Why Only 10% Succeed

Reasons for Market Success vs. Failure

90% That Try Trading Lose Money!

Many often wonder why 90% of people that invest in the stock, bond, commodity and currency markets end up losing money – both in the short run and in the long run.

It’s not by chance – there are two very specific reasons.

First off, most people spend more time thinking about what automobile or TV to buy than they do thinking about how to invest their hard earned life savings.

Unless you win the lottery, there’s no such thing as easy money – no matter how much you want to believe it! Those who believe in easy money in the markets are in the majority that get creamed!

Since the dawn of trading, the markets have not been neutral or indifferent, but instead quite unforgiving to the unaware and inexperienced participants.

If you watch the financial shows on TV – best of luck to you – just about everyone else that wants to make those “easy killings” watches these shows as well. They are in that aforementioned 90% of “investors” that end up losing money to the markets.

If you do what 90% of the people do, you will get the same results of 90% of the people – in the markets – that translates into losing money!

Never forget, the primary job of the market(s) is to make the most number of people as {financially} uncomfortable for as long as possible – and the market(s) does it’s primary job quite well.

Another fact to never forget when it comes to the markets:

"What you don't know could hurt you VERY much!"

You could get the best investment advice possible from the best investors in the world, and you probably couldn’t act on that advice. Why? Because you lack the experience.

Serious investing is a full time job, just like being an attorney, a physician, an accountant or a small business owner. It’s not intended for people who just casually watch the stock market / their investments for half an hour a day, although most people treat it that way.

The greatest investor / trader on the globe can relate his or her exact strategy for making money in the markets, and, chances are, you still won’t be able to act on it.

This is because a big part of investing is due to the “gut feeling.’ Only after many years of investment experience do you begin to have a “sixth sense” of what’s going on in the markets. Without that experience, you’re missing something very critical.

Some say that to become an expert on anything in life, one needs to have at least 10,000 – 15,000 hours of study, experience and repetition “under your belt”. When it comes to acquiring consistent success in trading / investing in the markets, that sounds about right.

How many people are willing to put in that kind of time and effort?

Not Many!

They will spend considerably more than that in their chosen profession in order to make anywhere between $50,000 to $250,000 per year, but when it comes to investing their hard earned dollars, most take a casual, laid back approach.

Taken seriously, a business person (i.e. doctor, lawyer, small business owner, etc.) can earn millions of dollars if they put the time into learning how the markets work. The problem is – most business people just don’t have that kind of spare time.

Do you ever wonder why that 10% of consistent market winners continue

to be in the minority?

And how you can join the ranks of these elite?

I’m sure you have – and, believe it or not – it is attainable – if you apply yourself or

use an Advisory Service that has already put in the time and effort to be in that 10%

of consistent market winners.

Here's The Main Reason that 90% Lose:

Most of the time, the 90% are buying stocks, commodities, etc. when the market is topping out.

For example, look back to early to mid-2000 when the S&P 500 reached almost 1,600 and, more recently, in late 2007 when the S&P 500 almost reached 1,600 again!

All of the financial talking heads are touting the stock market – in other words – things are looking spectacular for owners of stocks / the sky’s the limit!

It’s at that time that the professionals (the 10%) were quietly selling / distributing their previously purchased shares (with huge profits) to the smaller investors, who are buying the “hype” (at almost exactly the wrong time) and always ultimately left “holding-the-bag” (for big losses).

On the other side of the coin:

Most of the time, the 90% are selling their stocks, commodities, etc. out of frustration (while taking large losses) when the market is bottoming out.

For a past example, look back to early 2003 when the S&P 500 fell to 800 and, more recently, look to March, 2009 when the S&P 500 dropped to 700 – the financial world appeared to be ending.

In March of 2009, disaster appeared imminent. Stocks were falling, unemployment was soaring, and it seemed like the end was near – market panic was rampant.

All of the financial talking heads are saying the end is near – in other words – things are looking extremely gloomy for holders of stocks, commodities, etc.

