# What % of traders fail?



## itsybitsybob (6 April 2010)

I'm curious as to what the % is of winners and loosers in the trading game. Does anyone have any numbers? I think I read somewhere that only 10% of traders in CFDs make money, which seems crazy! As in, what a crazy waste of money! And I bet forex is even less!


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## Wysiwyg (7 April 2010)

*Re: What % of traders fail...*



itsybitsybob said:


> I'm curious as to what the % is of winners and losers in the trading game. Does anyone have any numbers? I think I read somewhere that only 10% of traders in CFDs make money, which seems crazy! As in, what a crazy waste of money! And I bet forex is even less!




Trading securities successfully is something one has to know how to do. Why the likes of myself have failed is because of not knowing. As for percentages, the number I see bandied around is about 10% are successful. I think that percentage is higher at about 20 - 25%. 

People lose more often because they don't know and believe me there is a lot to know.


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## sleepy (7 April 2010)

*Re: What % of traders fail...*

https://www.aussiestockforums.com/forums/showthread.php?t=18658

sleepy


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## tech/a (7 April 2010)

> Overall, the statistics... "strongly suggests that the regular traders relieved the one-time traders of their money and then deposited it with the firm in the form of commissions."




From the handfull of people Ive know in brokerage over the years this comment would be far and away succinct in its explaination from what I have gathered through discussions over the years.

There have been a few studies but would be interesting if some academics did a real one!


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## Trembling Hand (7 April 2010)

Here is a great study done by a bunch of people who work in academia from 2004,

http://faculty.haas.berkeley.edu/odean/papers/Day Traders/Day Trade 040330.pdf

Its specifically on day trading but you would think that's it applies to any form of shorter term trading.



> We analyze the performance of day traders in Taiwan. Day trading by individual investors is prevalent in Taiwan – accounting for over 20 percent of total volume from 1995 through 1999. Individual investors account for over 97 percent of all day trading
> activity.






> About *one percent of individual investors account for half of day trading and one fourth of total trading by individual investors*. Heavy day traders earn gross profits, but their profits are not sufficient to cover transaction costs. *Moreover, in the typical six month period, more than eight out of ten day traders lose money*. Despite these bleak findings, there is strong evidence of persistent ability for a relatively small group of day traders. Traders with strong past performance continue to earn strong returns. The stocks they buy outperform those they sell by 62 basis points per day.




What they found is that only a small amount of traders made money after transaction cost. Yet most of the profitable traders income was less than half the average wage.

Only 386 made consistent profit out of 50,000 and had income that was nearly 4 time the average wage. They also accounted for most of the volume - go figure!!


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## awg (7 April 2010)

Then there is the issue of complete failure vs relative or qualified failure.

This can be the difference for example of blowing up your account

Stop trading due to mounting losses

Underperform benchmark ie cash or index

Not outperform Benchmark enough for it to be worthwhile.

I have seen a figure of 97% closure of CFD accounts bandied around.

Of the 3% remaining open, probably many would be lineball


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## Knoxy (7 April 2010)

Agree that failure is relative. If using risk money and highly speculative method some may accept failure as ok 'I took a punt and lost, but could have made it big'. Lotto mentality.

A harder question to answer, but to most here probably more relevant could be 'What% of traders fail after they have reached a suitable level of knowledge to trade in the first place and from then are using a consistent trading method?'. Who knows could be low, say, 30%.

I trade forex and through forums etc. can see a large group that see it as get rich quick or through their comments show they're dangerous to themselves or are always in search of THE method and constantly chop and change. I find fx trading easier than equities, guess the poor stats are from the number of fools attracted by the high leverage.


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## IB12 (7 April 2010)

Hello all,

In light of the question in this thread I was just thinking about applying for a position at Propex in their grad program. 

However I'm apprehensive about what happens if don't make it and fail to exceed my costs vs. trading profits. Do all the grads they take on succeed? I would think not. So where do they end up going?

I know that there are guys on here who know about Propex, I was just wondering what other avenues in terms of career path can you go should you not make it. What happened to people who didn't make it, where have they ended up?

Because it is a bit of a risk in terms of career/CV wise b/c the skills you learn aren't transferrable and the habits are a bit contrary to what other financial services organizations need (i.e. team work, client service, management skills). 

Thanks.


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## Largesse (7 April 2010)

100% of propex traders fail, worst gig in the world


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## IB12 (7 April 2010)

I've been doing well personally trading my personal account. 

However, it's just I'm not arrogrant to think that all will work out well ... because the statistics and odds are against me.

Does anyone know how long they keep you for, and mentor you and help you try to succeed before they move you along?


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## cutz (7 April 2010)

Largesse said:


> 100% of propex traders fail, worst gig in the world




Are you for real Largesse ?

How does the outfit pull a profit.


