Why 95% of Day Traders Fail

The majority of traders in a zero sum game will lose money. That is the nature of the game. The best traders will capture the majority of the profits, and to capture that top position you can't be doing what everyone else is. For day traders to be successful they must accept this fact. It is only by finding deeper fulfillment in the struggle to become profitable that one can find the motivation and willpower necessary to become the best.

Hypothetical Performance Disclosure:

Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

[huntstoddard]

I more or less agree with what you said. Overall I think the market is (must be) zero sum, at least in the short term. That doesn't necessarily mean each niche of the market is zero sum. It's like the second law of thermodynamics, which states that an isolated system cannot decrease in entropy (disorder). That doesn't necessarily mean connected systems can't increase in order. To put this back in perspective, for instance, futures are used as hedging instruments for other investments. It may well be that the market as a whole is a zero sum game, while futures themselves are not. They could be a source of net profit for almost everyone. (They AREN'T, but that's not really the point.)

I think most beginners lose money due to lack of self control, lack of impulse control, lack of patience, and so on. They may be inexperienced, but let's face it. Almost anyone can make money in the market provided they wait until the idea moment. It takes very little experience to perceive a ripping market. Nearly anyone can hit the market buy button when prices are soaring and make a profit. Almost NOBODY has the patience to wait that long. The struggle for beginners is internal. It is truly a test of mental fortitude, or "getting your mind right".

Most people tank out long before they can master themselves.

[Luke_Nuke]

What's the difference between a trader who gives up after one year and another trader who keeps on going for 20 years while still being a trader who loses money overall? The first one was smarter. Also you can love the game all you want, this is not enough. Plenty of people who really love basketball and will never cut into the NBA. Plenty of other people who also love that game and are only commentators who don't actually play.

[JB-rmoc]

IT's not about what people see like support / resistance. It's about trade managements and when to take / not take them as well as the Risk/reward criteria. Each market also has it's own unique personality that people need to understand. For example the Russell 2K acts differently than the Treasuries and the techniques used on one won't necessarily for work on the other. Sometimes the smartest thing to do is, sit on the sidelines and not trade. Yet your mug says it all. "Traders gonna Trade" and that might be the difference between the 95 and 5. Just my opinion. All the best.

[jamesrice]

Hey Seth, Are you still interested in coding projects? If so, I have an original idea that I think traders would love to see developed. I believe you are right about how difficult trading can be however I think I can make things a little more manageable for retail traders. Looking forward to hearing from you, James

[danieljardan]

Good content!
I would say that your words are quite sincere about this subject. So yeah guys, no Lamborghinis for 95% of the traders, only shattered dreams :D
I feel like the more you learn about trading, the more you realize you don't know.