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Why 95% of traders lose money
Why 95% of traders lose money
At least that’s a stat you often find on the internet ( 95 % of traders fail). But this number is not scientifically proven. Research shows that the share of losses is higher. Here are 21 facts in the world of trading that scientists have discovered by analyzing brokers data and trading results.
Some of these facts explain why most traders lose money:
- 80% of day traders stop trading within the first two years.
- Of those, nearly 40% traded daily in just a month. In three years, only 13% of the trade will follow. After 5 years it remains in the market only 7%.
- Day traders sell winning shares at prices 50% higher than losers. The share of selling the winning shares constitutes 60% of the sales, and the loser is only 40%.
- The private investor’s profit lags the market index around 1.5% per year. Active traders lag behind the index at 6.5% annually.
- Investors who have achieved good results in the past are looking for profit in the future. At the same time, only 1% of traders are able to realize the expected profit after deducting the fees.
- Traders with a 10-year loss history continue to trade. In doing so, they continue to operate in the market even after receiving a negative evaluation of their capabilities.
Only 1.6% of traders remain profitable for the year. But they are very active and their share of trading turnover is around 12%.
- Traders who take profit increase trading volume than those who lose.
- The poor usually spend most of their income on participating in the lottery, and their demand for the lottery is inversely proportional to their lower income.
- Those investors whose current financial position differs from the level they set for themselves are buying stocks with a higher level of risk.
- Men trade more than women, and single men trade more than married men.
- Poor young people who live in cities and belong to minority groups are investing more in lottery-like shares.
People with gambling tendencies earn less than people without gambling. This rule applies to people, regardless of their income.
- Investors tend to sell the winning stocks and keep the losers.
- Turnover in Taiwan’s financial markets decreased by approximately 25% after the lottery was permitted in April 2002.
- In those periods when the lottery win is high, the volume of personal trades decreases.
- Investors often buy those shares that they previously sold at a profit, from those they sold at a loss.
- Increasing your search for the tool’s name means increasing your profit using it over the next two weeks.
Investors will trade more in the event that recent deals are successful.
- Traders do not learn to trade. The trader trying to learn through trading is like a game of gambling.
- The average day trader loses money on margin in exchange for the broker’s services.
- The losses of traders in Taiwan account for about 2% of the GDP.
- Investors hold a lot of shares from the sector in which they work.
- Traders with higher IQs are more likely to invest more in mutual funds and a broad class of stocks. So they earn more thanks to diversification.
Finally, they fail since their decisions are often based not on reliable studies or proven trading methods, but on feelings, the need for entertainment, and the hope of winning millions on the couch. Most traders forget that trading on the stock exchange is a profession, and it requires skills that must be developed over the years. So do not wait for you to become a millionaire by the end of the year, and be careful as you study your investment ideas and your outlook for investment as a whole.
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Now we have finished showing the reasons why most traders lose money. I hope this article serves as a light that illuminates you the way and reaches your goal in the world of successful trading.
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