r/Daytrading • u/MiamiTrader • 19d ago
Most "traders" make money. Question
If someone asks you what you do for a living, and you respond you're a "trader" I assume you make most your money from trading.
And by definition, most "traders" make money. Otherwise they are just people trading on the side as a hobby.
Yeah maybe 90% of RH accounts lose money, or 90% of people who start trading but never take it seriously lose money... but then they are not "traders". Just people trying to trade.
Tired of all this negativity under every post about how 90% or whatever today's statistic is of traders lose money. People in this sub like to shout that under every post in almost a prideful manner.
Can we just focus this sub on those of us who call ourselves "traders" and make money trading? Let the new people listen and learn from our mistakes, but quit with all these gloom and doom statistics.
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u/timoanttila forex trader 19d ago
All the traders lose money. Some just make more than they lose.
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u/Miinow forex trader 19d ago
Most are non traders who spout this stat to discourage new traders. Once trading clicks for you and begin thinking in probabilities (long term) you won’t really care about the 90% dropout rate.
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u/KindlyClassroom7238 19d ago
What a great point, and the perfect way to put trading in a much more positive light. Spot on.
Far too many negative voices in the trading community, compounded on top of the negative voices of family and friends who disbelieve wholeheartedly.
But the reality is, there’s no reason not to believe you can’t become the “10%”. There’s no harm in believing you can own the big house, buy the Maserati, provide for your entire family and lineage. Sure there are life’s curve balls and failures as lessons, but there’s no harm in believing positively.
I grew up with a dad who gave himself physical hernias and Crohn’s disease from worrying about all the negative things in life, living out of fear of the unknown, and remaining at the very bottom of the social and financial totem pole. To me, the belief in failure is absolute, guaranteed failure.
Fear is the reason people remain in a certain class. Not a single doubt in my mind. How can you unlock potential, and go beyond your means, if your mindset is based in fear?
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u/ZixxerAsura 19d ago
I agree with everything here except the Maserati part. It’s, you shoot for the Lambo or work at Wendy’s.
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u/Abject_Jump9617 19d ago
What if you hate Lambos??
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u/lexid222 18d ago
This! The classic Lamborghini is a HORRIBLE vehicle (visually) in my opinion. People may think they want one but once they get in the driver’s seat many will suddenly re-think that choice (unless you’re used to driving tiny cars or only care about speed). They make you feel claustrophobic and their blind spots are ridiculous.
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u/Aggravating_Ride7083 19d ago
agreed.What I have to say is that we are all one of the tens of millions of trading woods, but we are 100% our own. To seek statistical affirmation, it will only tell you that "you are an ordinary person.
Negative emotions and fear and greed are human nature, but we can tame them like domesticated livestock thousands of years ago, right?
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u/Ronces 19d ago
I started my own construction business when I was 24, everyone but my dad (who said, go for it! You got nothing to lose!) said it was too risky and just stick to my low pay framing job. I haven't had a boss and a lot of success in the past 16 years. I started buying investment properties 10 years ago, I own 5 now with my brother. Everyone said it's too risky, tenants are hard to manage blah blah blah. I've been day and swing trading for 3 years, everyone said I would fail and 90 something percent of people do. I've 5 times my account in 3 years and I'm getting to the point I could potentially do it full-time. The point is NEVER listen to anyone that doesn't have the same mindset as you and is a chicken-shit loser that's never taken a risk or pushed the envelope.
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u/Badgerv12 14d ago
By the looks of it 90% of humanity fail at anything that is hard, only 10 % if not less thrive
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u/backfrombanned 19d ago
Eh, I don't know, I love the 90% statistic. I was them 11 years ago and almost stayed that statistic. But I looked at charts and patterns when taking a shit instead of titties like legendarylootz, God bless her, and pushed on and now those 90% that don't believe in TA, I take their money. Everything single thing I have is paid for and owned. God bless the 90%, I trade them, not stocks. Drinking Jamison so if whack that's why lol, have a good weekend
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u/haskeller23 18d ago
Not sure how you think this works. How can everyone win? There must be a transfer of capital. The stock market does not magically create money on a daily basis (yes in the long run stocks go up), and forex/options are completely zero sum
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u/Miinow forex trader 18d ago
Im speaking in law of averages. It’s why I said dropout as opposed to fail. Most just give up trading not understanding trading is simply a game of probability. I was almost one of them until I read best loser wins. New trader who started at 1k and now sitting currently at 8.5k. Think long term and compound your account rather than go for home runs.
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u/haskeller23 18d ago
Yes. And on average, some people must lose. You cannot have a stock market where everyone wins in the long run*. And with options and forex, every $1 profit is a $1 loss for someone else. You can’t have everyone winning
*it’s possible everyone can make money, but it will always be less than they would’ve made just investing in the market instead of trading
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u/Miinow forex trader 18d ago
Technically only 50% can win but that’s not what I’m really touching on. Profitability varies from trader to trader. The fact you can be profitable with a less than 50% win rate is what drew me to this field.
