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Why Only 10% of Stock Traders are Successful (and 90% Fail)

October 20th, 2015

Hey it’s Sasha Evdakov and welcome to Tradersfly.com where I share with you some insight and information about trading the stock market and investing.

In this video I'd like to share with you the concept about why is it that 90% of traders fail or only 10% are really successful and I have already done a video of this topic and concept earlier or before and if you want to visit that video you can go ahead and click this link right here.

Now that video focuses more on specific techniques and tactics that are actually applied in the stock market but i want to zoom in a little bit and focus on psychology and focus on just your own personal self rather than specific stock market techniques which is what happens in this video and the reason I want to cover this topic is because I get so many emails, questions, comments and just personal messages asking about “hey how is it that I can become successful or you can become successful if so many other people are not successful”.

I want to break this down into that human psychology factor and if we dig deeper into our own personal self or personal history think about it when you were playing sports as a little kid or doing any kind of activity.

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Typically what happens when you're younger your parents will put you into maybe lets say soccer camp or you’re going to play soccer for a year. After playing soccer for a couple of years you go ahead and hop and jump maybe into baseball it could be martial arts but it's a new activity and maybe you don't do soccer anymore and then a few more years later goes by and you might do a third activity.

Probably, typically in your life as well you've probably done or have been through multiple activities and it's a process that's a process that you jump from one thing to the next to the next until you finally find something that works for you for a longer period of time.

Now if we connect this concept of hopping from one thing to the next into trading people typically do the same thing when it comes to trading they will jump into trading stocks then they may jump into trading options without really being really good at trading stocks they will get into options then from options they may trade Forex because they weren't really good about that or they want to try something new.

When in fact they really never developed any one specialty, if you compare this to let’s say a professional athlete. A professional athlete sticks to one specific sport, really honing and focus on that one specific sport and develop their skills and talents and they continue playing it. Now you don't typically see professional basketball players are hockey players jumping from sport to sport and then doing one sport one season doing another sport another season doing a third sport maybe the next year after that.

This is typically not the case that's not their specialty that's not their expertise but this is what happens in the stock market people give it a try they hop out they do something else and then eventually they don't do it anymore and if you add all those people up then of course you're going to see that 90% fail just like 90% of athletes fail or similar concept of why ninety percent of business owners fail as well.

Now I like using the concept of business owners as examples because it really ties in really well to the stock market and I think a lot of people can relate to starting a business because you go ahead open up shop whether that's a lemonade stand you go ahead offer a product or service collect the money and you start generating revenue but you're not making a million dollars from the first time that you open up that table with that lemonade stand.

It takes a little bit of time to grow that business and build it up and what happens is when people are starting a business they’ll hop from one business or from one niche then will jump to another niche because that first niche is not successful for them.

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Then they go ahead and repeat the same mistakes that they did in that first niche and go to a third niche. For example if you're starting with let's say a lemonade stand or producing fruit drinks then you go ahead and jump to maybe you lawn service or there you go ahead and jump to you know fixing people's roofs or you go ahead and remodel people's home.

So you're jumping from one business to the other and it could be completely different category it could be cleaning carpets or it could be jumping into being a hairdresser nevertheless you're hopping from niche to niche.

Let's say you're opening up a beauty salon and you see that there are so many other beauty salons that are successful however your salon is not successful then that means there's something wrong with your business strategy that means that there's something wrong with the way that you're handling your business and that there's nothing really wrong with the niche or industry themselves.

Let's just say for example say that you're opening up a lawn service business and you've been hopping from each niche to niche because other niches have not been successful or profitable and now you're opening up this salon service business however you're not successful, you're not profitable, your business management isn't working out and you're just not acquiring the customer.

If there's other businesses if there's other lawn service businesses that are successful and are making money does that mean that that niche is bad? Does that mean that niche isn't working out or is not profitable? No, it simply means that you just haven't figured out how to make business work.

It just means that you haven't figured out how to properly market your business how to properly get the exposure to your customers and continue to add value to our customers so that way you can continue to make a profit and grow your business.

Typically what happens is then that person the business owner is going to jump to the next niche because you're assuming or thinking that that lawn service business is not profitable it's not a profitable niche when in fact it's very profitable you just haven't figured out the appropriate steps to make the business work so typically what happens is all these business owners millions upon millions of business owners fail all the time and more than ninety percent of business owners fail their first year over 95% fail within in the first five years yet we don't really discuss or talk about this as much as we do in the stock market.

That is because it's an emotional connection when you're dealing with money in the stock market less so much in a business because you've putting in your time or there's that counter factor of hey it's your passion to go ahead and you know cut people's hair and make them look beautiful, it's your passion to go ahead and create beautiful landscaping for homes or it’s your passion to remodel a house.