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## SmellyTerror (7 April 2010)

Trembling Hand said:


> Here is a great study done by a bunch of people who work in academia from 2004,
> 
> http://faculty.haas.berkeley.edu/odean/papers/Day Traders/Day Trade 040330.pdf




Also interesting from that study is that "occasional" traders were almost universally wiped out over time, which reinforces the earlier view that occasional traders are food.

For the heavier users, there was a much more promising 20% or so who turned a profit. It wasn’t a great profit, but it was something. If I can add a third of the national mean wage to my income from day-trading (assuming that a fair proportion of those regular traders have their day job, too), then I won’t be too upset. Not my aim, but it’s not a crushing defeat either.

I think the lesson from this is that dedication and experience counts. Which should be obvious, but for some reason isn’t to a lot of people (me included, at times). Look at everyone trawling for an indicator, reading MORE books and signing up for MORE courses. Nothing in this study is saying “the people who used the right indicator or took the right course made money”. It’s saying “only the people who traded enough *even had a chance *to make money”. And of the people who did the time, only a few of those did really well.

…but those people COULD do really well, consistently. I think that’s promising.

All of that tells me to get off my **** and on to the sim.


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## skyQuake (7 April 2010)

cutz said:


> Are you for real Largesse ?
> 
> How does the outfit pull a profit.




Desk fees of course!
But largesse is talking tongue in cheek


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## cutz (7 April 2010)

skyQuake said:


> Desk fees of course!
> But largesse is talking tongue in cheek




So what's the deal,

You pay a fee to work there ?

What sort of fees are we looking at, can anyone work there (within reason). ?


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## vincent191 (7 April 2010)

Knoxy said:


> I trade forex and through forums etc. can see a large group that see it as get rich quick or through their comments show they're dangerous to themselves or are always in search of THE method and constantly chop and change. I find fx trading easier than equities, guess the poor stats are from the number of fools attracted by the high leverage.





I agree.....get rich quick and high leverage goes hand in hand and accounts for most failures. In my early days I go for the maximum leverage hoping to get maximum profits for a minimum outlay, this has resulted in many losses.

Even if I did picked the right trend overall, I often get wiped  out  because my position will only allow a maximum5%  adverse movement against me. So unless I get it right from the start any short term adverse movement would wipe me out completely and I cannot recover from any subsequent favourable  movements.

I put my failure to too high leverage hoping for maximum gains. You may ask, if this is the case then why don't I lower my leverage and put in a bigger deposit? I did, but I started losing even more when trades did not go my way.

I have learnt my lesson......no more trading for me. It is not easy to give up......my tendency was to try and get my money back  and it has resulted in me losing even more money.

My philosophy now is not to be too greedy, I now believe in the "time in the market" concept. I guess I wasn't cut out for short term trading.

I am happy now but I would have been a lot happier had I not gone into highly leveraged short term trading.


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## tminus (7 April 2010)

The average portfolio in ASX game is 52,600 (from a start of 50,000) 6 weeks into competition. Which is clearly not a failure.


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## Trembling Hand (7 April 2010)

tminus said:


> The average portfolio in ASX game is 52,600 (from a start of 50,000) 6 weeks into competition. Which is clearly not a failure.




*GAME *being the word thats important here.


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## awg (7 April 2010)

tminus said:


> The average portfolio in ASX game is 52,600 (from a start of 50,000) 6 weeks into competition. Which is clearly not a failure.




It IS a failure though.

A relative failure, as that is a 5% return, and the XAO is up more than that in the last 6 weeks.

Just having my money in STW and playing golf, I would be ahead.


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## So_Cynical (7 April 2010)

tminus said:


> The average portfolio in ASX game is 52,600 (from a start of 50,000) 6 weeks into competition. Which is clearly not a failure.




383 dollars a week assuming 300 in brokerage. :dunno: gota remember the market has had a run up in the last 6 weeks so anyone just buying wow, Santos and a couple of banks would of made that much.


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## kazzumX10 (15 April 2010)

yeah its true but in a trending market like we are in now anyone can make money


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## tech/a (15 April 2010)

kazzumX10 said:


> yeah its true but in a trending market like we are in now anyone *can* make money




SHOULD.


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## >Apocalypto< (15 April 2010)

kazzumX10 said:


> *yeah its true but in a trending market like we are in now anyone can make money *





ummm don't think so. plenty of people lost money over the last bull-market. you still have to be able to time your entry and be able to hold the position to reach a profit and close with it. sounds easy, just all the CFD traders.


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## Wysiwyg (15 April 2010)

kazzumX10 said:


> yeah its true but in a trending market like we are in now anyone can make money




I would like 100 bucks for every stock I have bought in an up trending market that tracked sideways or declined in price. 

Nice bait though.


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## IFocus (16 April 2010)

Started over ten years ago met thousands along the way know of only two others personally that make a serious return "trading" over a number of years out side of this forum.


