From TradingView · · 1m 20s
The 95% misunderstanding for gold trading
Why 95% of traders lose money in gold trading, and what it really means.
In brief
Why 95% of traders lose money in gold trading, and what it really means. The 95% statistic refers to day traders who lose money without systems, not all traders. Originally reported by TradingView.
The 95% statistic
The 95% of traders lose money statistic is the most repeated, least understood cliché in finance.
The Brazilian study
Fernando Chague and Bruno Giovannetti from FGV São Paulo studied 20,000 Brazilian equity futures day traders from 2012 to 2017.
The result
97% lost money, only 1.1% earned more than the Brazilian minimum wage, and 0.5% earned more than a bank teller.
The catch
The researchers found experience did not predict success, with 300 days of experience being no better than a beginner.
The real conclusion
Day trading is not a profitable activity because the edge is too small and costs eat the profit.
The gambler vs trader
The 95% stat measures impulse traders, not systematic traders who use rules and discipline.
The graveyard of learning
The 95% who lose quit before 6 months, think stop loss is a suggestion, and trade without daily max loss.
The 300-day rule
Surviving 300 days means being in the top 5% of traders who started, not the default path.
What to remember
The 95% statistic refers to day traders who lose money without systems, not all traders.
