Some Thoughts On Winning Trades

We're at the end of a very terrible week with the infection rate over 120,000 and the death toll over 2,000 so I thought I'd provide a diversion this weekend and instead provide some positive talk about trading.  In view of this I provide the graphic below which I found this week on TradeWiki.  At first, the numbers appear grim.  80% of all traders quit after two years, half of those after only one month, 93% after five years.  Only 1.8% of all traders are profitable.  But reading between the lines, I see a very positive message.  If 98% of traders lose money, if 88% of all trades are losers, that means that the AVERAGES are heavily skewed toward the losers. 



But given these skewed averages, still 60% of all transactions are winners.  That means that if you look at only the 1.8% subgroup of winning traders, then the batting average of the winners is more than 60%, very likely a great deal more.  That means the only difference between the winners and the losers is education and experience.  Surely it's been well established that the overwhelming reason for losing trades is a lack of proper training, discipline and experience.  It certainly speaks volumes  and provides tons of incentive to be part of the 1.8% that has the discipline and commitment to acquire the proper training and experience.  If that's what it takes for a win ratio in excess of 60%, probably considerably in excess, I'd say it's well worth it.  Something positive to mull over in these very difficult times.  The stormy weather this weekend is giving us all a good excuse to keep staying inside.  Stay safe, stay well.