The advertising says it's easy, but the statistics say it's not.
Summary
Questions and answers
The 90/90/90 rule
Conclusions
Questions and answers
Is trading online easy or hard? Look at the questions below.
Is it difficult to open a trading account with a broker? No, it’s very simple! You can do it online in a few minutes.
Is a qualification or specific training required? Nothing! You just have to be of legal age (and have some money).
Is it difficult to transfer my money to the account? No, If you use a credit card, the transfer is immediate.
If you look at the answers above the process is very easy. You can start your career as a retail trader online without finding obstacles. Everything is projected to be easy!
So, it’s easy to make money? Yes, say the advertising, but … I’m not so sure about this fact.
The 90/90/90 rule
Do you know the 90/90/90 rule?
90% of online traders lose 90% of their capital in the first 90 days of trading activity.
Can it be realistic?
The European Securities and Markets Authority (ESMA) has imposed on the brokers that operate in Europe to publish statistics about the profitability of their retail investors.
These are some examples:
Screenshots made by Author.
I think that the 90/90/90 rule is very close to reality.
Another statistic says that 80% of all day traders quit within the first two years (Barber, Lee, Odean (2010): Do day traders rationally learn about their ability?).
An interesting article to read: Retail traders lose $350 billion in brutal year for taking risks.
Conclusions
The industry has created a simple and easy process to become a retail trader, well supported by advertising and a lot of internet sites projected to give useless education.It is easy to fall into this net.
Reality is different.
Online trading is a technical profession that requires adequate preparation.
This means years of study and a huge investment of resources before even making the first trade.
Even if you are a retail trader you must be a professional trader.
A sincere wish of good work to all!
Written by F. GRAMOLA (*).
(*) Member of S.I.A.T., the Italian Society of Technical Analysis (member society of I.F.T.A. – International Federation of Technical Analysts).
Warning
We merely cite our personal opinions for educational purposes only.
All trademarks are the property of their respective owners.
Investing and trading are risky. Don't invest or trade money that you cannot afford to lose.
Initial photo by Paolo Chiabrando on Unsplash.
Reality is different.
Online trading is a technical profession that requires adequate preparation.
This means years of study and a huge investment of resources before even making the first trade.
Even if you are a retail trader you must be a professional trader.
A sincere wish of good work to all!
Written by F. GRAMOLA (*).
(*) Member of S.I.A.T., the Italian Society of Technical Analysis (member society of I.F.T.A. – International Federation of Technical Analysts).
Warning
We merely cite our personal opinions for educational purposes only.
All trademarks are the property of their respective owners.
Investing and trading are risky. Don't invest or trade money that you cannot afford to lose.
Initial photo by Paolo Chiabrando on Unsplash.
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