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## nioka (16 April 2010)

kazzumX10 said:


> yeah its true but in a trending market like we are in now anyone can make money





  "Know when to hold em,
   Know when to fold em"

That is what makes the money. The big money was made by holding your nerve and trading on the way down,staying in the market and accumulating during the lemming rush.

That is followed by not taking small profits and holding stocks based on their fundamentals. 

eg. A million CER cost $26,500 now worth $210,000 and still way under the NTA value. Could be worth a million in another year.
     A million ADI cost $70,000 now worth $280,000 and waiting on flow results. Could be worth a million or two by years end. The same goes for their partners AUT and EKA. 
     Stocks like LYC, VPG, BUL, EDE, TAS to name a few that were or are going cheap and have sound fundamentals are "investor" stocks. Those trading them often got/get burnt. So why trade unless it is to accumulate.

If your answer is "a lot of investors got burnt too". Think why. Did they borrow to invest?. Did they do their own research or rely on dodgy advice?. Did they panic and sell in the lemming rush?. Were they impatient?. Did they have the courage to average down and hold.

Most traders lose money as do most gamblers. They live off one another, for one to prosper another will lose. Most investors will gain through the productivity of their investment.


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## chrislp (17 April 2010)

nioka said:


> The big money was made by holding your nerve and trading on the way down,staying in the market and accumulating during the lemming rush.




I disagree, trading on the way down is what kills a lot of traders. The big money is made by getting out when a bear market is starting & getting back in at the early stages of a new bull market. Simple trend following.

It goes back to your quote "Know when to hold em,Know when to fold em".
If you wouldn't "fold em" during the 08 bear market under what circumstances would you ever fold?


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## >Apocalypto< (17 April 2010)

chrislp said:


> I disagree, trading on the way down is what kills a lot of traders. The big money is made by getting out when a bear market is starting & getting back in at the early stages of a new bull market. Simple trend following.
> 
> It goes back to your quote "Know when to hold em,Know when to fold em".
> If you wouldn't "fold em" during the 08 bear market under what circumstances would you ever fold?




sounds easy i spouse you got out day 2 of the meltdown huh! the question for you is, when is what could be a normal correction see for 03 -08 a melt down??? When it hits that pain point and your emotions are ruling your head do u pull the pin after losing 3 years of sitting or pray that's the bottom till your in a massive loss. Did you have long term positions into the melt down?

it's always easy to say what to do after the event.


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## >Apocalypto< (17 April 2010)

chrislp said:


> I disagree, trading on the way down is what kills a lot of traders.




There's nothing wrong with covering or shorting to profit in a turn of market.


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## chrislp (17 April 2010)

>Apocalypto< said:


> sounds easy i spouse you got out day 2 of the meltdown huh! the question for you is, when is what could be a normal correction see for 03 -08 a melt down??? When it hits that pain point and your emotions are ruling your head do u pull the pin after losing 3 years of sitting or pray that's the bottom till your in a massive loss. Did you have long term positions into the melt down?
> 
> it's always easy to say what to do after the event.




Speak for yourself. 

I started trading in 08 so I wasn't in. However I have designed my own rules which would (in hindsight of course) have gotten me out of all long positions firstly in July 07 & then again in November 07 & I would have started taking short positions then. 

Hindsight aside I started trading long again in April 09. Simple trend following, I'm sure most trend followers would have had similar strategies.



>Apocalypto< said:


> There's nothing wrong with covering or shorting to profit in a turn of market.




To clarify I mean averaging down is a killer for most. Throwing good money after bad IMO.


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## >Apocalypto< (17 April 2010)

chrislp said:


> I started trading in 08 so I wasn't in. However I have designed my own rules which would (in hindsight of course) have gotten me out of all long positions firstly in July 07 & then again in November 07 & I would have started taking short positions then.




I know people that went through it, some are ok now others not. the emotional roller coaster that I saw was not pretty. where they at fault for getting caught i don't know and won't judge cuz I still lose trades and make mistakes.

so unless you lived it, I am not that interested to hear your hindsight of what you should have done. as you were not in it to know how it felt.

so you put your line on at the 09 bottom based on what you thought was value and a bottom, you got lucky like many others, so you have done well, well done t o u that call. so if it all began again on Monday I will love to see how you deal with it. That's if you still have your full line from 09, yeh i know you will post a reply with your exit plan, *but when your in the thick of it it's funny how emotions cloud the plan!
* just ask many of them that went through the last crash.

cheers


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## chrislp (17 April 2010)

>Apocalypto< said:


> so unless you lived it, I am not that interested to hear your hindsight of what you should have done.




You asked me "when is what could be a normal correction see for 03 -08 a melt down???" 

I answered your question, if you are not interested in the first place then please don't waste my time.



>Apocalypto< said:


> so you put your line on at the 09 bottom based on what you thought was value and a bottom, you got lucky like many others, so you have done well, well done t o u that call. so if it all began again on Monday I will love to see how you deal with it. That's if you still have your full line from 09, yeh i know you will post a reply with your exit plan, *but when your in the thick of it it's funny how emotions cloud the plan!
> * just ask many of them that went through the last crash.




No my trading style is different but as you are not interested I don't have anything more to add.


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## tech/a (17 April 2010)

chrislp said:


> I disagree, trading on the way down is what kills a lot of traders. The big money is made by getting out when a bear market is starting & getting back in at the early stages of a new bull market. Simple trend following.
> 
> It goes back to your quote "Know when to hold em,Know when to fold em".
> If you wouldn't "fold em" during the 08 bear market under what circumstances would you ever fold?




No I agree.
The question of course is when is it serious enough to liquidate your portfolio. Not as simple as you would imagine in Realtime.
I did mine and while I avoided massive drawdown I missed the move from 3220 to 5000 (From my portfolio)--traded it though with much smaller funds.

More to the point is knowing when to load up and when to pullback during periods of normal market fluctuations.
Smoothing the equity curve is every traders challenge.

Most traders trade more as a hobby it really is those traders who look to trade enough to ***influence their lifestyle *who need to be in the group of % failure.

I would suggest those who aim to run a business ***capable of generating enough income to increase their standard of living.*This group as a whole would be very small when compared to "Traders who fail"

If successful meant success for these types of **business traders then I would say Traders that fail are way over 90%


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## Wysiwyg (17 April 2010)

chrislp said:


> *Hindsight aside* I started trading long again in April 09. *Simple trend* *following*, I'm sure most trend followers would have had similar strategies.



Rolling on the floor and laughing out loud at that. So you didn't  like the December 08 trend change? Oh wait (LOL) you knew that wasn't going to be the market low. 
	

		
			
		

		
	






> I started trading in 08 so I wasn't in. However *I have designed my own rules which would (in hindsight of course) have gotten me out of all long positions* *firstly in July 07 & then again in November 07* & I would have started taking short positions then.




So which one would you choose (in hindsight of course 
	

		
			
		

		
	



	

		
			
		

		
	
 ) July 07 or November 07.


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## chrislp (17 April 2010)

Wysiwyg said:


> So you didn't  like the December 08 trend change? Oh wait (LOL) you knew that wasn't going to be the market low.




Not quite sure what you mean. The trend was still down in Dec 08 IMO.




Wysiwyg said:


> So which one would you choose (in hindsight of course




Looking for short setups July -September 07, long setups September 07- November 07 & switch again.

Have you ever heard of a trend filter? I use it to only take positions in which way the market is headed.


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## Julia (17 April 2010)

tech/a said:


> No I agree.
> The question of course is when is it serious enough to liquidate your portfolio. Not as simple as you would imagine in Realtime.
> I did mine and while I avoided massive drawdown I missed the move from 3220 to 5000 (From my portfolio)--traded it though with much smaller funds.
> 
> ...



Agree.  I did much the same.  Liquidated all but two stocks that were still going up in Jan 08, *but as a measure of capital preservation, and in light of global conditions which indicated a complete meltdown, but I was by no means sure of this.*  Imo we can only make the best decisions possible with what we know at the time.



chrislp said:


> Not quite sure what you mean. The trend was still down in Dec 08 IMO.



Agree.

Wysiwyg:  I'm not sure why you're displaying so much mirth at chrislp's comments.  They make pretty good sense to me.
What do you think he/she could have done to achieve a better outcome?
Or I, for that matter, or Tech, given we did pretty much as Chrislp is suggesting?


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## tech/a (17 April 2010)

> Have you ever heard of a trend filter? I use it to only take positions in which way the market is headed




Yeh but I want yours---the one that tells you before it happens (The trend!)

Julia 
As you know we did not know with certainty that there would be such a large turn in the market.
Both you and I, I'm sure didnt wish to place at risk enough $$s that severe loss would have effected our life styles.
As Ive always said catching those outlier moves that change lives is a matter of placing ourselves in front of on coming trains,so that we are swept away with them when they come.
Trick is to find the train and be prepared to hop off it when its likely to hit you on the way back!


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## Wysiwyg (17 April 2010)

Julia said:


> Wysiwyg:  I'm not sure why you're displaying so much mirth at chrislp's comments.  They make pretty good sense to me.
> What do you think he/she could have done to achieve a better outcome?
> Or I, for that matter, or *Tech*, given we did pretty much as Chrislp is suggesting?



Hi there Julia,

Poster Tech/A noted he did not re-enter until 5000 points so count him out for "entering at the start of a bull market".

This quote below is bollocks. If anyone can identify the start of a bull market/bear market they need not be here telling all they can. Best be sipping pina colada on the beaches of Barbados. 



> I disagree, trading on the way down is what kills a lot of traders. *The big money is made by getting out when a bear market is starting &* *getting back in at the early stages of a new bull market.* Simple trend following.




