the USO buyers that didn't bother finding out what they were buying. Or stock & FX traders that never touched a future and then went all in Oil without learning what it was or anything.
That's really insane to me. They certainly deserve to get wiped out.
If I may give some tips around all this: