Tuesday, May 27, 2014

Success Rate Of Top Economists

Bloomberg did a survey of top economist and their 2 year predictions on U.S economy. They ranked their success rate from 0 to 100 according to their right predictions. Most of the economist fall in category of 60-70 and only one reached at level of 85. But none of them touched the level of 99 or 100. Why? Did they are not good enough in their work?

        Well, they are top economist in U.S because they fall in category of 60-70 which is in my view very good rate. None of the economist or trader in this world can predict the exact future of market at every time. They could be right most to most 6-7 out of 10 but not all the time.

         This is the reason I call trading a game of probability where you could only improve your winning probability but could not be accurate all the time.

         Now, the lesson from it is, whenever we failed in a particular trade, we should cut our loss quickly. Because most of the traders generally are right 50% and 50% of time they are wrong. So to be profitable we can only make the losses shorter. Do not frustrate or underestimate yourselves from losing trade, they are inevitable in this profession.

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