99% Traders are at loss!
PROOF: See here Zerodha CEO saying link
This includes day traders, margin traders, future traders & option traders as well.
Why Traders are at loss?
Trading is based on price movements – NOT fundamentals
Profitable Trading requires lot of experience, sophisticated software & insider information
A Winner trader will not share tips – as it can impact his profits – so you are all alone to invent your trade strategies
Even with a winning strategy you might loose – as a news can bust all candle & signals
Now if you made consistent profits – you owe lot of taxes & short term capital gains. Plus other expenses of electricity, internet, health (stress, tensions) & opportunity cost of time & capital.
So that is why the Zerodha CEO saying only 1% traders actually make more than Fixed Deposits. It means
What is Opportunity Cost of Time?
If your hourly pay rate is Rs. 1000 – then 100 hours could have earned you Rs. 1 Lakh.
(this is your Opportunity Cost of Time)
So if you are spending 100 hours on trading – you should get back above Rs. 1 Lakh!! Otherwise it is a loss.
What is Opportunity Cost of Capital?
If your passive returns on capital is 12% (Corporate FD) – then this is your Opportunity Cost of Capital.
So if you are using the same capital for trading – you should get back above 30%. Otherwise it is a loss.
SUMMARY
So 99% above Traders are at loss!
Most of the Winning Traders make less than FD returns.
Trading is like Active Business & Takes lot of your time, energy & health