95% losers - Fact or Fiction?

I had always been lead to believe that 95% of traders lose consistantly and recently joined social networking site currensee ..... what i have found on his site is definitely more than 5% consistant winners and these accounts are all live, so I googled it and came up with some information from a source at currensee...

Currensee, as you know is more than a social network, in fact its mostly business here at currensee http://blogs.fxstreet.com/francesc/w...icon_smile.gif .
I’ve heard the number of 95% traders failing a few times before and I have to tell you that I think it’s worth looking into as the reduction of the spreads and experience traders have today changes these statistics.
In Our traders community for example (and we only have traders with real accounts) we see that more than 30% of them were consistently profitable in 2009.
I’d be be happy to share more with you if you are interested.
Thanks,
– Asaf.
If you read closely the arguments for the CFTC for restricting Forex in the US is because they take a blunt approach that all retail forex traders are unsophisticated and they all lose money - I strongly think it’s time to educate the CFTC a little and have them acknowledge that Forex is a legitimate asset class where some make money and some lose but it’s not that different than Stock, options or Futures.
Here is some of the information for the month of January 2010 split by the broker name for the brokers we have the most traders on.
MBTrading - 47% of traders made money
IBFX - 46% of traders made money
FXDD - 45% of traders made money
Forex.com 43% of traders made money
FXCM - 38% of traders made money
The most profitable pair for the month of January was EUR/USD with 51% of the traders who traded that pair made money.
I’d be happy to give you more detailed information via email (asaf at currensee dot com)
– Asaf.

Very interesting indeed.... so is 95% losers a myth or does currensee have better traders?

Regards,

Temps.

1. If that 95% figure is true, I don't care. I shall be part of the 5%
who makes money in these markets. It is my intention to retire rich
at 45, while I'm still young enough to enjoy it.

2. IMO, this figure is hogwash. Plenty of amateurs place trades in the market.
That doesn't make them "traders." If they don't observe the markets or
read business news, that makes them uninformed. It means they are
gamblers, not traders. If they can't be bothered to read books on
forex or browse articles from investing magazines, it means they are ignorant;
it doesn't mean they are traders. If they don't experiment and don't pay any
attention to economic forecasts or indicators, then they are not traders.

Do 95% of all trades lose money at some point before they are closed
by the person or entity that places them? Probably...but are they closed
at a loss? I doubt it.

This 95% figure comes straight from the mouths of the

DISCOURAGEMENT FRATERNITY.

Your own intentions are more important than their "knowledge," which is
second-hand and quoted from some other idiot. I'd ignore it if I were you.

lol I wonder where all my profits come frome when I don't pay attention
to fundamentals or indicators.

The 95% figure is quite accurate I would say.

There are no real statistics but I've come a cross a paper from the German Parliament about CFD Trading and Customer Protection. They asked the two biggest CFD brokers for how long a typical CFD account lasts. They said that accounts with 1-5k EURs are usually inactive after 0.5-1 year. Accounts with >5k Euros become inactive in 3 years on average.

One hot day does not a summer make and one month of trader results doesn't prove anything either.

I recently was speaking to the operator of a website that tracks MT4 performance and they said the brokers they have spoken to said the number is closer to 99% and the average time to blow the account is 5 months.

I bet if one called a retail broker and spoke to someone willing to be 100% honest with them, they would tell you some shocking statistics.

Does neither one trade or one month of data a trend make. Any idiot could have made money in January so to see a majority of traders still losing speaks volumes about their capabilities.

The mistake your making is to assume that 100% of traders visit forums and participate in market discussions socially. The VAST majority of "traders" are get rich quick suckers who see a forex.com commercial and think their going to be the next Warren Buffett. They open an account, blow it up in a few days or weeks, and give up. It’s too hard.

The people who would take the time to join a social networking site for currency traders are generally more dedicated to the project, so its stands to reason that members would have a higher profitability profile then the general market. In my experience, the 5% figure is probably accurate.

I agree with 95% maybe more.
If I had to start as a broker I wouldn't offset any traders' positions, but I would be counterpart of any trades, and even with no games like stop hunt or spikes there would be much money to make. No wonder why everyday there is a bunch of new brokers. It's a gold mine.

Yea i agreed as 95% or more is an accurate figure and its just because of thousands of newbies who knows nothing about the market and consistently keep blowing thier accounts & make this 95% losers fact true... Some leaves this game with great disappointment some carries on and after sometime finds reasonable system for them ...
I think trader starts making money after 2/3 years of his experience...So he gets out of this 95% losing range

Here's a sad reality: Even if the actual figure were 99.9% losers, 100% of the traders in the market would still believe that they have a legit shot at that 0.1%.

I believe the 95% figure to be accurate.

I have been around for a while now. Every once in a while you will find a trader who says been making money consistently over say 2-3 years and then all of a sudden that trader will take a huge hit and be out of trading for good.

Heaven knows blown accounts are a part and parcel of this profession. If you search FF you will find a lot of people referring to trading as betting. Well, if you are betting then you just made the % against you higher by 33%.

