Did you know the stock market offers a 100% win rate strategy? And do you know why investors are more successful than day traders? I analyzed 20 yrs of the stock market and found this.

This is SPX.
From 1st Jan 2000 to 1 Jan 2022, there were 8036 days.
But the number of trading days in the same period was only 5537.

Out of 5537 1 Day candles, 73% closed above the 200-period exponential moving average, and 27% closed below it.
It means that 73% of the time, the price was in an uptrend in the last 22 years.

Wait, so if you just buy in this 70% uptrend market, then you should make some easy money, right?

If you had invested $100,000 in the stock market index on the very first trading day of the year 2000, you would have been down 10% at the end of the year.
If you had bought on March 24th of the same year, say goodbye to 50000 dollars, because you would have been down 50% on Oct 10th, 2002.
Forget profit, that’s around 3 years passed, and your account is already half.

Would you have kept that remaining $50,000 risk in the market when your account was 50% down?

Maybe you did. The price sure did move up, but it took around 8 years to reach your breakeven price.
In 8 years, you have not even made a single dime from investing.

Now that the price is at breakeven, would you have still kept the $100000 at risk in the stock market?
Because guess what, it’s 2008, and we are going down from here.
Remember the 50% drawdown of last time?
Forget that; you are making a 57% loss this time.

Are you still going to keep the money in the market when the market has already eaten more than half of your account?
Also, don’t forget that you haven’t even made a small profit in around 9 years.
After 10 years, you are still at a big loss.
Maybe you think the stock market is not for you.

But on March 8th, 2013, the price is again at your breakeven price.
It’s been around 14 years, you haven’t made any money, and you now have a chance to withdraw your $100,000. Would you do it?

Forget the year for a minute, and focus on the percentage gained and lost.
If these were your monthly percentage returns, and you were a day trader, would you have blamed the trading strategy?
I mean, surely a big loss on the account and 14 months of no profit is enough to switch the trading strategy, right?

But that’s exactly why most day traders don’t make money.

Even after multiple years of negative profit, an investor is very unlikely to switch his strategy because they buy with a long-term view in mind, as statistically, the stock market goes up in the long run. That’s almost a 100% probability.

But most day traders have a long-term view that is smaller than an ant.
They come with a get-rich-quick scheme mindset.

Even if you give them a just-above-breakeven strategy that has a 100% probability of making money in the long run, they will still switch the strategy when it makes a loss in the short term. Most investors will never do that.

The investors who held their position through that 14yrs of not making a profit, especially with compounding, made an excellent profit when the probability started doing its job.

So play the long-term game to be successful in the market!

That’s all!