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95% / 5%

  • #1
  • First Post: Feb 10, 2008 10:33am Feb 10, 2008 10:33am
Where does it say that 95% of forex traders fail? Who came up with this number? Where is it published or documented? Seems like this "fact" floats around quite a bit, but I've never actually seen "proof" that this is the case.
  • #2
  • Feb 10, 2008 10:45am Feb 10, 2008 10:45am
if i showed you proof would it make you a better trader?, i wouldnt worry about it
  • #3
  • Feb 10, 2008 10:46am Feb 10, 2008 10:46am
http://www.forexfactory.com/showthread.php?t=67241
  • #4
  • Feb 10, 2008 10:47am Feb 10, 2008 10:47am
u know wat thnx for bringing that subject up almost every1 says u never win in forex. i think they say that bec they r losing or have lost everything.
i think forex is all about studying the market luck only plays 5% if even that.
"what doesn't bankrupt me, makes me stronger" modern nietzche
  • #5
  • Feb 11, 2008 3:22am Feb 11, 2008 3:22am
Quoting salah k.
u know wat thnx for bringing that subject up almost every1 says u never win in forex. i think they say that bec they r losing or have lost everything.
i think forex is all about studying the market luck only plays 5% if even that.
There are more people that lose their money instead of earning.
However I'm sure it isn't that number everyone is screaming about.
The ones who earn the most are the ones who have the most experience...
And the most experience is gotten by studying and trying all sort of systems.
  • #6
  • Feb 11, 2008 3:27am Feb 11, 2008 3:27am
I think part of the problem is people opening up crappy $500 accounts and over-leveraging their accounts to compensate for a lack of funds. Also, many wouldn't trust their brokers with more than $500. Do most lose money for other reasons, such as greed, fear, etc.? Sure, but there is more to the story than just skill.

Think big, think long-term, and you'll be fine.
  • #7
  • Feb 11, 2008 5:36am Feb 11, 2008 5:36am
Quoting scexglobal

Think big, think long-term, and you'll be fine.
This is how you have to approach everything.
Think big and big things shall happen.
  • #8
  • Feb 11, 2008 7:00am Feb 11, 2008 7:00am
5% means that 1 in every 20 succeed. Those are pretty damned good odds if you ask me.

Anyway, there is no proof, and there can NEVER be any proof of that number because first you would have to define success and define failure, which is far trickier than it may appear at first. Unless you can define those terms in the context of trading, then there is no point in even discussing this any further.
  • #9
  • Feb 11, 2008 7:14am Feb 11, 2008 7:14am
Quoting fierceman
5% means that 1 in every 20 succeed. Those are pretty damned good odds if you ask me.

Anyway, there is no proof, and there can NEVER be any proof of that number because first you would have to define success and define failure, which is far trickier than it may appear at first. Unless you can define those terms in the context of trading, then there is no point in even discussing this any further.
Failure would be digging yourself into a negative equity hole...one you have a slim chance at getting out of.
  • #10
  • Feb 11, 2008 7:37am Feb 11, 2008 7:37am
Quoting bronxterp
Where does it say that 95% of forex traders fail? Who came up with this number? Where is it published or documented? Seems like this "fact" floats around quite a bit, but I've never actually seen "proof" that this is the case.
Hey Luke, hows it going? The 5% is a huge number if you are in it. So squeeze on in (if you aren't already) and we'll try to make it 6%/94%.
Robonacci com
  • #11
  • Feb 11, 2008 7:57am Feb 11, 2008 7:57am
It just seems to me that those who use the whole 5% success rate seem to be the ones selling some course. These are the same people telling you that you can make millions very quickly if you follow them.

I realize that everyone has a different definition of success and failure. I define success in trading as anyone who can pull at least $0.01 net profit over a significant period of time...at least 3-6 months. If thats the definition then I'm thinking that we're talking more along the lines of 10-15% success rate. As far as elite traders who can actually pull a consistent income out of the market...maybe then we're talking 5%...more likely 1-3%.

I just don't think its as grim as everyone makes it out to be. Yes, this is a tough as heck business. I'm entering my 7th year of trading now and still don't believe I've made it this far. I started off in a trading office in NYC with around 90 people and I'm one of two or three that are probably still trading. I'd say that half of them walked away from the business without losing money, but didn't make much either. They just realized that they entered the business for the wrong reason...to make money. It was boring for them. If you don't actually enjoy the trading process, then you probably will be bored doing this and should find something that you enjoy doing. Don't do this just for the money!!! If you're a salesman selling widgets and you don't actually enjoy the selling process, you won't make money and if you do, you still won't be happy.

