What Percentage of New Traders Fail? (Part 3)

Today I continue with excerpts from a Forex website forum discussion in 2013. The initial post, which tries to rebuke traditional wisdom, is Post #1 here. Forum content is unscientific and open to scrutiny. Do your own due diligence and buyer beware.

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• Post #21, Jean:

     > The figures don’t show by how much the accounts
     > are profitable. Perhaps many are just slightly up in
     > % from the start of each quarter, and perhaps all the
     > slow and steady growth account holders don’t hang
     > out at net forums. Maybe the “95/99% of traders
     > lose” is inaccurate and really just a collective
     > anger/stressed/disbelief based view of this business
     > as so many guys that are both clever and dedicated
     > spend years at this and don’t cash in, but spend
     > a lot of time together on forums and collectively
     > agree on a 95-99% figure…?

• Post #22, Slim:

     > Those statistics don’t really mean much as far as
     > I’m concerned. Certainly, there will be a lot of
     > traders who jump in for three or four months and
     > quit. That significantly reduces the “success rate”.
     >
     > Trading is a profession (think doctor or lawyer).
     > You don’t have to go to college to be a good trader
     > but you’ll get your “trading degree” one way or
     > another [with tuition paid to the market].
     >
     > Most professionals spend years learning their
     > profession. What would be the success rate of a
     > surgeon after 4 months of learning? Some can
     > probably be a good trader in far less time than
     > it takes to be a surgeon but the idea is the same.
     >
     > Individual retail traders have the added burden
     > of becoming entrepreneurs—like an attorney going
     > into private practice rather than working for a firm.
     >
     > I would imagine that the success rate for traders
     > who take the time to learn and decide to stick with
     > it isn’t so different as the success rate for other
     > businesses: ~18 – 20%. You really can’t judge the
     > success/failure rate solely by the stats required
     > by the CFTC.

• Post #28, Dye:

     > Yet more and more people are still buying into this
     > long held rumor?? based on what facts? I would like
     > to see some stats other than broker numbers that
     > can be manipulated just like the price. With a
     > market that is so random how can we have such a
     > firm number of losers to winners.

• Post #29, Cold:

     > It makes no sense and I don’t buy it at all. Maybe
     > not 99% but more than 70%. I’ve been in the business
     > since 2003 and I can confirm from my own experience.

• Post #30, Slim:

     > The fact is, PEOPLE WILL BELIEVE WHAT THEY WANT
     > TO BELIEVE regardless of whether there’s anything to
     > substantially support the belief.
     >
     > I think I would have to agree with Cold: more than
     > 70% fail. However, I would like to know the success
     > rate of those who have toughed it out for at least
     > 3 years. I can only guess that the success rate gets
     > a little better.

I wonder what Cold and Slim would think about the Brazilian day trading study?

To be continued…