We Are The Dumb Money!!!!!

[Bluesky]

Some retail traders make money. I'd hazard that most lose money (I seem to remember the figure is 70%).

Many years ago (in the 90s) I used to day trade and swing trade US stocks, I got to know a few insiders working for the various trading companies. They told me the failure rate for retail traders was around the 95% mark. I would imagine it hasn't changed that much, I would be surprised if its as low as 70% but perhaps information and trading systems have improved which may account for the increase in the success of retail traders.

[Anna List]

Some retail traders make money. I'd hazard that most lose money (I seem to remember the figure is 70%).

Many years ago (in the 90s) I used to day trade and swing trade US stocks, I got to know a few insiders working for the various trading companies. They told me the failure rate for retail traders was around the 95% mark. I would imagine it hasn't changed that much, I would be surprised if its as low as 70% but perhaps information and trading systems have improved which may account for the increase in the success of retail traders.

I seem to remember betfair dropping a bol**ck, just before they introduced PC, by releasing a statement that inferred that 95% of their customers lost over the long term so I'm sorely tempted to go with Bluesky's 95% rather than Ferru's 70%.

[Euler]

The majority of money lost on the exchanges comes from punters, system followers and chasers. If you trade at random you will get random results but lose because of the commission you pay to the provider. So the gap to overcome is really small and most of that can be overcome by not making obvious mistakes and exploiting those that do.

[LeTiss]

The majority of money lost on the exchanges comes from punters, system followers and chasers.

Exactly right, and this forum has been littered with all 3 of those over the years.

Their future on the exchanges puts them into another 3 categories -

They either saw the light and are now succesful
They gave up having failed
They are still struggling on, whilst wearing cheap underpants from Primark

[Derek27]

The majority of money lost on the exchanges comes from punters, system followers and chasers. If you trade at random you will get random results but lose because of the commission you pay to the provider. So the gap to overcome is really small and most of that can be overcome by not making obvious mistakes and exploiting those that do.

You can add arbers to that list. I was surprised how much and how consistently I was losing on Betfair (and winning it back with bookies) in the months I was predominantly arbing.

[Iron]

So the gap to overcome is really small and most of that can be overcome by not making obvious mistakes and exploiting those that do.

Would there be any chance that you could provide a list of these obvious mistakes please, as it could serve as a checklist for people to check their trades against?

You say that 'most' of the gap can be overcome by not making mistakes. What is required to bridge the remainder of the gap?

Jeff

[Iron]

I seem to remember betfair dropping a bol**ck, just before they introduced PC, by releasing a statement that inferred that 95% of their customers lost over the long term so I'm sorely tempted to go with Bluesky's 95% rather than Ferru's 70%.

TBH, that could well be far closer to the truth than my vaguely remembered figure from years ago.

So that raises an interesting thought - it would appear that, for the vast majority of Betfair users, the advantage of using the exchange is that they lose money more slowly than they do with the bookie (yet just as surely - the pleasure or agony persists for longer).

Jeff

[Derek27]

So the gap to overcome is really small and most of that can be overcome by not making obvious mistakes and exploiting those that do.

Would there be any chance that you could provide a list of these obvious mistakes please, as it could serve as a checklist for people to check their trades against?

You say that 'most' of the gap can be overcome by not making mistakes. What is required to bridge the remainder of the gap?

Jeff

I think the operative word here is obvious.

[Iron]

What is obvious to Peter might not be obvious to lesser mortals!

I think the operative word here is obvious.

[LeTiss]

So that raises an interesting thought - it would appear that, for the vast majority of Betfair users, the advantage of using the exchange is that they lose money more slowly than they do with the bookie (yet just as surely - the pleasure or agony persists for longer).

Jeff

I think that be best described as pure hope, Jeff. They think they have a chance with the exchanges, even if they realistically don't.

It's a bit like chasing after an attractive woman who you know is a lesbian. You keep trying just on the off chance she gets bored of dildos and strap-ons

[Derek27]

What is obvious to Peter might not be obvious to lesser mortals!

I think the operative word here is obvious.

I'm not speaking for Peter but I would imagine there's an infinite number of 'obvious' errors you can make, and it's mainly newcomers learning the craft that make them. A checklist of errors to avoid would be very much tailored to an individual.

Top of my list of errors to avoid would be overstaking but it may not appear on somebody else's list.

[Euler]

People hate losses and will do everything to avoid them is an obvious one.

[ruthlessimon]

Top of my list of errors to avoid would be overstaking but it may not appear on somebody else's list.

Take it back 1 step - why is the trader overstaking? Quickly I think you'll see it's not an obvious problem

[Derek27]

Top of my list of errors to avoid would be overstaking but it may not appear on somebody else's list.

Take it back 1 step - why is the trader overstaking? Quickly I think you'll see it's not an obvious problem

It's not an obvious error at the time, but on reviewing your trading it becomes obvious. Anyone who suffers a significant loss should be able to quickly work out what they did wrong.

[Anna List]

I seem to remember betfair dropping a bol**ck, just before they introduced PC, by releasing a statement that inferred that 95% of their customers lost over the long term so I'm sorely tempted to go with Bluesky's 95% rather than Ferru's 70%.

TBH, that could well be far closer to the truth than my vaguely remembered figure from years ago.

So that raises an interesting thought - it would appear that, for the vast majority of Betfair users, the advantage of using the exchange is that they lose money more slowly than they do with the bookie (yet just as surely - the pleasure or agony persists for longer).

Jeff

Correct but there's also an added "advantage?" to betfair users and that is that the number of ways that one can lose with betfair is far greater than with a bookie. For example, one can lay a horse and trade with betfair. Also, one can win much and often with betfair and they won't close your account.