forex why traders lose

Spread decide how much trader lose over 10000 trades no matter strategy used
Mathematically formula for 10 pips profit, 10 pips stop loss.
1-10/(10+10)=0.50
In 10000 trades there will be 5000 wins and 5000 stop loss hit.

profit = 5000*1$ profit - spread 1 pips*5000 trades = 45000$
loss= -5000*1$ + spread 1 pips*5000 trades = - 55000$

profit - loss = -10000$

for traders loss will be always higher then profit.

Cut loses let profit run do not work (stop loss 10 pips profit 100 pips)- mathematically 1-10/(10+100)= 0.90
stop loss will be hit 90% trades or 900 times in 10000 trades. 100 pips profit will be hit 10% or 100 times in 10000 trades and spread destroys all profit.

Martingale do not work - mathematicaly in 10.000 trades there will be 13 progression (10000*0.50*0.50...)to double money (from 0.01 to 40.96 lots) In 100000 trades there will be 16 progression (from 0.01 to 327 lots). In 1000000000 trades there will be 29 progressions to double money (from 0.01 to 2684355 lots). 29 progression can come any day to blow up bank (it doesnt count from today when progression will come and ea are unpractical)



in roullete is same situation spread eats all profit, in sports betting (adrian massey website has data on horse racing spread 10% )spread eats all profit no matter strategy, teams or combination. so trader can calculate how much is loss connected to number of trades.

only way to beat roullete is to find over long series of numbers number (months) which repeats more often then 1 in 36 and to play that number constantly.

In forex to beat spread need to find more sell orders then buy orders over long period of time (month) to overcome spread. shorth term will not apply.

In gold chart price moved up from 1204.53 to 1290.10 ot 876 pips up in 24 days. means more buy orders then sell order for long term success to overcome spread.

You are talking about overall market trend, that’s really great! By the way, how do you select entry and exit points in your strategy?

Gold will go up until resistance and there will be more sell orders then buy orders at least 200 pips for confirmation and enter and will last until next resistance, probably 20 days.

If that were true, a trader with an edge would be no more likely to make any profits than one without an edge, entering trades entirely randomly.

Since that's demonstrably not so, your assertion is incorrect.

Most people who lose money trading forex don't have a genuine, proven edge at all, and that's the primary reason for their gradual losses. The mechanism by which they gradually lose money has a lot to do with what you've said above about dealing costs, it's true.

But don't imagine that that's a factor which affects everyone equally, or that it's one which makes everybody eventually lose. That's delusional.

You've identified something that has a grain of truth in it, and mistakenly assumed that it's "most of the story".

This is forex broker 12 month period every trade. Edge is for broker as mathematics said more lose trades then winning trades. In forbes billionaire list there is no casino winners just casino owners and bookie owners mathematic edge works for them. Sure there will be edge if you know in advance which team gonna win tommorow but for 99,99% who dont own information picture tells all.



Only way to beat roullette/bookie/ forex spread is in post, know advance over long period of time where price will go.

Main reason: stop runs.

main reason ; no edge

This bar chart shows the opposite of your conclusion. If you were right that only the fees makes you lose then the average gain and loss should be approximately equal up to the trading fees. The bar chart shows that the average gain is much smaller than the average loss. The retailers let the losers run and add to the losers. This chart shows the average pips gain/loss not the number of trades as you wrote. Usually the winrate is above 50%. You can also check that retailers trade in the direction of the overall trend (IIRW in hindsight more than 65% retailers went in the correct direction). Yet they lose. That's simply because they are happy grabbing 20 pips here and there in a 800 pip trend...
Worse: they believe they have one.

LOL. As per usual your economical use of words provides the killer punch. That's the succinct elegance of mathematics talking. :-)

So what made so many traders believe drawing horizontal and angled lines on their charts giving them fancy names support and resistance or supply and demand that they become one, watching jap candles form give them an edge over the market ?

Why forex traders lose : loss of sanity

Your hypothesis is that forex is a random walk as well. But it isn't. Supply and demand determines the price. But an average retail trader has very little information about these forces, and/or hasn't got enough resource (knowledge, time, research arsenal) to find semipermanent patterns. Most of the retail traders trade by experience, by feeling. So they lose. And this can't be explained by your probability model alone. Yes, everybody has to pay the spread, but they lose more rapidly, because forex isn't random.

On account loss is equal to profit without using stop loss and take profit on ecn broker (102$ profit 50% of trades and 100$ loss 50% of trades) buy only in case when remove spread/commision but spread adds to losses and substract to winners making 80$ profit and 120$ loss and it is on every account. It is 50% 50% profit/loss without spread.