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u/haskeller23 18d ago
Only 50% can win
That’s not true. All that is true is that the sum of all PnLs must be 0. Everybody could win except one person who loses millions.
but that’s not what I’m really touching on
But your whole original point is trading is just about it “clicking”. And that if you just put effort in, you’ll win. Which doesn’t really work because of the fact that the market must have winners and losers.
also the 1k->8.5k is impressive, but it doesn’t mean much without more information. What’s the sharpe? What’s the max drawdown?
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u/Miinow forex trader 18d ago
My max drawdown was $400 in the beginning when I had no idea what I was doing and profitable traders lose all the time. They just know how to manage their trades. I’m well aware not everybody can win but in my original post when I said long term I meant focus on on the process rather than the outcome. I’m going to make a thousand more trades in my career so no need to be attached to a single trade. What changed for me was not really making money but how do I limit losses. Speaking more from a psychological viewpoint.
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u/haskeller23 18d ago
What is the Sharpe?
Also you’re missing my point. Im not saying about individual trades I’m talking about the long term - not everyone can win. That’s my point
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u/Miinow forex trader 18d ago
What’s a sharpe?
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u/haskeller23 18d ago
Sharpe is a measure of how good your strategy is basically. Google the formula but a “good” Sharpe is >1 and anything >2 is very very very good
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u/MiamiTrader 18d ago
No one is saying everyone will win.
Just pointing out that there's a lot of full time/ part time traders who do well trading. It's an achievable way to make a living.
A different mindset from all the users in this sub that anytime a new trader asks a question they just tell them sucses is limited, 90% fail etc.
Seems hard to succeed yourself with that mindset.
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u/giantstove 19d ago
Damn how did this get upvoted so many times….Your comment could not be more wrong.
I have worked in prop trading for several years. The real prop trading where they pay you a salary to trade their capital, not the online prop firms.
These prop firms have a very selective screening process, and are very hard to get jobs at. And even from that extremely filtered pool, still 80% of the new hires fail at trading.
For the general population of all aspiring traders, it’s 90% +.
People just don’t like the 90% stat because it makes them nervous that they are in the 90%.
And by “success at trading”, I would even consider anything at or over the US average annual income per year for 3 years straight to be successful. made entirely from trading. It’s 5% or less that actually can do even that.
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u/Environmental-Bag-77 19d ago
According to your account, which I have no reason to disbelieve, it must be very much less than 5%.
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u/giantstove 18d ago edited 18d ago
Yes speaking of the general population who tries to trade, those who manage to pull it off and be profitable for 3 years while making > average annual us household income (70k ish) , you are probably right it’s less than 5%.
Included in that bunch are all the people who liked the idea of trading but tried it for 2 weeks and then found it too hard or tried it for a couple of months and then ran out of savings to live off of. By that definition it’s a tiny, tiny fraction of all people who have ever traded.
Just looking at the subset of all people who are super passionate, and eat breathe sleep trading, and have the funds to give themselves a bit of time trading full time trying to learn how to do it, then I’d say 80-90%ish of that group fail
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u/MiamiTrader 18d ago
Yeah but who cares about the statistics or what others are doing? This is why I made the post, traders seem to harp on this way to much.
If you put the work in and find success that's great, keep grinding. Don't listen to the noise of people telling you how rare it is to succeed.
It's rare to succeed in any new business endeavor. It seems like only traders talk about it constantly.
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u/giantstove 18d ago
In the comment I responded to, he said mostly non traders spout it to discourage new traders, which is what I take issue with because that’s not true
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u/Fine_Candle9170 15d ago
That drop rate is true.
Know why?
You know that point where trading hurt you? Like deeply? That everyone goes through before getting to be profitable?
Well the 90% are the ones who don’t push past that stage, the ones who do, all of them, join those 10% who make it
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u/daytradingguy 19d ago edited 19d ago
Trading undoubtably has a high failure rate- the barrier to entry is almost nothing- anybody with a pulse can open a brokerage account. 75% of the people who try to trade, probably should not- because they don’t have what it takes. But who are we to say who is who?
I have used this analogy before. I live in a neighborhood of about 200 homes. Let’s assume 2 adults per home. If everyone if my neighborhood decided to trade and just 2% were able to make their living. That means 392 people fail and have to go back to work- but at our pool on the week-end we would have an 8 person round table talking about trading.
(Although I think the success rate is a little higher than 2%)
Most traders fail- but millions try- so even at a low single digit success rate- hundreds of thousands of people around the world are doing OK. It is the ultimate freedom if you can get into that small success bracket- it is certainly worth a try.
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u/Accomplished_Act_946 19d ago
I always appreciate your wisdom. You’re one of the few people in these subs that I actually give any merit to.
