DislikedFirst, I just want to say it's us, retail traders, not by ourself but as a whole aggregate group, are the ones who are making the market efficient; we are the ones who are making EU spread as small as 0; we are the ones who make sure the global bank that katrooo works can't charge an arm & leg for commissions and fees for exchanging currencies. The Big Banks would LOVE for us to give up so they can go back to the good o' days where they can make billions of $$ just on spread and commissions.
There was once an examination of Oanda's client...Ignored
I am sorry to say it, but you are very wrong in many points.
First paragraph: There is no way and chance that retail is making FX efficient, I do not have exact numbers but my estimate is that retail ~ 1% of volume in FX market. FX retail trading is done via leverage, the way how retail brokers hedge their exposure do not affect the market in some cases (e.g matching orders, trades, separate books etc). Even if they hedge, their volume is very low to affect the market / increase the overall liquidity. To give you a better overview, you have hundreds of banks which make markets in G10 or EM FX and which provide the liquidity to market participants in interbank OTC market. This market is created mostly by institutional and corporate subjects. Institutional group means central banks, pension funds, government SPVs, hedge funds, asset management firms, also retail brokers (very small part) and corporate means all the different oriented subjects, like Coca Cola, Siemens etc who are hedging their cashflows in the FX market. Hopefully you are smart enough to understand how big and liquid this market is. There are thousands of big institutions which engage in FX trading and retail is incredibly small part of it, therefore banks do not give a sh*t if you trade it or not. From my own experience I can tell you that 100 million ticket in EURUSD does not move the market ussually, because it is extremely liquid. There are situations when big hedge funds / asset managers roll over their exposure and they ask for 1 yard in EURUSD and they get a quote with 3 pips spread from the biggest FX houses (meaning DB, Citi, UBS).
Second paragraph: If you are inteligent enough, you can interpret this data in a bit different way. What does it mean that 25% of forex retail traders were profitable in ONE quarter? In statistical perspective it does not mean anything, do you have a proof that the same 25% set of people were profitable in prior 10 quarters (at least) and the same set of people will be profitable in next following years? I guess you cant. Many people trade FX in a gambling - similar way, so it is not that hard to stay profitable in a quarter, so maybe in the next quarter you will see again the same number of 25% but with completely different set of people. I would trust the statistics if Oanda showed how many people were consistently beating the market in last 5 years, they were using sound risk management (which can not be checked in any way), and traded at least few hundred times in that period. Honestly, I do think that we would see extremely small number, probably in a 1-3% range.
Third paragraph: I studied at the university (not MBA) and I am doing well, and I think it was worth it. It is still definitely better to have good education and experience a.k.a exit opportunities than to fully rely on trading. Now I am not talking about someone who can do it full time and can trade it in a size which will make him a decent living. I also know many other people who studied MBA at top universities and they are doing extremely well, so it obviously depends on which kind of MBA your friends have. Salaries you can get later on are extremely rewarding, so I think that your words are bit weird. If you are telling me about so called "FREEDOM", why would you not trade for a hedge fund for 1 YEAR, making those 10 millions if you are that good, then you finish your job and you have your FREEDOM. In one year you can be totally independent and then you can even trade with those 10 millions if you wanted.
Whatever, I wish you good luck on your trading journey