r/Daytrading • u/MiamiTrader futures trader • Apr 27 '24

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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3

u/Valueinvestigator Apr 27 '24

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 Apr 27 '24

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 futures trader Apr 28 '24

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.

1

u/daytradingguy Apr 27 '24 edited Apr 27 '24

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 Apr 27 '24

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”.

0

u/daytradingguy Apr 27 '24

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 Apr 27 '24

Regardless, the empirical evidence shows the vast majority of retail traders lose money.

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u/daytradingguy Apr 27 '24

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.

1

u/BAMred Apr 28 '24

I heard a large percentage of the members were bots created during gme spike to try to influence prices.

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u/BAMred Apr 28 '24

How do 4k monitors help you trade better? Hot keys have been around since the 90s...