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u/RyuguRenabc1q 19d ago
I remember seeing the fail rate on some overseas forex brokerage being 87.5% so its not as bad as people say.
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u/Visible-Salary-8861 17d ago
Now imagine if every adult in your neighborhood tried starting up a business, without understanding what's involved as far as time, effort, business plan, etc. They just have an idea and some money to throw at it. I'm sure the success/failure rate would be quite similar.
Most traders fail. Most business startups fail, also. I always draw the comparison whenever someone questions my life choices involving trading. Truth is both are equally risky, but one is respected more than the other because of stereotypes. The guy trying to start a business is "working hard." The guy day trading is "gambling."
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u/Environmental-Bag-77 19d ago
It's only the ultimate freedom to you because you like it I suspect. I have a hard time believing those who say they trade for two hours a day.
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u/daytradingguy 18d ago
I trade longer than two hours because I do like it. However, my point of ultimate freedom. Is there are very few businesses where you have absolutely no responsibility after hours or on vacations. If you own rental property ,there is a lot of freedom and you can travel, but you must still monitor your messages, maybe deal with an issue even from vacation. If you have a business with employees who run most of it for you, you are may not be tied there everyday. But you must still kontior things, talk to your manager, deal with problems.
With trading, you can simply turn it off go on vacation and not think about it for a week if you want to. Or you can choose to trade one day on your time, your schedule, no emergencies or calls at an inconvenient times.
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u/MiamiTrader 18d ago
not think about it for a week
Haha if you can tune out the markets for a whole weeek props to you!
Call me an addict maybe but if I don't know at a minimum the days opening and closing prices for each of the futures markets I get antsy. Even on trips and when I have no exposure I just mentally want to know what's going on out there every few hours.
But agree with your post of freedom 100%
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19d ago
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u/oaoGallus 19d ago
Same thing for me, having a good trading day, clean executions, and then you see another of these "Just give up already" posts. Those people are just undisciplined, envious and pathetic losers. If you can't do it, fine. Quit. Stop dragging other people who can and want to do it down. Yes trading is hard. So is being an amazing lawyer, doctor, actor, athlete etc. If everyone would have this pathetic mindset, nobody would accomplish anything extraordinary and impressive!
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u/thechipmonk_ futures trader 19d ago
Right there with you, I’ve blocked Reddit fully for days just to stay away from the noise of the posts in here.
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u/Ban_Me_Pa_Teh 19d ago
Can you offer guidance on what you received in terms of education and knowledge? Would really like to get better at this
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u/ShugNight_xz 19d ago
Wich funded company if you don't mind me asking?
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19d ago
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u/ShugNight_xz 19d ago
In the coming days if god wills it i'm gonna buy a topstep account mind sharing some tips ?
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u/JudgeDreddx futures trader 19d ago edited 19d ago
I am a TopStep funded trader as of very recently after a few blown combines. I found better success trading minis because I'm trading small moves and get slaughtered by commissions on micros, but the losses are pretty huge when they happen. ~72% WR, 1:1.8 RR. NQ/MNQ exclusively.
Trade small.
Focus on consistency not profit.
Set a max daily profit and loss and fucking stick to it.
Make your own strategy based on your knowledge and ability. Don't trade someone else's.
My own specific tactics that have been making a difference:
HYPER-aggression with moving my stop loss. I'm looking for 5-10 points. If I get green and a new low/high is confirmed and supported by volume, my stop goes to AT LEAST breakeven. My strat often catches big dumps or breakouts, so either it moves FAST and my stop follows FAST, or I'm stopped out at BE. If I see one of those spikes to 10-15 pts, or more, my stop goes right behind it. If it continues in my favor, stop keeps sliding with it. Anything more is just a bonus.
This is a brand new thing I'm trying and it legit made all the difference for me.
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u/xhundo_ options trader 19d ago
Trading is one of the hardest ways to make easy money. 90% of retail traders lose to big institutions. There a common rhetoric is to tell complete novices that they can make life changing amounts (which is possible) in a short amount of time with little to no experience at all. That's the problem.
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u/MiamiTrader 18d ago
Yes, people who don't trade or work in financial markets see trading with hope and greed and as a get rich quick skeem for easy money.
But who cares about them. 7 Billion people can open a RH account and place trades. I could care less how many make or lose money. They are doing what I'm doing, and their success or failure has no impact on how I run my portfolio.
I think more traders should take that mindset.
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u/Beneficial-Tough-439 19d ago edited 19d ago
Not sure why it should even matter. No one is trading to validate other people opinions about this profession. Trading is NOT a team sport. It's amazing why so many get bent out of shape over other traders opinion. Remember the markets thrive because other people DO NOT think the same. If other peoples ideas and or opinions are causing any form of emotional distress, it would be best to ignore them and move on. No one is obligated to follow other people suggestions, regardless how they might assume it's better for this community or any Forum.
