I believe that the percentage of successful traders in the long term is more than 1%, ~ 5%. In the long term, very few strategies have the right to exist.
In the short term, the number of successful traders is much larger, especially in the interval of 3-6 months, sometimes their strategies bring big X's, but in the long term they cannot maintain profitability due to psychology and loss of concentration, in my opinion.
Who is this 5% in the long term? Well, if we discard all market makers, traders from hedge funds or banks, and take into account only retail traders, then these are the traders who have balanced risk management and money management close to the ideal. Although there is no limit to perfection.
In the short term, the number of successful traders is much larger, especially in the interval of 3-6 months, sometimes their strategies bring big X's, but in the long term they cannot maintain profitability due to psychology and loss of concentration, in my opinion.
Who is this 5% in the long term? Well, if we discard all market makers, traders from hedge funds or banks, and take into account only retail traders, then these are the traders who have balanced risk management and money management close to the ideal. Although there is no limit to perfection.
Well yes, in short-term the number can be very large, but thats not representative of actual situation. I think there was a study also that had proven that a monkey (literally) can trade better than Wall Street trader, sometimes even outperforming him. But I doubt you would call a monkey to be a successful trader
To be in that 1.6% a trader needs to have persistent positive stable, net of all fees and expenses, returns. Risk management + money management is fairly simple and nowadays can be well automated, but even those people loose money. And hedge funds and instituions also actually - not all of them is able to earn decent returns (when they earn).1.6% of the winning traders are whales and whale followers. Yes, im not kidding, this is true of any financial market. That is why there is a very good saying in the financial markets, that the more money people have, the richer they are.
Margin trading, Futures, BO are all gambling; The market and rich institutions are the bookmakers so your chances of winning are very low.
- I just want to tell the truth and hope the new traders here must be very focused when trading and never be subjective. Getting rich by trading is a long project and you have to sacrifice a lot to become professional. Trust me guys
Margin trading, Futures, BO are all gambling; The market and rich institutions are the bookmakers so your chances of winning are very low.
- I just want to tell the truth and hope the new traders here must be very focused when trading and never be subjective. Getting rich by trading is a long project and you have to sacrifice a lot to become professional. Trust me guys
I don't really agree with all. Yes, you said correctly that the more money you have - the more money you can make (not always though, look at Lehman Brothers among others), and those whales, etc. as I showed above actually underperformed retail traders.
Margin, futures, options, structured products, derivatives - actually very good source of alpha. I personally know people who got very rich by trading options. Yet not too many people can really understand behind the simple "call is a right to buy asset in the future". There are so much more into that. That's why there's less competition in that area I guess.
As for long-term in trading - very right. Can never get rich overnight with anything.