There will always be a time to learn a lesson from trading decision and thats why I always advised traders to also have knowledge in selecting the perfect coins not just a hype base crypto that will be worthless in the future.
If the invested coin is good the next thing is to be patient.
But how would you know when you are reasonably patient, and when you are just falsely keeping the loosing position would you would better off sell quickly and invest elsewhere?
That's was the first impression i also had when i joined cryptocurrency and i have made a lot of bad investment decision but learn from it.
That's why the first statistic is that "100% of people start trading with the hope of getting rich"
The whales are the 1% trader we are talking about, they don't just trade like the normal traders, but trade when they wants to take profit in the market. We'll know that to be a trader need or require some sort of skills but not in all cases, sometimes traders are most lucky than another but adding the skill bring more advantage. In conclusion "knowing when to exit the market make a trader topnotch" and not necessarily their skills per-se.
Isn't knowledge when to exit the market is the part of skill / knowledge? While in regard to whales, in the earlier comments here I provided a link to Japanese trader who started same with us but soon ended up trading millions of dollars portfolio - thus from "non-whale" to "top-whale" and that was for stocks... there the "whale" categorization is more strict as opposed to crypto where anyone with $200-500k can be considered as "baby whale".
After checking the links I believe they didn't mention anything what wasn't mentioned by the community members in the current thread - psychology, exit points, systems, strategy, patience, etc. Please correct me if I missed something?
I think this statistic is referring to retail traders and not professionals aka institutional trading.
The secret is discipline and risk management coupled with a reliable strategy that YOU can follow consistently. The emphasis is on the first two components: the ability to stick to your strategy and do not be distracted by the gains nor by the losses while keeping a solid risk management system in place will make you successful at trading.
Remember that emotions are very hard to control and much harder to master.
Nope, it refers to traders overall - both institutional and retail. In fact institutional traders also don't earn that crazy lot of mony as commonly believed. Very few of them do in fact - that's survival bias - you know only the success cases. And the psychology element is easily eliminated with algo-trading (I don't mean those "make money easily FOREX/crypto-bots", but professional hedge fund algorythms).
For me, those 1% are the traders or investors who fully invested in their knowledge where they fully understand the game, they also know that trading is not just quick rich wherein they have a view of a long term success. Many traders are failing because they want their money to double in just days without focusing in risk management that causing them to lose a lot of money. If you want to stay in the game then focus on your risk management like knowing how to use stop loss, knowing the perfect time of entry and exit.
Mastery is also important wherein you should focus on mastering reading prices, trends also the indicators that you are currently using, there are a lot of traders out there who keep losing because they also do not have any trading system and for me it is a matter.
But knowledge can be learned, and "sticking to your trading strategy" element can be automated. In these days, it doesn't take too much knowledge to develop algo-trading bot based on the parameters you want to use - there are solutions even for people with 0 programming experience.
To ease this mental and physical stress enabled a lot of traders to transform their strategies to bot in cryptos trading and Expert Advisor EA in forex, spot and indices trading, to automate their trading so as to reduce the stressful nature of trading a lot of them are making profits consistently I believed there are many of this set of traders that isn't capture by the statistics I believed the overall profitable traders should be more 1% IMHO.
You mentioned great point, but the conclusion is not the same with what I would make
Those people who transform their trading knowledge into Advisor EA, bots, courses, signals, groups, etc. - they don't earn from trading though... they earn from those fees people pay them to access these things. That's a common thing actually called "if you cannot earn money with making own business, teach others how to make business" - same with trading, investing, etc. But very few people understand that and thats why keep paying for those people, who call themselves traders and do earn money, but actually their profit source is from what they sell, not from what they trade.
I would love to see these researches honestly. I do not believe that only 1.6% of traders make a profit, I think there must be a lot more people who make a profit from trading. After sharing something like this, it is obviously important to provide the stats data and where you found this information.
If you could provide the information from the research that shows that only 1.6% traders make a profit, I would have to say the reason is probably only 1.6% of traders keep trading with any emotions after a long period, many people trade because they want to get rich, and they see wall street type of people getting very rich and they want to do the same but they forget that those people deal in billions and they make very low sums of profit but do it for decades instead of few months.
Why people keep asking me for research papers and sources after I provided them several times before in the same thread?