It’s at that time that the professionals (the 10%) were calmly and quietly buying / accumulating their shares from the smaller investors (the 90%), who have sold out their stock holdings (at almost exactly the wrong time) with large losses.

The general public (the 90%) is not aware, but this cycle repeats itself time and time again – and if you learn what to look for (or use an Advisory Service that knows what to look for) – you too can be in that exclusive and elusive 10% of consistent market winners.

All markets, whether it be stocks, bonds, commodities or currencies have one thing in common:

They all experience four very distinct “phases / stages” of price movement.

This is how the "Smart Money" manipulate the markets - they've been doing this forever!

It’s so simple that most overlook it – all of the markets – time and time again – form a basic bell curve!

For More Details, See:

"The Four Market Stages" Page

Open A Free Account

A Bell Curve

The Bell Curve shows the 4 Market Stages (Detailed on the left & on "The Four Market Stages" Page).

A bell curve is a plot of normal distribution of a given data set – in this case – market prices.

Again, please refer to "The Four Market Stages" Page for details.

If you look at any longer term stock, bond, commodity or currency chart, you’ll notice the cycle begins at the far bottom left of the chart, you’ll observe a flat bottom (prices are essentially moving sideways in a channel).

You will learn from reading below that the markets are far from random, that they move within an almost musical symmetry and flow - yes - the smaller "ebbs & flows" within the main price moves can appear random, as much of the market "noise" is, but the overall movement has "method" behind it.

This is known as the Accumulation Phase (Stage 1), where the “smart money” (the 10% of professional traders) are quietly accumulating (purchasing) their stocks (inventory).

Who is the "Smart Money"?

The Institutions:

The Big Banks, Insurance Companies, Hedge & Pension Funds, Mutual Funds, Sovereign Wealth Funds as well as very experienced traders - essentially all of the deep pocketed,

big money traders and investors.

The Institutions are also known as The Professionals.

It is the Smart Money that moves the markets due to their sheer financial size.

Once, observing volume in conjunction with price movement, one is able to decipher their moves, a trader can (many times), know their intentions in advance and align with what they are doing.

The smart money must do their buying slowly & gradually in order to not drive prices higher too quickly, that is, until they have absorbed most of the existing supply

(the smart money's subtle way of "cornering the market").

This accumulation stage can last anywhere from several weeks to many months.

The public sentiment is that the stock (or stock indices) is boring and no one in the public (90%) is paying any attention.

Then, prices break out (to the upside) of this sideways channel (on high trading volume), which indicates that the buyers are now outnumbering the sellers – that is, the buyers are now taking control / winning the proverbial tug-of-war.

Since this is usually quite subtle, the public (90%) is still not paying any attention.

Now, we’ve entered the “glorious” Mark Up Phase (Stage 2), which is also known as a Bull Market. Now more and more people are buying and trading volume is increasing as prices are increasing - this is EXTREMELY important!

As prices continue to climb, the TV talking heads are starting to perk up and the public is starting to cautiously pay more attention – and some are even beginning to buy into this developing Bull Market.

Eventually things get frenzied – everyone is buying and everyone is talking about a market that’s headed for the moon!

As the late legendary trader, Jesse Livermore, said back in the early 1900’s: “When the shoe shine boy is telling me to buy stocks, that’s when I sell everything I own immediately!”

Now, the 10% (seasoned / consistent winning traders & investors) are quietly beginning to sell (Distribute) the shares they had initially purchased during Stage 1 (Accumulation Stage) and at the beginning & adding onto their positions purchased during the Stage 2 Bull Market and - upon liquidating / selling these previously purchased positions - reaping immense profits!

Who, you might ask, is buying from them?

You guessed it – the 90% of the (uninformed) frenzied buying public. That’s right, now everyone in the public is buying as many shares as possible (usually exactly at the wrong time)!

