Real reason why 99% lose - daytrading | Page 4 | Forex Factory

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Real reason why 99% lose - daytrading

  • #61
  • Mar 24, 2018 6:42pm Mar 24, 2018 6:42pm
Dear god, you whoppers are desperate to fool yourselves; undercapitalisation, leading to excessive use of leverage, is one of the prime reasons retail gamblers/traders fail.

As for central banks and the authorities not wanting to kill retail trading, actually many do. Retail FX serves no purpose, it’s viewed as reckless gambling. The money gambled and lost by retail punters would still remain in the banking system, if it wasn’t dumped into the FX market.

Quoting cjjb77
I very much doubt central banks or other financial institutions will try to kill the retail industry since it is well known that institutional traders trade against retail traders so they would have no possible reason to want to kill it. I agree with most of the reasons you explained why most retail traders ultimately lose however being under capitalised is not one of them. At the end of the day, if you cannot trade a USD1,000 account profitably over a period of time (at least a year then having a USD100,000 account will not help. You will ultimately...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #62
  • Mar 24, 2018 7:12pm Mar 24, 2018 7:12pm
Quoting Spreadbetter
A French authority report had losers at 90% and losing on average €8k each inside the six months they traded, my data has it closer to 96%.
Yep. Six months is the average retail account signle top up longetivity. They blow it away for in between 1 day and 365 days, for example.
Quote
But consider this; a series of coin tosses should come out at 50-50%..now then, can you figure out why the loser data is so negatively skewed?
It cannot be because the market is made to benefit the market makers or the house with other words? Gotta be something else then?!?
Maadik Hugiis. IQ 69.
  • #63
  • Mar 24, 2018 10:33pm Mar 24, 2018 10:33pm
Quoting cat
... there are no short cuts. You set yourself up for the long term, or you set yourself up to fail - simple as.
I can think of one short-cut given that statistically 90% of traders are losing ...
(1) Subscribe to those who have TE ...
(2) Go the opposite of their open trades ...

Note: This is not a recommendation ...
Market is not random but unpredictable
  • #64
  • Mar 24, 2018 10:39pm Mar 24, 2018 10:39pm
Quoting 4for4
{quote} I can think of one short-cut given that statistically 90% of traders are losing ... (1) Subscribe to those who have TE ... (2) Go the opposite of their open trades ... Note: This is not a recommendation ...
Haha that might actually work!
But we gotta account for spreads and other costs which may eat up profits. And tracking error too.
I can't find the study now but theres this old study showing that one of the main reason why active investors underperform passive investors is due to all the costs and commissions they rack up.
I look for value wherever it can be found
  • #65
  • Mar 24, 2018 10:43pm Mar 24, 2018 10:43pm
If 99% lose in daytrading than the reason is very obvious - Day Trading is for the losers! I read somewhere average Day Trader earns the minimum wage. Why would anyone do this day in day out I wonder
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  • #66
  • Mar 25, 2018 5:15am Mar 25, 2018 5:15am
It’s several other issues beyond market making; believing in indicators and strategies, lack of capital, leading to margin calls through the use of excessive leverage, not understanding probabilities and risk...

Quoting MoneyZilla
{quote} Yep. Six months is the average retail account signle top up longetivity. They blow it away for in between 1 day and 365 days, for example. {quote} It cannot be because the market is made to benefit the market makers or the house with other words? Gotta be something else then?!?
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #67
  • Edited 6:28am Mar 25, 2018 5:43am | Edited 6:28am
Quoting Spreadbetter
Nope, it’s closer to 70% losing, but you have to take on board how that data can be twisted, for example, that might be the actual losing bets, but the amount of losing traders might be much higher. A French authority report had losers at 90% and losing on average €8k each inside the six months they traded, my data has it closer to 96%. But consider this; a series of coin tosses should come out at 50-50%..now then, can you figure out why the loser data is so negatively skewed? {quote}
Coin toss is 50%-50% -
price 100 - watch sell price of currency 50 pips DOWN is 50, buy BUY price is 52 - reduced payout by 2 pips
price 100 - watch sell price of currency 50 pips UP- BUY price is 152 - increased loss by 2 pips
In 100 trades - 50 positive (with reduced payout of 2 pips),
50 negative (with increased loss of 2 pips)

Psichology makes people thing it is equal 50 pips down 50 pips up but in reality it is 48% - 48%.

