“95% of all traders fail.” At least, it is such statistics that are most often given on the Internet. However, this figure has not been proven scientifically. Studies show that the actual share of losses is even higher. Here are 24 amazing patterns found by economists by analyzing data from brokers and trading results. Some items explain very well why most lose money on the stock exchange.

  • 80% of intraday traders stop trading during the first two years.
    Among these traders, almost 40% trade daily for just one month. Only 13% continue to trade for three years. After five years, only 7% remain on the market.
  • Intraday traders sell profitable stocks at rates 50% higher than losing ones. Profitable shares account for 60% of sales, at unprofitable – 40%.
  • The profit of the average individual investor lags behind the market index by 1.5% per year. Active traders lag behind the index by 6.5% per year.
  •  Intraday traders who have achieved good results in the past continue to make profits in the future. At the same time, only about 1% of intraday traders are able to achieve projected profits minus fees.
  • Traders with a 10-year loss history continue to trade. It turns out that they continue to work in the market even after they receive a negative assessment of their abilities.
  • Only 1.6% of intraday traders remain in profit on average for the year. However, they are very active – they account for 12% of daily trading activity.
  • Profit traders increase their trading volume more than intraday traders who suffer a loss.
  • Poor people tend to spend a large proportion of their income on participation in lotteries, and their demand for lottery tickets increases as their income decreases.
  • Those investors whose current financial position differs significantly from their level of claim are buying stocks with a higher level of risk.
  • Men trade more than women, and unmarried men trade more than married men.
  • Poor young men who live in cities and belong to certain minority groups invest more in shares resembling a lottery.
  • People who are prone to gambling earn less than non-gambling, and this pattern is true for people with any income.
  •  Investors tend to sell profitable stocks and keep losing in their portfolios.
  •  The volume of stock trading in Taiwan fell by about 25% after the approval of lotteries in April 2002.
  • During those periods when the winnings in the lottery are unusually large, the volume of individual trading is reduced.
  • Investors are more likely to re-buy the shares they previously sold at a profit than those they sold at a loss.
  • Increasing the frequency of searching for the name of an instrument means an increase in profits on it over the next two weeks.
  • Individual investors trade more actively if their recent deals have been successful.
  • Traders do not learn to trade. For an individual investor, an attempt to learn something already in the process of real trading is no more rational and profitable act than playing roulette.
  • The average intraday trader loses money on a significant margin after taking into account transaction costs.
  •  In Taiwan, the loss of individual investors is about 2% of GDP.
  •  Investors hold too many shares of companies from the industry in which they operate.
  • High IQ traders tend to invest more in mutual funds and a wider range of stocks. Therefore, they earn more through diversification.

    After becoming acquainted with these observations, the fact that most traders lose money is no longer surprising.

    They fail because, more often than not, their trading decisions are not based on reliable research or proven trading methods, but on emotions, the need for entertainment and the hope of earning a million dollars sitting on a sofa in their underpants. Most traders forget that exchange trading is a profession, it requires skills that need to be developed for many years. Therefore, be attentive to your investment ideas and how you look at the investment as a whole. Do not expect that you will become a millionaire by the end of the year, but keep in mind the opportunities that online trading provides.