Simple trend following.


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## tech/a (17 April 2010)

> Poster Tech/A noted he did not re-enter until 5000 points so count him out for "entering at the start of a bull market".




You dont read all that well do you.


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## tech/a (17 April 2010)

You may wish to read these threads where the truly impossible according to you in fact is possible.

Pass me the Pina Colada

https://www.aussiestockforums.com/forums/showthread.php?t=6211

AND

https://www.aussiestockforums.com/forums/showthread.php?t=1134

All before it happened.
Enjoy.


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## Wysiwyg (17 April 2010)

tech/a said:


> You may wish to read these threads where the truly impossible according to you in fact is possible.
> 
> Pass me the Pina Colada



You got nothing new to add here so move along.


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## chrislp (17 April 2010)

Thanks Julia, I don't know why some people can't understand it.



> Yeh but I want yours---the one that tells you before it happens (The trend!)






Wysiwyg said:


> This quote below is bollocks. If anyone can identify the start of a bull market/bear market they need not be here telling all they can. Best be sipping pina colada on the beaches of Barbados. Simple trend following.




You can pick up some great info from the links below. You should have a read.

http://www.facebook.com/notes/the-chartist/asx-myth-busters/177606291593

http://www.facebook.com/notes/the-chartist/newtons-first-law/172404281593

http://www.facebook.com/notes/the-chartist/eggs-trends/166718361593


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## Wysiwyg (17 April 2010)

chrislp said:


> You can pick up some great info from the links below. You should have a read.






> Step 1: Place your finger on the chart at the perfect hindsight buy point.
> Step 2: Now place it on the perfect hindsight sell point.
> Step 3: Move both points 5 mm to the right.
> 
> ...




Ha.  : Thanks bloke. His ability is commensurate with market experience. There is a lot of fantastic reading out there. Good luck with it all. 
Ciao.


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## yonnie (17 April 2010)

I must say you really dont read that well.

Tech said he traded it but in a much smaller way.


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## chrislp (17 April 2010)

Wysiwyg, rather than discredit all opinions lets hear some of yours in relation to the topic.


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## Wysiwyg (17 April 2010)

yonnie said:


> I must say you really dont read that well.
> 
> Tech said he traded it but in a much smaller way.



I don't recall whistling.


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## Wysiwyg (17 April 2010)

> Wysiwyg, rather than discredit all opinions lets hear some of yours in relation to the topic.




I made the second post and I don't discredit all opinions.


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## tech/a (17 April 2010)

Wysiwyg said:


> You got nothing new to add here so move along.




Any fool can criticize, condemn, and complain - and most fools do.

I'm all in favor of keeping dangerous weapons out of the hands of fools. Let's start with typewriters

Another Pina Colada---Cheers.


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## Julia (17 April 2010)

Wysiwyg, isn't it possible for you to simply disagree with someone without sarcasm and mockery?
We can all learn from what other people do from time to time.

Btw, just how did you manage your own p/f during the GFC?

And as a PS, I doubt that anyone espousing the usefulness of basic trend following is actually claiming to be able to pick the exact top or bottom.
I certainly didn't, but I still preserved most of my capital, ready for buying back in when the uptrend returned.


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## pixel (17 April 2010)

IMHO it's not so much a question of "*what % of traders fail*", but *"What are the causes for so many traders failing?"*
We will never really know for certain, how many traders, or what percentage of start-ups are failing. Two reasons:

Firstly, "failing" is a relative assessment. One person may lose a small amount and give up because they realise it's not their cup of tea. I take my hat off for such realistic self-assessment. Another person may have a big fortune to lose and muddle along for a long time without fully going broke.
Secondly, even if we knew for sure that a much bandied-about figure of 80% were correct - what would that mean for us personally? What's the conclusion a newbie could possibly draw from such a number?

No - *I reckon we should discuss why some people fail and why some people succeed*. Ignoring pot luck, which does play a role sometimes, IMO insufficient preparation, excessive expectation, and too much belief in marketing hype are the key reasons for failure. Pig-headed insistence in mantras like "I am right. My broker is right. This commany's management is right." or "This share is now so wildly undervalued that I have to average down." are a definite shortcut to Skid Row. A few others are collated in a short article Dangerous Influences.

Leaves ways to ensure we do NOT succumb to those dangers:
A good start may be a collection of "open secrets" one very successful Dude published years ago on his blog site 20 Rules of Trading, which were expanded by some other traders that're no slouches either - inasmuch as I know they're still trading full-time and living not badly off the proceeds.