But okay, here it is again for everyone's reference:
The North American Securities Administration Association (1999): Report of the Day Trading Group
Barber, Lee, Odean (2010): Do Day Traders Rationally Learn About Their Ability?
Odean (1998): Volume, volatility, price, and profit when all traders are above average
Barber, & Odean (2000): Trading is hazardous to your wealth: The common stock investment performance of individual investors
Kumar: Who Gambles In The Stock Market?
Barber, Odean (2001): Boys will be boys: Gender, overconfidence, and common stock investment
Calvet, L. E., Campbell, J., & Sodini P. (2009). Fight or flight? Portfolio rebalancing by individual investors.
Barber, B. M., Lee, Y., Liu, Y., & Odean, T. (2009). Just how much do individual investors lose by trading?
Gao, X., & Lin, T. (2011). Do individual investors trade stocks as gambling? Evidence from repeated natural experiments
And I believe you made a great point which nobody made before about "they see wall street type of people getting very rich and they want to do the same but they forget that those people deal in billions and they make very low sums of profit but do it for decades instead of few months". That's very very true!
Those numbers are probably based on short-term traders stats and not mid/long-term traders/investors.
Because I know a good number of people that usually look for a project with a decent or above fundamental and instead of trying to trade it they will just buy and hold it for a while and it's more like an investment to them and most of the time it works for them too in the long-term and almost all of them are in positive profit.
That's the issue with short-term trades, you just usually buy whatever suggested or shilled somewhere without having any information on them without even doing any kind of TA on it, and after a while if they go down you just get impatient and sell in a loss and you do the same thing with the next one until you just get lucky and buy something that will go up after you bought it thinking you're getting good at it or you're improving, not knowing at that point it's just pure luck and it's not good sustainable strategy in the long run and it will fail you miserably down the road.
Well that's why trading and investment are different by definition
But nope, the research papers which I quoted above do analyze long-term traders as well. But again - traders, not investors. There's a joke actually "
every failed trade becomes long term investment"
Those 1% could be some big investors that throw hundred of thousand dollars into trading. For them, just 5% rise is a good profit and they have been able to consistently trade with this huge money with confidence of making profit particularly on less volatile coin such as bitcoin compare to altcoin. I still do not believe anybody will enter into trading crypto without mindset of making profit. So honestly think 100% of people that trade have intention of making profit. If you wanna trade for fun or for the love of trading chart, Demo account is there for trading
. Unfortunately a lot of people that quilt early are traders that enter with little capital and set so much bogus expectations for themselves so when they try for some weeks and failed, they abandon the project "get rich quickly"
Oh, you forget the biggest part of traders - people who need to hedge their risks. That's especially the majority in derivatives and in capital markets (not in crypto yet, I believe). They don't trade for profit, but just to get rid of risks and to lock in desired prices / interest rates / etc. they want to lock in, and they don't intend to make any profit (but they do occasionally sometimes). But yes, these statistics not about them at all, since it's completely different category of entities engaging in those.
In reality, trading depends on your persistence. The statistics above suggests that the longer you stay in the game, the higher the chances that you will become a successful trader.
Otherwise, you will fall out of the race. In fact, this can be attributed to any human activity associated with mental and physical labor.
A successful trader - as lenient as it sounds but it carries a lot of warfare to get to this spotlight. Everyone expects to trade even if they can, but can't operate. One has to have a lot of patience, prudence, and adaptability to trade.1% of traders are those who overwhelm all obstructions, survive and prolong trading.
Actually if you check the research papers you will see that too many people believe in this and continue to trade while remaining in negative profitability. Because they think that one day their efforts will pay off. But for some people they never do, and we don't know who will be that unlucky person.
I am pretty sure that none of the member here in the forum doesn't know who is this 1% traders who got earned a lot with trading.
However, how did you know that it was 80% of the traders gave up their trading activity here anyway? what is your basis anyway for this matter?
Then, you calculated already that 5 years from now only 7% will remain in trading? Just asking dude.
I didn't calculate any single number I mentioned here
I took them all from research papers which you can see above - those people who conducted their research explain in great details who, how, and when they calculated those stats. And I assumed since it's trading discussion section, here should be a lot of traders, both successful and unsuccessful, and someone could share their useful experiences. Was I wrong?
