99% of day traders consistently lose money (educational)
In this screencast I present results of a scientific study carried out on day trading, in the Taiwan Stock exchange. I explore some volatile instruments that some day traders may get stung by.
The results of the Taiwan study are shocking. Disbelief leads people to argue that 'that's in Taiwan - so what?'. However the results are informative of cognitive and behavioural characteristics of day traders, more widely.
Even if the results are 50% applicable outside of Taiwan, they are seriously worrying.
For those interested in reading the study, Google: "Do Day Traders Rationally Learn about Their Ability".
So, what does it all mean? For me it means:
1. That the knowledge, skill and experience required to be consistently profitable are extreme.
2. Day traders are most at risk of burning their accounts and departing never to return.
3. Even seasoned traders are at huge risks of losing money.
4. It isn't about methodology - it is about 'individual trader psychology'
New traders need to be very cautious in following experts. A fair few of seasoned traders have set up training programmes, from which I suspect they make more money training, than in trading. Hard evidence on that is of course not easy to come by. But it's not me just saying so - a handful of true experts out there have said similar.
[For the avoidance of doubt, I have committed never to sell anything to new or seasoned traders. What you see is what you get. I do not need anybody's money.]
The results of the Taiwan study are shocking. Disbelief leads people to argue that 'that's in Taiwan - so what?'. However the results are informative of cognitive and behavioural characteristics of day traders, more widely.
Even if the results are 50% applicable outside of Taiwan, they are seriously worrying.
For those interested in reading the study, Google: "Do Day Traders Rationally Learn about Their Ability".
So, what does it all mean? For me it means:
1. That the knowledge, skill and experience required to be consistently profitable are extreme.
2. Day traders are most at risk of burning their accounts and departing never to return.
3. Even seasoned traders are at huge risks of losing money.
4. It isn't about methodology - it is about 'individual trader psychology'
New traders need to be very cautious in following experts. A fair few of seasoned traders have set up training programmes, from which I suspect they make more money training, than in trading. Hard evidence on that is of course not easy to come by. But it's not me just saying so - a handful of true experts out there have said similar.
[For the avoidance of doubt, I have committed never to sell anything to new or seasoned traders. What you see is what you get. I do not need anybody's money.]
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