Specifically what can be done in a Bear Market, I can only report what I have done:

When the indicators sugegsted to me a severe downturn may be about to hit us, I liquidated most of my share positions and started 2008 with about 95% cash.
Then I changed my market scanning techniques and trading strategy to identify shares that would most likely show the beginning of a swing upwards. Read Darryl Guppy's "Bear Trading" book for details. All through 2008 and early 2009, I was happy with small upswing profits and took profit sometimes just after a day or two as soon as some obvious resistance was hit. Requires an eye on the ball and definitely live data. To a limited extent, I traded Short, using CFDs.
When my charts suggested the bottom was in, I gradually reversed to the old strategies and was fully invested by end of March 2009.
FWIW, right now, I'm again about 75% in cash. Draw from that whatever conclusion you wish.


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## Wysiwyg (18 April 2010)

Interesting thoughts there Pixel.



> No - I reckon we should discuss why some people fail and why some people succeed. Ignoring pot luck, which does play a role sometimes, IMO insufficient preparation, excessive expectation, and too much belief in marketing hype are the key reasons for failure.



These reasons seem quite sound on the surface but I wonder what determines "insufficient, excessive and too much belief"?

Alright I will tell you. It is only "after" an event has taken place can these adjectives be assigned as reasons for failure. "Because we are dealing with a situation that isn't completely under our control."
If proceedings turned favourably for the participant, would they then have good preparation, correct expectation and the right amount of belief?


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## Wysiwyg (18 April 2010)

Julia said:


> Wysiwyg, isn't it possible for you to simply disagree with someone without sarcasm and mockery?



 Yes Julia. Sometimes the cheeky boy inside pops up. I will check myself to a certain extent if I remember in the future. 


> We can all learn from what other people do from time to time.



This is true. Did you see anything to learn from or just someones hindsight view? Hmmm!


> Btw, just how did you manage your own p/f during the GFC?



I chose to hold through what turned out to be a fairly decent market decline. I learned much about myself and the nature of the securities markets. 


> And as a PS, I doubt that anyone espousing the usefulness of basic trend following is actually claiming to be able to pick the exact top or bottom.
> I certainly didn't, but I still preserved most of my capital, ready for buying back in when the uptrend returned.



No Julia they are not. If we quote the sentences in context then things such as:


> "Know when to hold em,Know when to fold em".



and 


> The big money is made by getting out when a bear market is starting & getting back in at the early stages of a new bull market. Simple trend following.



are, well what can I say? Educational, incisive, wise? Simple ... trend ... following! What'sat?


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## pixel (18 April 2010)

Wysiwyg said:


> Interesting thoughts there Pixel.
> 
> 
> These reasons seem quite sound on the surface but I wonder what determines "insufficient, excessive and too much belief"?
> ...



Definitely not, wysiwyg;
Seeing the time you've been participating in these discussions, I'll give you the benefit of assuming you've gathered sufficient experience as a Trader. If so, you will know how much time and independent critical analysis of market factors is required to "get more right than wrong"; you will also know that you can "guess" with a high rate of success where the market in general and a particular stock specifically will most likely be heading. 

As a Technical Analyst, I know that chart setups rarely repeat in exact detail, but "History rhymes" - at least in my experience. And it's on the basis of my personal experience that I take part in these Forum discussions. Presumably, we all do.


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## Wysiwyg (18 April 2010)

pixel said:


> As a Technical Analyst, I know that chart setups rarely repeat in exact detail, but "History rhymes" - at least in my experience. And it's on the basis of my personal experience that I take part in these Forum discussions. Presumably, we all do.



Yes I think so too.


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## chrislp (18 April 2010)

Wysiwyg said:


> Sometimes the cheeky boy inside pops up.


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## nunthewiser (18 April 2010)

Personally tend to agree somewhat with that internet troll wysiwyg 

from what ive read of chrislp,s posts they have been nothing more than the normal hindsight genius statements that bore me to tears............ yes we all know sell at the top and buy at the bottom blah blah blah..........but anyone of us internet gurus can spruik how great we were after the fact.

watch this............

yes follow the trend until the end like i always do , i sold at the top and bought at the lows .i am great ..... thankyou.


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## tech/a (18 April 2010)

> This is true. Did you see anything to learn from or just someones hindsight view? Hmmm!




Your one of these people who make assumptions without taking the time to investigate. Go below and to post 28 and show me the hindsight analysis on this post----note the date of the post.

Your own bias clouds you judgement and ability to grow.

https://www.aussiestockforums.com/forums/showthread.php?t=6211&page=2


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## yonnie (18 April 2010)

someone will grow fastest if open to other views without discarding it straight away. do your research instead; you might hit gold somewhere.

pixel: could you throw up a chart and point out your technical indicators that indicated a slump was coming plus your thoughts at the time? you must have been pretty sure to dump most of your shares.
very interested in learning about the overall market..........