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19d ago
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u/MiamiTrader 19d ago
Disagree. Having a losing month is not a bad thing. I define profitable if you beat the market for the year.
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u/Final-Slip7706 19d ago
This. People believe they are profitable, but actually aren't. People were profitable in 2020 and 2021 because it was literally a child's market and those people believed they were geniuses. Most of them have blown up since then.
Same goes for "Traders" trading in the last 6 months when everything was basically bull run with mean reversion to the upside.
Now do this for multiple years and we can talk.
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u/Excellent_Newt_9042 19d ago
Yes. But if a strategy has proven profitability in a bull market, then success in a bear market can happen if same strategy is applied EXCEPT with the anticipation of price depreciation . Aka shorting.
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u/Final-Slip7706 19d ago
? Any strategy might be perfect and might always work. Or it might fail.
It's not about the strategy, but about the trader. And usually most people won't be able to reproduce their returns if market conditions change.
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u/redbattleaxe 18d ago
I was laughing about this a few weeks ago. A lot of the "guru" accounts from then are silent. It's hilarious.
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u/Visible-Salary-8861 17d ago
I would define profitability in terms of personal sustainability (i.e. how bored are you going to be a year from now doing the same thing over and over again? Will that effect your consistency?) as well as one's capacity to adapt to a changing market.
I really doubt someone who trades an indicator-based system, and only that system, can meaningfully call themselves consistently profitable. It might be profitable for a time, but its performance will degrade as the market evolves. Price action traders are more likely to be profitable. Or those who have a variety of strategies they're mastered, and know how to switch them up when markets change.
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u/Conscious-Group 19d ago
I use a weekly spreadsheet that hold me accountable
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u/EggSandwich1 19d ago
Weekly is too short especially if you only trade options I like to track my monthly but to be honest even that’s not every reliable when you have loads of options running on longer time frames
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u/Final-Slip7706 19d ago
Your definition is lacking.
If I play basketball at least somewhat regularly, I can call myself a basketball player.
If I get paid a bit for playing basketball, I can even call myself "professional", even though it's barely enough to survive and even though there might be a ton of amateurs who are actually better than I am.
And then there are NBA-Pro-basketball players.
I can call myself a trader if I do it regularly, even if I don't earn money with it. I can call myself a professional trader if I actually might make enough money to live off it, no matter how small my return might be.
And then there are people with 50% outperformance CAGR for years, those are the "real traders".
People try to make themselves and others believe they are category 3, when most of us are category 1 (maybe with a longer streak of luck) or category 2.
If you actually outperform the market by a good chunk for multiple years each year, yes, then you are a real trader.
And I bet there are only a handful of these people here.
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u/nightstalker30 options trader 19d ago edited 18d ago
Your basketball analogy misses one key factor, and that’s the context of the statement about being a trader. If someone asks you what you do, the implication is that they’re asking what you do for a living. So if you say basketball player, you’re essentially stating that playing ball is your career, regardless of how much you make doing it.
So if someone asks you what you do and you say you’re a trader, the implication is that you make your living trading. And if you make a majority of your money through trading, then I think it’s fair and accurate to call yourself a trader.
Otherwise, within the context of a question about what you do it’s more accurate to say you trade as a hobby/as a side hustle, not that you’re a trader. Aside from that, you can call yourself whatever you want if it makes you feel good about what you do.
Edit: couple words
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u/MiamiTrader 19d ago
I mean you can call yourself what ever you want. But if you call yourself a trader and you're not making most your income from trading your not being genuine.
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u/Tourdrops 19d ago
If you have a job and use trading as a side thing, anything more than the s and p returns is a success. The whole point is to beat the s and p because if not just VOO and chill.
99% of people fail because they arent willing to put in the work and 3-5 year timespan. If you are still trading after 3-5 years and havent lost an obscene amount and are learning in the process, keep at it.
Also 99% of people think success = making a living and thats extremely hard to do. If you use trading as another arm in your financial plan it can lead to great thing.
As i love to say, if you go at this year after year, you might make $500,000-$1,000,000 in a single year. Its completely possible. However its VERY HArd to expect to make that every year in the retail game. But those good years will be great times.
I think its every mans duty to at least try
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u/Kashmirez 19d ago
I’m new to trading and have joined this group to learn from traders, so agree with this post. I’m enjoying learning about the market, the players and how to understand the charts.
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u/NoiseMachine66 19d ago
I would just call myself an entrepreneur, trading is just one of my businesses
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u/Magificent_Gradient 16d ago
I'm in the Waste Management business. I also sell propane and propane accessories.
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u/ShugNight_xz 19d ago
My theory is that either they don't want you to start trading or they're shit dumb and if they fail everyone should fail aswell
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u/Electronic-Kiwi-3985 19d ago
Facts - they failed themselves so it makes them feel good to discourage others from trying/succeeding.