For a trader to be in the 5% or less bracket of successful traders you need a track record of 10 years where the return over 10 years has been higher than inflation adjusted amount and interest costs. This is not an easy target and very few traders ever reach it. The single man traders who do reach this level are usually so stressed out that they reach the burnt-out stage.

Anyway this is what one of the traders(trades for a bank), who I had the opportunity to speak to told me. His exact words: Psychology is the most important aspect of trading, even a fool with the right psychology will ultimately make money in this market. His explanation was simple: If you can objectively find out your strength's and weaknesses and then block the weakness you are a TRADER.

The markets will be RANGING, TRENDING, BREAKOUT etc etc. Which of these is your strength is the first and most important aspect. Once you know your STRENGTH, simply sit out(the most difficult thing to do) when anything else is happening in the market. By the end you will make money and die a very rich man.

I dont know if this helps anyone, but it sure as hell helped me.

Still trying to get the psychology right. After all after you are 20 you are pretty set in the way you think and act.

I always like to quote Xaron on this and the statistics over at Fxstreet's live trading contests.

"There are no official numbers. But if I look at both live trading contests at FxStreet.com in 2007 and 2009, 95% looks real.

In 2007 only 2 of 60 contestants ended positive: ~3%
In 2009 only 3 of 43 contestants ended positive: ~7%"

Although the samples are small I believe they are very representative for a couple of reasons.

1. These are LIVE trading contests none of that demo crap.
2. The contest offers prizes and also offers positions as prop traders to the winner so there is a high motivation to do well(although that motivation ofc is there with all live accs but this gives traders even more motivation.
3. It stands to reason you would have more experienced traders joining these contests... at least more experienced than the average joe who just makes an account after seeing an ad.

So from a sample of 103 you had roughly 5% end positive. But the picture is really even more dismal than that... as I remember Xaron saying that from these two contests at least a couple of the positives actually ended up at even. So really we are looking at 1-2% individuals who attained positive actual returns.

This is really just an exercise in mental masturbation. Who really cares whether it is 95% or 55%, nothing in life is easy or guaranteed, except death, taxes and crooked politicians. New businesses have an equally high failure rate too so what.

Look at top 10 global currency traders like UBS, deustche, barclays, citibank, JP Morgan, bank of america etc.

They are all making money. From where money comes?

Inflating and deflating currency prices = volatility.

When you take E/U from 1.51 to 1.25 (deflating), then all are earning money if they are on right side of the trade.

If you take A/U from 0.60 to 0.93 (inflating), then all are earning money if they are on the right side of the trade.

This volatility is bad for economy, people, importers, exporters, govt etc but who cares?

Every year there will be a major trend/s which will keep inflating or deflating currency prices.

Capture mega trends, add multiple lots and atleast make a 3 bedroom flat from forex profits

Whoever assumes that 30% of traders are profitable is falling for the survivorship bias. Look at the stats of one month seeing that 47% traders make money that comes pretty close to the coin flip taking into consideration that the missing 3% would be profitable without having a spread or commission.

Regardless, if you look at stats of a whole year, you just see that one year, which includes all traders that have been successful this year and if they´re really profitable, they should have been part of the stats in recent years. Nevertheless those stats are inaccurate if you want to measure the success rate of traders, because every year traders drop out of the picture if they crash their account and new traders come in. But traders, which are out of the market, are also out of the stats in the following year and therefore that stats of only one year is highly misleading not to mention the stats of just one month.

Will there ever be an accurate number for this topic? I doubt it, but I strongly believe, that the percentage of losers is within the 90-100% range.

And reading that the average account is only active for roughly a year, I´m happy to still be in the game

Good Am,This is a zero sum business,believe only what your mind can conceive.The only % I am concerned with is my own account.If I can help someone along the way great,Happy trading !!!

Maybe there is only 5% of profitable newcomers!!!!
And maybe they are the only ones who spend time to learn what they are doing, before opening a live account!!!

Without adequate training or education and probably most importantly self discipline it more than likely 95% of people fail at anything they attempt!!!

How many people join gyms, start other types of exercise only to stop before achieving their goals! Probably about 95%!

None of this means that you or I can't achieve our goals!!!!

People achieve amazing things when they are determined, disciplined and dedicated......even people who seem unlikely to succeed and have failed many times before..........(Just watch 'The Biggest Loser' for an example)

So ultimately I think that it is up to us 'The Individual' to determine whether we are in the 95% or the 5% (whether or not these figures accurate)

You only fail if you give up and stop trying before you succeed!

lol, ain't that the truth, it's what keeps 'em coming back and re-funding their accounts....."I'm nearly there I can feel it, this time I'll make it!"......but with absolutely no real idea of how or why!

This is a done thread.

I think that 95% of the money lost by the 95% ends up in the pockets of 95% of the 5% who are in actual fact less than 5% of market participants.

What y'all think?

.....yeah, what Leon said!

Not sure about the retail side, at institutional level, 98% of them end their day in the negative. Main difference for them (big players) is that they are hedged most of the time. When it comes to picking turning points, they are no better than the average retail traders. 95% losers (retail traders) most likely holds true.

Perhaps it has something to do with the 95% who worry to much about the statement "95% of traders loose" while the other 5% just get on with sound trading.

Razor