Lessons › Why traders lose › 91 out of 100
World 11 · Why traders lose · lesson 6 · level 1
91 out of 100
In India, Brazil and Taiwan, most individual traders lost money, so losing is the normal result, not a flaw in you.
In one line
If you lost money trading, you are not bad at this. You are normal.
Explained simply
Three countries counted how many ordinary traders lose. India's market watchdog checked one full year of futures and options, bets on where prices go next: 91 out of 100 traders lost money, about $12 billion together. In Brazil, 97 out of 100 people who day-traded, buying and selling within the same day, for more than 300 days lost money. In Taiwan, fewer than 1 in 100 day traders made reliable profits after fees. So if you lost, you are normal. The money leaves through three doors: costs, leverage (borrowed money) and the other side of your trade.
Mistakes to avoid
- Deciding you are uniquely bad at trading, when losing is the normal result.
- Judging your odds by the few winners who post, not by studies of everyone.
- Forgetting fees: in Taiwan, fewer than 1 in 100 day traders made reliable profits after them.
Check yourself
In India's one-year study, how many of every 100 individual traders in futures and options lost money?
91 out of 100. 91 out of 100 lost money in that one year, about $12 billion together.
What does "losing is the default" mean?
Most traders lose; it is not a flaw in you. Different countries, different markets, same result: most traders lose. That is about how trading works, not a flaw in you.
In Taiwan, how many day traders made reliable profits after fees?
Fewer than 1 in 100. Of over 360,000 day traders, more than 80 in 100 lost, and fewer than 1 in 100 made reliable profits after fees.
Which are the three doors the money leaves through?
Costs, leverage and the other side of your trade. Costs are paid on every trade, leverage (borrowed money) makes losses bigger, and someone on the other side takes what you give up.
Picture 100 people like the Brazil group. About how many earned more than the minimum wage from day trading?
About 1. Only 1.1% earned more than the minimum wage. Even most of the few who did not lose earned less than that.
Goal of this lesson: Name what three countries found about individual traders, and the three doors the money leaves through.