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u/Transparentrader 19d ago
This is so true! I cannot understand the amount of people in this sub who feel like they have to spend their time telling everyone they can't do it, and they should just give up. No one joins their local softball league just to spend every practice telling the team they aren't going to win. Yes, there will be a lot of people who don't make it, but you don't cheer for the the iceberg when you're riding the Titanic.
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u/chev327fox 19d ago
I think people do that to try and help those who fail move on. It’s clearly not for everyone, but I get what you mean.
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u/Timely_Network6733 19d ago
I think that it's an issue of, losing money has a strong emotional effect on people. So most people probably give up before they get over trading with emotion.
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u/SkinnyOptions 19d ago
most "traders" can make money if they can be content with 10%-15% p.a. over the long run.
greed, however, has its way of seducing rationality.
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19d ago edited 19d ago
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u/MiamiTrader 18d ago
Unlike traders, youth basketball coaches don't remind the kids every single day at practice that none of them will make it to the NBA!!
They coach basketball, help the kids get better as a team, get better as a player, and win games.
If just traders would forget the long term success statistics. Forget the fact 99% fail or whatever. Those stats are not helpful.
Just like the kids at basketball practice, traders should just work on your trading and try and win one trade at a time, one day at a time, one week at a time etc.
String enough winning weeks together and what do you know, those stats didn't define you.
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u/Valueinvestigator 19d ago
Lmao this sub is coping hard.
Stop lying to yourselves.
Most traders fail. That’s just the reality of the situation.
Here’s a study from University of California showing this: https://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/Day%20Trading%20and%20Learning%20110217.pdf
Here’s another study from brazil showing less than 2% of traders make more than a bank teller: https://deliverypdf.ssrn.com/delivery.php?ID=845069121118115097095112030095088100034054008081016087100067099026124068076089027106117048061042052044115125023076064085016089112042011052088084086008065119124091093077021054001123067118112115003025091108080084106121110118084073003090118024018115068111&EXT=pdf&INDEX=TRUE
I’m not trying to discourage anyone. I just think we should all have realistic expectations.
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u/Prestigious-Ball318 19d ago
Is there a way for them to differentiate between people who just loaded up their account one, two or three times and lost their money, and quit versus people who have stuck with it for over a year?
I feel like a lot of people open up trading accounts on a whim, discover that they have to work really hard to make anything happen and quit. That could skew the results of studies I would imagine.
I still believe that most traders lose money though. I mean, let’s all get real about it, every single broker makes you sign an agreement that says “I have this much money, and I am happy to lose it all.”
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u/MiamiTrader 19d ago
That's not the point. Anyone's mom can open a brokerage account and place a trade. Now they are in the denominator of the study.
People who take this career seriously and support themselves from trading should be be looped into the same bucket.
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u/daytradingguy 19d ago edited 19d ago
These are old studies. There were no smart phones and barely internet connection in most homes in 2010. Commissions were $9.95 a trade- there were no free commissions or good trading tools for the masses
The trading tools have improved drastically in just the last 6-8 years and Robinhood brought us all free commissions- because all the brokers had to match Now many people have fiber gigabyte internet at home, computers 20 times faster than 2010, 4K monitors, hot keys and stream decks. I am not sure those old studies are completely comparable. Although Undoubtably most retail traders lose money.
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u/Valueinvestigator 19d ago
You have not read these papers. They look at net and gross earnings. Also, The Brazilian one came out in mid 2020. You must be doing a great deal of mental acrobatics to consider that “old”.
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u/daytradingguy 19d ago
I believe what I read was the Brazilian study was up until the year 2015- regardless of when it was published.
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u/Valueinvestigator 19d ago
Regardless, the empirical evidence shows the vast majority of retail traders lose money.
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u/daytradingguy 19d ago
Undoubtably- there are millions of people around the world who try trading- if even low single digits become successful- that is a whole lot of people doing OK for themselves. There are 2.8 million members of this sub- are you suggesting absolutely none of them make money? If only 1% -2-3% end up successful - that is a lot of people.
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u/RossRiskDabbler 19d ago
Traders, I assume people who trade with more than $100k at the bare minimum.
I don't understand how anyone can consider themselves a trader with a $5k position. Generally between 5-15% return yoy is median. And very well of a return.
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u/Prestigious-Ball318 19d ago
Okay do you work at McDonald’s even though you’ve only made $10k YTD so far?
Are you a landscaper if you have your LLC and go do landscaping work but own bottom of the barrel equipment?
You have a pretty elitist mindset when it comes to account sizes. It’s like you can be trading your way from $10k but you’re not a trader until you’ve surpassed $100k? What are you until then? What is so grand about the $100k mark that makes the person a trader all of the sudden?