But in reality using 200 leverage, to take position 0.01 lot you need 6$ so 2 pips vigorish is 0.20$.

where we get odds of 3.33% vigorish on trade.
On roulette vigorish is 2.70% - money last more on roulette then on forex but eventualy lose

Solution to problem is buy and hold strategy long term 1 trade. Does it work? ask warren buffet


this is buy doing 50 pips with stop loss 50 pips (since 01.01.2015)
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this is sell doing 50 pips with stop loss 50 pips on same prices (01.01.2015)
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Click to Enlarge Name: 50-50 sell.JPG Size: 39 KB

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Click to Enlarge Name: sell stats.JPG Size: 48 KB


We see expected payout is allmoust same 0.30 pet trade on buy and sell in series of over 1000 trades average. Profit trades decresed , loss trades increased so 50-50% is not 50-50 as majority daytraders belive.

But what if we use long term strategy and compound profit during long term trends since 01.01.2015?
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But what if we reduce strategy to buy and hold warren buffet style?
  • #68
  • Mar 25, 2018 5:55am Mar 25, 2018 5:55am
The only long term study done on daytrading was carried out over a 15 year period in asia, it found that around 95% of people lost after one year, after 3 years this number increased to about 98%+ of traders and after 5years the failure rate was 99.7%.
I think its fair to say that if you are going to daytrade and expect to be profitable over a 5 year period or longer the odds are a tad against you.
  • #69
  • Mar 25, 2018 7:50am Mar 25, 2018 7:50am
Quoting synicz
{quote} Haha that might actually work! But we gotta account for spreads and other costs which may eat up profits. And tracking error too. I can't find the study now but theres this old study showing that one of the main reason why active investors underperform passive investors is due to all the costs and commissions they rack up.
The spread eats up profit no matter the style of trading you are using. Daytraders lose and so does everyone. Treating forex like a 9 to 5 is the only way to profit in the short and long term. Someone even pointed out that time is objective and that is a very valid point which makes this thread pretty pointless. As DaQueen I crown the O.P. Of this thread as Sir. ShowUsYourProfit
Hail me for arth thou DaQueen
  • #70
  • Mar 25, 2018 7:53am Mar 25, 2018 7:53am
Quoting cat
{quote} It is not a system that makes a trader, it is the trader. If you believe you have found a system no one else knows or is using, then you are in cloud cuckoo land. Therefore it would not make the slightest bit of difference if you did share your system in detail, as no one would be able to pick it up and use it as you do. If they are relatively inexperienced traders, then they will fail whatever system they have, and if they are experienced with sufficient knowledge of the markets then they will not need any system of yours or anyone else's...
Well typed Cat. As the queen I crown you as Sir. MasterBigCat
Hail me for arth thou DaQueen
  • #71
  • Mar 25, 2018 7:55am Mar 25, 2018 7:55am
Quoting IenDzi
I can think only 2 reasons: 1. if you don't have an edge, you'll lose because of spread. 2. if you have an edge, you can lose because of drawdown(over risking).
Very good point. One might have an edge and overrisk basedon their trade plan because of the time it has taken to hit their tp. I think if we focus more on price instead of time then it will greatly change the way we see the market.
Hail me for arth thou DaQueen
  • #72
  • Mar 25, 2018 10:19am Mar 25, 2018 10:19am
I recognise daytraders in numeros lectures like Reward Processing in Motivational and Affective Brain Disorders.
Drugs and the Brain complex expecting reward fast - Dopamine and Its Rewards.
Although reward probability is an important factor that shapes animal behavior, it is not well understood however, how the human brain translates reward expectation into fast reward today not long term. Also fast is good "100 $ money now/today" while "wait next year and get double" isn't for majoriity.

Average trader brain and eyes reacts to 3rd and 4th digit, fast trends, fast money, fast moving car, man running fast in center of city, but doesn react to slow moving boring 1st and 2nd digit in forex price which moved 1500 pips, slow moving cars during long hours/day/months and daytrading combine fast with reward with decision making - it translate from study to disorder which need tretman.

Combining daytrader with wigorish 3.33% on 3rd and 4th digit of price with daily chasing money and no long term perspective = 99.99% losers.
  • #73
  • Mar 25, 2018 10:27am Mar 25, 2018 10:27am
Er, whatever. Fact remains; according to French authorities 90% of FX/CFD traders lose on average €8k before giving up gambling on the markets. My research suggests it’s up to 96%. The 50-50 coin toss subtle reference I provided, obviously went right over your head.