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## Wysiwyg (18 April 2010)

tech/a said:


> Your one of these people who make assumptions without taking the time to investigate. Go below and to post 28 and show me the hindsight analysis on this post----note the date of the post.
> 
> Your own bias clouds you judgement and ability to grow.
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=6211&page=2




I can tell you now I will never use Elliot Wave in my analysis. Just as I will never use the zig-zag indicator. There are multiple analysis methods and Elliot Wave as an option is a definite never ever ever for me.


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## Wysiwyg (18 April 2010)




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## tech/a (19 April 2010)

Wysiwyg said:


> I can tell you now I will never use Elliot Wave in my analysis. Just as I will never use the zig-zag indicator. There are multiple analysis methods and Elliot Wave as an option is a definite never ever ever for me.




Of the multiple analysis methods which do you use?
How do you use it/them. (as in application).
Do you trade?/Invest? or do you simply gather information.


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## nickemp (28 April 2010)

My view is that most failures come from a lack of Capital and understanding.  

Small accounts are almost doomed to failure from trying to climb over brokerage and other fixed costs.

Risk vs position sizing, money management, expectancy and the mathmatical possibility of strings of losses rarely feature in the lexicon of trading newbies.

Not having a written plan (I must do that soon)

I submit this not as a great trader but at least I have survived for 7 or 8 years and I am getting better

Nick


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## tech/a (28 April 2010)

What is failure?


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## roland (28 April 2010)

tech/a said:


> What is failure?




failure would be, to not learn from your mistakes


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## BuffettFan (28 April 2010)

All of them fail eventually. They fail in two ways: either fail to do as well as the relevant index or they lose all their capital. You only hear them talk about the good times, never the losses.
The great investors like Graham and Buffett have made observations that they don't know anyone who has made lasting money by trading.
There is a book about Australia's top ten traders that was written in the late 90s. I can't remember the exact title. Someone did a followup a few years later and they had all failed!

At about the same time, I did get sucked in to investing in a trading fund setup by a broker, which was run by a professional trader who had had a very good 5 year record. He did well for about a year and then started losing money. After client complaints, the broker closed the fund and I received about 95% of my original investment. I consider myself very lucky to have learnt the trading lesson so cheaply.

When I retired in 2001, I spent a full year doing nothing except investigating all the possible trading systems and doing some comprehensive simulations. (I do have the necessary maths, accounting skills and business knowledge.) After tax and brokerage, none matched a passive buy and hold of the All Ords. If you don't believe me, put all your money in an index fund for a year or two and do paper trades.

It's human nature to love to trade, so you have to fight the urge all the time. Just keep saying to yourself "where are all the customers' yachts!"


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## weird (28 April 2010)

BuffettFan said:


> All of them fail eventually. They fail in two ways: either fail to do as well as the relevant index or they lose all their capital. You only hear them talk about the good times, never the losses.
> The great investors like Graham and Buffett have made observations that they don't know anyone who has made lasting money by trading.
> There is a book about Australia's top ten traders that was written in the late 90s. I can't remember the exact title. Someone did a followup a few years later and they had all failed!
> 
> ...




A bit pessimistic Buffetfan, 

check out,

http://abrahamtrading.com/performance&accept=1

since inception, and return statistics,

   	                                               Abraham  	 S&P 500 	 GSCI
Average Annual ROR (since 1988): 	20.22% 	9.64% 	4.17%


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## ThingyMajiggy (28 April 2010)

And so it begins...

In the red corner....Investoooorrrrssss!!!


In the blue cornerr...Trraaaaddeeerrrss!!

:shoot: :sword:


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## gav (28 April 2010)

"Win or lose, everybody gets what they want out of the market. Some people seem to like to lose, so they win by losing money." - Ed Seykota


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## Wysiwyg (28 April 2010)

weird said:


> A bit pessimistic Buffetfan,
> check out,
> http://abrahamtrading.com/performance&accept=1
> since inception, and return statistics,
> ...



The Abraham Bear Cave.

Interestingly enough Weird, the figures do mighty well through the bear market. While the bounce from March 2009 has poor returns. Maybe I should send them my kick ass long system.


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## nickemp (29 April 2010)

tech/a said:


> What is failure?




I guess you never really fail unless you give up.  Running out of capital can be a snag though

Nick


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## Smile (29 April 2010)

tech/a said:


> What is failure?




Stop pussy footing around and making excuses!

Failure in the markets, is not making heaps of cash easily.
If you keep running out of money you keep FAILING!

We are all in this to make a quid without working to hard, admit it.


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## nomore4s (29 April 2010)

BuffettFan said:


> All of them fail eventually. They fail in two ways: either fail to do as well as the relevant index or they lose all their capital. You only hear them talk about the good times, never the losses.
> The great investors like Graham and Buffett have made observations that they don't know anyone who has made lasting money by trading.
> There is a book about Australia's top ten traders that was written in the late 90s. I can't remember the exact title. Someone did a followup a few years later and they had all failed!
> 
> ...





LOL, talk about blinded by your bias.