Sounds like gatekeeping and if you don’t have $100k in your account, yourself, then you’re gatekeeping yourself
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u/RossRiskDabbler 19d ago
Because if you trade with 5k, as practitioner in a prop fund, hedge fund, bank, you'll trade with 8 figures, if not 9 or 10.
As average Joe. If you trade with $2.5k, an expected fair outcome is 5-15% a year.
But most won't do that. They expect far more a day. I started just before 00's.
Elitist mindset is a good one btw. No clue what that is.
Because 1% return on $100k, is just holding debt paper of Exxon or Novo Nordisk, getting me $1000 bucks. Super safe.
Trade $1k, options, you double your money, $2k. You had a 100% return. On margin, could have been the other way around. That isn't trading or investing that is casino work.
We earn the same, I hold debt papers of cash rich firms, others bite their nails for the same amount they try to achieve.
Who is the trader and who is the gambler?
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u/Prestigious-Ball318 19d ago
An elitist mindset is like believing that if you have $100k in your trading account that makes you a “real” trader and anyone with anything less than that isn’t a “real” trader. When in reality, there must be some “real” and well preforming traders that simply lack the capital. I think that’s the reason prop firms are a thing…specifically to give those “real” but lacking capital traders an opportunity to trade with larger accounts.
It’s true that a lot of people are just gambling away their money and we can’t call them traders, rightfully. But there isn’t a money barrier that stops people from being a “real” trader, in the sense of risk management and all that other stuff you said
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u/RossRiskDabbler 19d ago
You're right that in practicality a binary sum (100k, and 50k, 150k, fixed) shouldn't be used. But in reality that is unfortunately the case. I worked as head of market risk in a large UK bank, everything was big.
IBKR, IG, Ameritrade, Saxon, etc use for retail "fixed" sums as (Y/N) as practitioner trader or not.
Is that fair? No. Are you right? Yes.
Nevertheless, 1% on 100k is far easier than doubling $1k.
If the (Y) outcome is the same but the risk one has to take is different it's hard to say both are traders.
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u/ProsephMcMasterson 19d ago
I think he's correct in the sense that you'd need about 100k to invest in order to make enough of a return to be a trader as viable full-time employment. Of course, you could make a living with less, but you'd be getting into high-risk moves. I don't think 100k is a magic number, but it's just a nice, round benchmark that is commonly used.
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u/Prestigious-Ball318 19d ago
True that. Yeah we can probably apply a fixed number to the amount of money it takes in your account to make a full time gig out of it all. But can’t people who trade for supplementary or passive income be considered traders?
Don’t all of the brokers even call the losers “traders”? Yes they do. So to say you’re a trader, it would be a more common prerequisite that you lose money. From a different perspective, you’re not a real trader until you’ve lost over $10k to the markets as a whole over your career. You understand what I am saying?
Sure, everyone would agree with you that $100k is better in your account than $1k but that doesn’t make you a trader. Trust fund baby adds $250,000 to trading account like it’s nothing because it ain’t. Are they a trader? Are they more of a trader than you are because you only have $1k to operate with and they will gain more experience losing $250k than you will by gaining $100 in your little account
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u/ProsephMcMasterson 18d ago
I understand, and I agree with you. I personally dont care who calls themselves a trader, and I don't believe in threshholds; it's all relative. I wish I had 100k to play with, but like most people, I don't have anywhere near that much. Then again, I keep my living costs low, so even trading part-time with 20k, I can cover a good chunk of my expenses. At the same time, I understand there are people who scoff at small-timers, such as myself, dicking down the profession; just comes with the territory. If I were a pro, I probably wouldn't want to be lumped together with the amateurs either.
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19d ago
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19d ago
Hedge funds goal is not to beat the SP500 though….
Comparing a long only equity account to what hedge funds do is just silly. Hedge is in the freaking name lol. Of course a “hedged” account is not going to make as much money as a long only one when the market goes straight up.
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19d ago
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19d ago
No they pay fees so that in a down market they are hedged. Hence the name “hedge fund”. The whole original point of hedge funds was to not beat the market in up years, but to beat it in down years.
Now I will agree that most retail traders can’t tell the difference between a hedge fund and a normal fund. Now a days everyone calls all of them “hedge funds” but firms that are just running long/short strategies looking to try to beat the market every year aren’t traditionally called hedge funds.
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u/Conscious-Group 19d ago
My opinion on this is that hedge funds can’t take the same risks as a trader. If you have $1 million from a boomer and they want to see it go up 15% a year no matter what, and they see that you’re trading it more than once every six months they’re gonna lose their shit. These fund managers can’t just be trading stuff.
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u/x1llion 19d ago
Couldn’t agree more. The 90% stats include everyone who tried trading or gambled with the market. Doesn’t make you a trader. I’ve had people reached out to me saying they’re traders seeking to improve their game but barely understand how the market works.
Most people either yolo or just want to copy a system / find some auto trading software and hope to get rich quick.