As this happens we begin the top of the bell curve, known as the Distribution Phase (Stage 3), where, as mentioned above, the professional 10% are quietly selling / distributing (unloading) their previously purchased shares to the unsuspecting public (90%).

Not only are they unloading previously purchased shares, but they are selling short new shares in order to profit from future falling prices. Prices become choppy & volatile and usually move sideways in a wide, "sloppy" channel.

This distribution stage can last anywhere from several weeks to many months and is well known (by the professionals) to witness VERY volatile price action as shares trade hands from the strong handed sellers (10%) to the weak handed buyers (90% unsuspecting public).

The public sentiment is still very bullish and more and more of the 90% (public) are buying like crazy!

Eventually, prices begin to break down from the sideways channel and we enter the Mark Down Phase (Stage 4), which is also known as a Bear Market.

Now more and more people are beginning to sell their previously purchased stocks, bonds, commodities, currencies, etc., however the majority will hold on and hope and pray for prices to reverse upward once again.

All of the financial talking heads are saying “grab these great bargains” as the prices continue to fall. Those that listen to them, intensify their losses!

Side Note:

As a trader (or investor), once you start trading on emotions, it's just easier to flush your money down the toilet!

A favorite quote from Al Rizzo:

"When a falling stock becomes a screaming buy because it cannot conceivably drop further, try to buy it thirty percent lower."

If you want to lose money in the markets, just listen to the "experts" on the financial news channels - they will all but guarantee that you will make poor investment choices over time.

They have an agenda / paycheck to protect - believe us - they're not looking out for your financial well being!

You must be able to "cut-through-the-noise" and there is a lot of it - some deliberately designed to distract and confuse, some just occurring randomly - either way - you must avoid letting the "noise" influence your behavior / trading method.

As mentioned above, the “smart money” has been selling short to the unsuspecting public, who is still caught up in the buying frenzy.

The “smart money” / 10% (professional traders) are now making huge profits as prices begin (and continue) to fall, while the public is continuing to hope and pray that prices stop falling and start to go up once again.

Eventually later (many times months and sometimes years later), market prices begin to stabilize (form a base) and we begin the Accumulation Phase (Stage 1) all over again, where the “smart money” (10% professional traders) are quietly accumulating (purchasing) their stocks (inventory).

And so the cycle starts all over again!

Two rules for investing/trading:

Rule number one : most things will prove to be cyclical

Rule number two : some of the greatest opportunities for
gain and loss come when other people forget rule number one

-Howard Marks

For More Details, See:

"The Four Market Stages" Page

Once you learn (through experience) to look for this ever-recurring cycle (or use an Advisory Service that’s aware of this recurring cycle), you too will be in that 10%

of consistent market winners!

The above information is meant to simply explain how to keep a trader / investor on the proper side of the market - the "how to" as far as actually profitably executing, monitoring and exiting trades is where an experienced Advisory Service comes into the picture.

Once again, it's important to remember, when it comes to the markets:

"What you don't know could hurt you VERY much!"

No Longer Sit on the Sidelines!

Opening a Free Account is easy and fast.

We now will only consider accounts with $50,000 or more.

Proof of brokerage account balance is required before the Trader Screen

Letter of Agreement is sent.

You can use your current broker (a Level I options account status is necessary) or open a new account with any major brokerage house.

You get the timely buy & sell recommendations, execute the trade and send us your fill sheets - it's that EASY!

See: "How Trader Screen Operates" Section at the bottom of the Home Page.

Retire early with a HIGHER STANDARD OF LIVING!

A Large part of Trading Success depends on Risk Management!

In Addition (regarding the very important subject of Risk Management):

Asymmetric Leverage must always be employed.

Asymmetric Leverage is the attempt to profit from the potential upside of leveraged trading with very limited downside risk -- that's the key to trading longevity!

For more information on Leveraged Trading:

Types-of-Risk

For Details on Risk Management, you can order:

Trader Screen Stock & Commodity Overview Report

Open A Free Account