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According to the U.S. Small Business Administration, over 50 percent of small businesses fail in the first year and 95 percent fail within the first five years. It's interesting that this 95% number matches the infamous number of overall losing traders.
The problem I have with this stat is that it probabably includes every yayhoo who ever threw $3000 into a futures account and blew it out in a week.
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Seems to me if you put money into an account you should be counted. That’s the key here. Anybody with some money and a dream can start trading. Clearly that should result in high failure. A lot of very smart people, with the best educations money can buy, have difficulty trading. It stands to reason that the "average Joe" would not be any different.
A lot of people will mention psychology. We all have our demons, even if we don't know about them. "Trading the S&P's on a 5 minute timeframe is the best naked psycho therapy.."-Bill Williams. If a person does not have the mental make-up to trade, they can still open an account.
Anybody can move to LA and be a waiter/actor. Most fail. Fewer Brain surgeons wash out because they are washed out prior to reaching the end. That is, actually being a brain surgeon.
As I just posted in anther thread, Harvard did a study and came to these conclusions.
Yes, systems sellors and hucksters may use this to their advantage. But they could not if there was no truth in it. The turth: the failure rate is high. And for a zero sum game (which impies 50% failure) it is more than half. My broker says it is not 95%,but then again he has the yacht