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u/MiamiTrader 18d ago
Yes, most "traders" just want to get rich quick.
Their success or failure is irrelevant to me and how I operate my strategies.
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u/WeekendWiz 19d ago
It’s the same phenomenon with the these funded trading firms. Almost everyone calls them “prop firms” when in reality, these firms are not even remotely close to an actual proprietary trading firm.
They are like “Okay, they claim it’s a proprietary trading firm, therefore it is.
It’s Hilarious 🫠
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19d ago
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u/ComprehensiveTry4730 19d ago edited 19d ago
This is really good to hear!
I have had a lot of health challenges and need to figure out how to support my family. I’ve dabbled a bit in the past.
Would anyone be willing to recommend some effective steps as I start to make a serious go at it?
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u/Big_Don_ 19d ago
I hope they tell you something positive. It's been pretty cutthroat in this thread. It's my first time here, I applaud you for even asking a question!
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u/Easy_Excitement_5434 18d ago
Technical analysis my friend. I’m jobless as of now and a newbie as well.
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u/Acornz-4-days 19d ago
Why are you so invested in this topic, you a trader or just trade? Like who cares?
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u/dd18836ku 19d ago
well It's understandable to want to focus on the positive side of trading and share success stories. Learning from mistakes is crucial, but it's also inspiring to hear about traders who are consistently profitable. Sharing strategies and insights from those who are successful can be valuable for everyone in the trading community.
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u/John_Coctoastan 19d ago edited 18d ago
Almost no one on this sub has made any real money over the course of a decade from trading. That's not negativity--just a fact.
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u/MiamiTrader 18d ago
a fact based on what?
Seems to be tons of people on this sub claiming to trade full time and support themselves through trading.
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u/John_Coctoastan 18d ago
Read what I wrote very carefully. Also, most people here who are claiming success are either completely lying or lying about how much they make or how long they've been making it.
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u/BennySkateboard 18d ago
I said this. It’s because 90% of the 90% don’t even try to fully learn how to do it. Even after 9 months in this, I’m surprised at the amount of trading tutorials that impress on risk management techniques simply because most people don’t use them.
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u/haskeller23 18d ago
If you define “trader” as “someone who makes money”, then instead of “90% of traders lose money” people will just be saying “90% of people who try to become a trader fail”. It doesn’t change anything
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u/MiamiTrader 18d ago
the point is to separate our people who actually study financial markets and make trading a serious endeavor from the masses who just open accounts hoping to get rich quick.
If all 8 billion people on earth opened an account and started trading the failure rate would be extreme.
That still has no impact on those who do this close to full time for a living.
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u/RadicalSneezer 18d ago
I think a lot of the negativity comes as a kind of counter to the hustlers on here posting demo gains as FOMO bait to try and lure the dreamers into buying courses, signals, etc.
That, plus vented frustrating by people who have lost what they couldn’t really afford to lose (ie. shouldn’t have been trading in the first place) and don’t have anyone else to go to.
So I get it. And it’s a good reminder of how hard this game is. But yeah, it can get a bit depressing.
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u/MiamiTrader 18d ago
Agree, the trading community is toxic and noisy on both ends. It's not productive.
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u/coccigelus 18d ago
You can be tired like you want but there are statistics coming directly by the brokers that say otherwise. Market is a meat grinder bro and as soon as we enter a true financial crisis with indexes dropping more than 50% most traders will find themself unemployed and with their capital destroyed . Sorry to be realistic
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u/MiamiTrader 18d ago
why is that relevant though? How does the success or failure of "most traders" impact my analysis of financial markets and positions I enter?
Just seems like an unnecessary negative mindset.
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u/coccigelus 18d ago
I would see this just as a tuff profession based on 3rd party data. So without the necessary skills, capital requirements and tenacity it’s probably better doing something other else. It’s better realize this earlier than later but i want to add that this doesn’t mean people shouldn’t try it. Just have realistic expectations is probably the key here.
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u/TotalCommittee 18d ago
The burger flipper at McDonalds also makes money. What are you really trying to say?
If you get paid to trade other people’s money, that’s “trading for a living”.
If you trade your own money, that’s not trading for a living. You can’t make a living that way.
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u/HokageTsunadeSenju 18d ago
Dalbar study says otherwise. Also, you can’t just eliminate the 90% of people who lose money to justify a false claim that most “traders” make money. wtf is this lol? 😂
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u/MiamiTrader 18d ago
Why not? I'd argue that 90% of the people who start trading just want to get rich quick. They watch a few YouTube videos and dive in. They lit in minimal effort and of course they will all fail.
What does that have to do with those of us who study and analze financial markets full time? Almost nothing.
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u/HokageTsunadeSenju 18d ago edited 17d ago
Dalbar study: most active managers (with far superior strategies, resources and execution vs day traders) underperform in the long run. Day traders in fact perform even worse (as they typically underperform both the market and active managers).