I love how investors idolise Buffett. Buffett is not an investor like you or me or the millions of Mum & Dad investors, he is a businessman - there is a huge difference.

Most people have no idea the sort of returns that are available to a good trader on markets like Futures (my bias). If I wanted to match the returns of the All Ords I'd only have to trade for 2 weeks of the year.

There are traders on this forum who would blow your mind if you knew the sort of income they were pulling out of the market year in year out.

And yes I also invest but my returns on that portfolio are pedestrian by comparison to my trading account.


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## nomore4s (29 April 2010)

Smile said:


> We are all in this to make a quid *without working to hard*, admit it.




The bold bit is exactly why most fail.


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## BuffettFan (29 April 2010)

Well, everyone is entitled to an opinion, but I am trying to focus on facts not opinions or biases.
All I am saying is that, after many years experience and simulations, I cannot find any way that short term trading is worthwhile, after taxes and brokerage.

I'll look at the Abraham record when I get time, but I usually find these sorts of results are pre tax and expenses. After these costs are taken out, the results usually underperform the market over any decent period.

I like Buffett because he started out as an individual investor and performed very well at that time.

If you have done well at trading, please share your annual return numbers (after expenses) for the last, say 20 years. I suggest that 16% pa is a reasonable benchmark for an individual.
No opinions please, just the numbers.


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## yonnie (29 April 2010)

nomore4s said:


> The bold bit is exactly why most fail.




exactly.....most see themselves trading on a cruise ship on the deck chair near the swimming pool with a cool drink.

it is possible (I`ve done it myself), but only after a lot of bloody hard work to get there where I am now.

you got to be almost a fanatic to succeed in this business.


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## yonnie (29 April 2010)

BuffettFan said:


> If you have done well at trading, please share your annual return numbers (after expenses) for the last, say 20 years. No opinions please, just the numbers.




what, for the last 20 years??? 

you better ask around at the retirement homes


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## BuffettFan (29 April 2010)

Well, anything under 5 years could be just luck. I have discovered that many systems work well for a few years and then fail. Fooled by randomness.

Thanks for the Abraham link. A quick analysis: if we assume 1% fee and a 30% tax rate, the Abraham result is an average return of 14% pa return for 1988 to 2009. Not failure, but an individual would want to do better than that to justify giving up the day job.


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## nomore4s (29 April 2010)

BuffettFan said:


> Well, everyone is entitled to an opinion, but I am trying to focus on facts not opinions or biases.




That's funny cause all I've seen from you is assumptions based on your bias.

The fact is you won't get 20 years from most traders because the methods used to trade now were not possible 20 years ago due to technology restrictions.


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## skyQuake (29 April 2010)

BuffettFan said:


> Well, everyone is entitled to an opinion, but I am trying to focus on facts not opinions or biases.
> All I am saying is that, after many years experience and simulations, I cannot find any way that short term trading is worthwhile, after taxes and brokerage.
> 
> I'll look at the Abraham record when I get time, but I usually find these sorts of results are pre tax and expenses. After these costs are taken out, the results usually underperform the market over any decent period.
> ...




The good ones turn to some kinda of fund managers generally. Brokerage sure does add up but most pros +ve expectancy takes into acct brokerage.


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## nomore4s (29 April 2010)

BuffettFan said:


> Well, anything under 5 years could be just luck. I have discovered that many systems work well for a few years and then fail. Fooled by randomness.
> 
> Thanks for the Abraham link. A quick analysis: if we assume 1% fee and a 30% tax rate, the Abraham result is an average return of 14% pa return for 1988 to 2009. Not failure, but an individual would want to do better than that to justify giving up the day job.




Again no understanding of what is possible by a good trader in say the futures markets. Of course systems fail after a while because market conditions change but a good trader adapts as market conditions change and continues to make money.

Trying to compare something a Fund can return to something a trader like TH can return is like comparing apples to oranges.


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## tech/a (29 April 2010)

Actually I agree with Buffett.
There arent that many around who would frequent a forum.

*I know *your not looking for opinion but offer up a reason for near to zero replies.

You would need to earn $65k a year to be on a basic wage thats 60% on 100K and 30% on 200k
3% on $2 mill.

Let me tell you that if you have 2 mill then you wont be remotely thinking of trading for a living.
You dont have to.

Facts are those that dont have to trade for a living are those who are most likley to succeed as they arent undercapitalised.

Undercapitalisation causes all sorts for business errors.


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## professor_frink (29 April 2010)

BuffettFan said:


> Well, everyone is entitled to an opinion, but I am trying to focus on facts not opinions or biases.
> All I am saying is that, after many years experience and simulations, I cannot find any way that short term trading is worthwhile, after taxes and brokerage.




Probably best that you stick with index investing then.  The failure rate for trading IS pretty high(though not quite as high as you first mentioned). Good luck with the research if you do continue to look at short term trading, you never know what you might stumble onto


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