This passion can skew the results or skew the perspective thinking and saying that because it's my passion it's ok that it failed I'm going to go ahead into another niche because that niche was not profitable.

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In fact this is what happens with trading is that people hop from one thing to the next weather that's first they get into day trading then they get into swing trading then they get into shorting then its options then its Forex then it’s Futures hoping to find that niche or that area that works for them when in fact they haven't really learn the fundamentals of how to make trading work for them.

As we start evaluating these types of people that are hopping around from one thing to the next you’ll notice that there's different tears but really in the end its people hopping around from one thing to the next.

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You'll have the first main tear where people generally hopping around generalist hopping and those are similar to the ones trying out different sports when you're a little kid so the same thing in the stock market they will hop into the stock market just trying it out hoping to make a quick buck then they may happen to a real estate investing or real estate remodeling.

They may hop into buying and selling cars so they'll just generally hop around trying to do different things then you may have those mid-range hoppers who you know trying different things with in the stock market not really having a specialty as we continue going deeper and deeper into evaluating this then you may have those people that are really focus but don't have the longevity to stick with it.

These are the people that I really try to pull for because those people are the ones that have that potential to actually succeed. I want you to think back when you were getting a job looking for a career or actually making some money.

If you're making some money right now and you're in a job and let's just say you're making 10, 20 50,000 75,000 whatever the number is or if it's much higher then go ahead and think about that number but if you're making some money and you've achieved a certain level in your life whether you're making twenty thousand a year or $100,000 a year it took you some time to get there even if you're at the $20,000 level you probably have to go through some sort of schooling or some high school and then get that kind of job.

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If you're making a little bit of a higher pay grade you probably have to go through again some schooling probably some job in high school probably another job maybe a position and another position so it took you multiple years to get to that pay salary you didn't automatically start with $100,000 a year job and even if you did it still took you all that education and that time to get there it's a building process that takes time to get there.

Most people what they do in the stock market what they think about is they go ahead and jump into the stock market because really all you need is a trading platform and some capital and then you can start trading and they hope that they're going to be successful or just as successful making their 50,000 $100,000 a year in that first year when in reality it takes time to get there.

Just like your education took time just like your mentorship program took time if you’re a doctor just like your training if you had your first job took time the same thing and if you're building a business it takes time to build your business to profitability it may take some time to purchase equipment to figure out and hire the right employees to get those customers.

It doesn't happen overnight it takes time it takes discipline it takes focus it takes doing the right actions the right steps to get to those levels and a lot of people when they hop around they don't put in that time or they're not able to stick with it long enough to become successful.

Now, for these people the people that are really motivated that stick with it for one or two years they are right at that break and usually right at that break where they are nearly successful where they're starting to put puzzle pieces together and things are almost working out.

Unfortunately that last moment or towards those ends of those last moments here right at those edges is where they go ahead and try something new and try something different. So if I was to really summarize this whole video in this whole lesson about how things play out and why do ninety percent of traders fail or 10% that do succeed it's because of the ability to focus.

It’s because of the ability to stick with something and make adjustments to your plan and if you treat this trading or investing like a business it takes time to build, it takes time to build anything in this world, it takes time to grow anything in this world, it doesn't happen overnight it takes time, focus, discipline and if you have that stick to it and if you have that discipline then you're going to be able to be more on the higher probability of success rather than the less probability of success.

However if you're already making $50,000 a year $100,000 a year from your job you're looking to take up trading you really can expect to be making fifty or a hundred thousand dollars a year right from the start simply because you have some cash or capital. There's still a process that you have to go through in order to get your pace in order to put in your time in order to put in your education to learn about the business.

To learn how business works in the market to learn how investing works so that way you're not hopping from one thing to the next and failing with each step so your ability to stick with it and the ability to grow over time will allow you to go into trading options in the future will allow you to do different trades to do higher risk trades in the future but you don't start it at the beginning.

It's a step-by-step process moving up with time.

Alright I hope you found this video little bit more insightful about the psychology of why only about 10% of traders actually succeed and this is really just about human behavior and really most people only succeed 10 percent of the time in whatever thing that they do because we do different things to get to where we are.

You might have tried out your own difference sports you might have tried out other different businesses you might have went through different classes in school and some of you like better or succeeded better in and others you just didn't do as well and that's the nature of everything we do in this world.

Thanks again and remember to do what you love, contribute to others, but most importantly live life abundantly.

Author: Sasha Evdakov

Sasha is the creator of the Tradersfly and Rise2Learn. He focuses on high-level education speaking at events, writing books, and publishing video courses on business development, internet marketing, finance, and personal growth.

I'm Sasha, an educational entrepreneur and a stock trader. In addition to running my own online businesses, I also enjoy trading stocks and helping the individual investor understand the stock market. Let me share with you some techniques & concepts that I used over the last 10+ years to give you that edge in the market. Learn More

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