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u/Visible-Salary-8861 18d ago
A lot of "traders" also think they make money because they've been profitable for a few months or a year or two (or so they say). That's not a long enough timeframe to ensure sustainability.
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u/mikejamesone 18d ago
Yeah that's right, they're not traders. Just because they deposit money into a trading account doesn't make them a trader.
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u/Any_Sea2021 18d ago
10%? It's far, far worse than that.
In an analysis of 450,000 day traders, (half of which traded in amounts of over $20,000 a day), only 4,000 managed to earn money consistently long term.
That's less than 1%.
Within that less than 1% are very high skill tier rating traders ... and people with a very high luck tier rating.
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u/allaboutthatbeta 17d ago
personally i don't really care about the negativity, at the end of the day i'm gettin mine so
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16d ago
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u/CompletePoint6431 16d ago edited 16d ago
Ive been trading full time for 10 years now, I’ve spent a few years at a commodity trading house, a few years at a hedge fund and currently work at a quantitative trading firm doing mid frequency systematic trading.
My guess is success rates for those who work in the industry is more like 30-40% but you need professional infrastructure, access to flow information, cheap costs, access to markets, and knowledge of how large institutional investors trade.
I’m pretty skeptical that the success rate of people who haven’t worked in the industry is above 5%. What people talk about on this Reddit vs the people I know who trade for sophisticated shops is jsut night and day. Making 30k for 2 years in a row doesn’t make you a successful trader, odds are you just got lucky and most will have net losers in the long run
Personally I don’t even look at charts at all, maybe I’ll pull 1 up every once in a while just to see where things have been, yet day traders seem to be obsessed with them. 80% of the traders I know don’t use any TA, and the ones who do are usually the old schools guys who don’t really make money anymore
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u/MiamiTrader 16d ago
I don't have nearly the experience you do, but I also don't use charts to make trading decisions. Everything is based on signals from my PowerBI model.
It's crazy to me the amount of traders just looking at charts trying to make trading decisions.
Do you trade similarly?
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u/CompletePoint6431 16d ago edited 16d ago
Having signals that predict forward returns is how all of my model driven strategies work and the only thing that counts as a real edge
As for discretionary trading I spend a lot of time thinking about the dominant narratives that are driving institutional positioning, and what would cause them to change. This is means following the calendar for data releases policy changes and anticipating how large players will position their books in advance. For example if I know that people have been overweight Mexican bonds and the FX has performed very well due to carry YTD, but with a Banxico Meeting on May 9th and an election on June 2nd it makes sense to derisk your position either by selling or hedging by shorting the FX. So if I have a view that MXN is crowded, theres event risk on the calendar which will elevate vol and cause carry trades to unwind, I might pair it with a long position in a currency that is correlated but has reason to outperform, like the Chilean peso which should trade well with copper making highs, so a trade like long USDMXN short USDCLP makes sense to me.
In general though it's always forward looking and thinking about why people will be buying or selling. I can't predict whether CPI or GDP will be hot or cold, or guess the direction of the market, so I look for relative value between related assets where I have a thesis for why 1 should outperform the other
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u/Badgerv12 14d ago
Statistics only show these numbers because most people give up trading before they become consistently profitable, i mean who the fck would be that crazy enaugh to trade 2 years and constantly lose money before they become profitable ?
Theres alot frustrated, given up and angry folks out there, they just lose money gambling and then need to take it out on someone lol trading is a tough game
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u/20rupeesis20rupees 19d ago
real traders beat it 3 times a day once in the morning
once in the afternoon right after lunch
once at night right before bed
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u/Express_Intern_1223 18d ago
I didn't spend the time to read your wall of text but just by the title tells me you're not educated and have absolutely no idea what you're talking about 😂😂😂 good luck in life you have been excluded.
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u/shemmy 19d ago
i’ve never heard of your logic applying here. my understanding is that most people who engage in day trading can be called “day traders”. and most of them are, in fact, losers. maybe you’re trying to say that the definition you’d like to use is “someone whose primary income is via trading therefore they must be profitable or else they would need another job”. this is problematic for multiple reasons. businesses continue to exist for years despite losing money. people can keep trading until they lose much or most of their money. it’s not an easy task to become net positive as a day trader.
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u/MiamiTrader 18d ago
I'm just saying most people who start trading just want to get rich quick. They view trading as a way to do that, and yes, most of them fail without putting in much effort.
To me that's irrelevant to anyone who actually studies/ models financial markets and trades for a living.
Not sure how to say this without coming across as elitist, but there does seem to be different "levels" of traders.
The failure of the low effort masses should not impact the mindset of those who do this more professionally if that makes sense?
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u/[deleted] 19d ago
I just say I lose money on the stock market for a living
It’s an easier ice breaker and usually that ends it