I don't make millions and may not ever and I don't care. I love the trading process. There are times when the market is my full time job, there are times when I'm trading just to supplement another business. I've seen lots of people succeed in this business and I've seen more fail. But the fact of the matter is that from what I've seen, 95% don't fail. I'd say that 80% don't make money and 3-5% max have a sustainable income through trading and the rest can make money MOST of the time, but not consistent enough to quit their day jobs. What separates the 5% from the other 15% that can pull some profits cannot be taught in a course, but has to be learned by the individual by himself.

Keep this in mind, if you wanted to start some sort of business such as a coin operated laundry, car wash, clothing line, etc. would you be going to message boards for advice on how to run the business and make money?
  • #12
  • Feb 11, 2008 8:32am Feb 11, 2008 8:32am
Quoting bronxterp
Keep this in mind, if you wanted to start some sort of business such as a coin operated laundry, car wash, clothing line, etc. would you be going to message boards for advice on how to run the business and make money?
Yes if i was a inexperienced new car washer and there was something i did not find out about my business any other way and there was some message boards with many many thousands of other car washers that many of them probably was far more experienced than me i think it would be a good idea to ask for advice how to fix my problem.

Arctic4x
  • #13
  • Feb 11, 2008 8:40am Feb 11, 2008 8:40am
Quoting bronxterp
As far as elite traders who can actually pull a consistent income out of the market...maybe then we're talking 5%...more likely 1-3%.
Bit off topic, but as I've said before - if you're not going to make more % than "a boring safe" investment" or a mildly leveraged hedge fund or similiar - why spend your own time and nerves on something that doesn't outperform passive investments which will automagically generate money, while you in turn can generate money from another active income parallel?

There should be a reason to everything one does.

Quote
If you don't actually enjoy the trading process, then you probably will be bored doing this and should find something that you enjoy doing. Don't do this just for the money!!!
This doesn't make any sense to me unless you have so much cash and time left over that you can allow it to un-bore you via forex, similiar to other entertaining pastimes such as crash driving expensive cars or buying high end electronic gadgets for which one has no real need

Obviously doing something without vigor and passion is destructive in it's own right; however "trading for fun" when imho it should be treated like a business(which can BE fun, but the goal isn't to have fun) is something for those that can "afford a certain luxury".

Waiting for that perfect setup can be deadly boring yet incredibly profitable; should I keep tossing money on just to keep my kicks on going?
That's where the real traps lie in trading imho. Been there, done that.
Trust price. Know yourself.
  • #14
  • Feb 14, 2008 5:01am Feb 14, 2008 5:01am
Quoting SeekingLight

Obviously doing something without vigor and passion is destructive in it's own right; however "trading for fun" when imho it should be treated like a business(which can BE fun, but the goal isn't to have fun) is something for those that can "afford a certain luxury".

Waiting for that perfect setup can be deadly boring yet incredibly profitable; should I keep tossing money on just to keep my kicks on going?
That's where the real traps lie in trading imho. Been there, done that.
You are corrrect, something where you put your heart and soul into is always nicer to do then something where you have lost your passion.
Anyway if he has the money and if it is his way of learning to trade profitable then it's his choice.
  • #15
  • Feb 14, 2008 5:04am Feb 14, 2008 5:04am
Quoting bronxterp
Where does it say that 95% of forex traders fail? Who came up with this number? Where is it published or documented? Seems like this "fact" floats around quite a bit, but I've never actually seen "proof" that this is the case.
Well, look at this forum, most people join, make a few postss, thinking it's easy, then disappear. Perhaps that tells you something.. As for hard proof, hard to give it really, unless u work for a broker
  • #16
  • Feb 14, 2008 5:30am Feb 14, 2008 5:30am
Quoting peterM
Well, look at this forum, most people join, make a few postss, thinking it's easy, then disappear. Perhaps that tells you something.. As for hard proof, hard to give it really, unless u work for a broker
Well yeah maybe you are right, let's hope I don't end up with that 95%
  • #17
  • Feb 14, 2008 7:37am Feb 14, 2008 7:37am
  •  TrevA
  • | Joined Oct 2007 | Status: my brain has a mind of its own | 166 Posts
Quoting bronxterp
Where does it say that 95% of forex traders fail? Who came up with this number? Where is it published or documented? Seems like this "fact" floats around quite a bit, but I've never actually seen "proof" that this is the case.
I think this is a myth! I was reading Ganns book from 1945 and he quotes a similar number... how this is quantified is a mystery to me. It's probably more qualitative than based on real fact.

TrevA
  • #18
  • Last Post: Feb 18, 2008 6:46am Feb 18, 2008 6:46am
Quoting TrevA
I think this is a myth! I was reading Ganns book from 1945 and he quotes a similar number... how this is quantified is a mystery to me. It's probably more qualitative than based on real fact.

TrevA
It has to be this, unless every broker has a trackrecord of their clients and publish it al together.
But that would be verry unlikely.
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