Quoting igorc
{quote} Coin toss is 50%-50% - price 100 - watch sell price of currency 50 pips DOWN is 50, buy BUY price is 52 - reduced payout by 2 pips price 100 - watch sell price of currency 50 pips UP- BUY price is 152 - increased loss by 2 pips In 100 trades - 50 positive (with reduced payout of 2 pips), 50 negative (with increased loss of 2 pips) Psichology makes people thing it is equal 50 pips down 50 pips up but in reality it is 48% - 48%. But in reality using 200 leverage, to take position 0.01 lot you need 6$ so 2 pips vigorish is 0.20$. where we get...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #74
  • Mar 25, 2018 10:38am Mar 25, 2018 10:38am
Quoting igorc
I recognise daytraders in numeros lectures like Reward Processing in Motivational and Affective Brain Disorders. Drugs and the Brain complex expecting reward fast - Dopamine and Its Rewards. Although reward probability is an important factor that shapes animal behavior, it is not well understood however, how the human brain translates reward expectation into fast reward today not long term. Also fast is good "100 $ money now/today" while "wait next year and get double" isn't for majoriity. Average trader brain and eyes reacts to 3rd and 4th digit,...
Yeah. Massively agree that humans have this want for instant gratification. I also do agree its what drives most of us in search of short-term strategies. We simply dont like to wait!
I look for value wherever it can be found
  • #75
  • Mar 25, 2018 10:51am Mar 25, 2018 10:51am
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  • #76
  • Mar 25, 2018 11:00am Mar 25, 2018 11:00am
Quoting Spreadbetter
Dear god, you whoppers are desperate to fool yourselves; undercapitalisation, leading to excessive use of leverage, is one of the prime reasons retail gamblers/traders fail. As for central banks and the authorities not wanting to kill retail trading, actually many do. Retail FX serves no purpose, it’s viewed as reckless gambling. The money gambled and lost by retail punters would still remain in the banking system, if it wasn’t dumped into the FX market. {quote}
Well if you're talking about pure gamblers and the 'get rich quick crowd' as opposed to traders making educated bets on high probability set-ups with a proper money management system, then I can see how they could fall into the trap of using excessive leverage. Such an approach however shows a clear lack of risk management, which I am sure most traders would agree is crucial to their longevity. Excessive leverage would likely take you beyond the 1-3% risk per trade I had mentioned in my post.

Actually, retail FX does serve some purpose since institutions scan retail trading accounts to find any hidden talent which may exist. I personally know several institutional traders including one hedge fund manager who began their trading careers in the retail market prior to being 'discovered'.
  • #77
  • Mar 25, 2018 11:32am Mar 25, 2018 11:32am
Quoting TGS
{quote} It's not that one, it's just 1 post about one way of using a common indicator. It has very good accuracy when back tested, I'll be forward testing it this week.
which post is it ?
  • #78
  • Mar 25, 2018 12:42pm Mar 25, 2018 12:42pm
Quoting igorc
{quote} Coin toss is 50%-50% - price 100 - watch sell price of currency 50 pips DOWN is 50, buy BUY price is 52 - reduced payout by 2 pips price 100 - watch sell price of currency 50 pips UP- BUY price is 152 - increased loss by 2 pips In 100 trades - 50 positive (with reduced payout of 2 pips), 50 negative (with increased loss of 2 pips) Psichology makes people thing it is equal 50 pips down 50 pips up but in reality it is 48% - 48%. But in reality using 200 leverage, to take position 0.01 lot you need 6$ so 2 pips vigorish is 0.20$. where we get...
Cannot be bothered reading through all the usual crap regurgitated on here but if you think entering a trade is a 50 50 bet then give up now.
If you buy resistance and sell support the vast majority of those trades lose it usually reverses first before breaking through.
If you don't understand how that relates to your 50 50 then definitely give up now.
Please don't expect me to respond again to you I have already wasted enough time.
The greatest enemy of a good plan is the dream of a perfect plan.
  • #79
  • Mar 25, 2018 1:32pm Mar 25, 2018 1:32pm
No they don't, they really don't, you're fantasising and you're delusional. Stop it with the lies.

Quoting cjjb77
{quote} Actually, retail FX does serve some purpose since institutions scan retail trading accounts to find any hidden talent which may exist. I personally know several institutional traders including one hedge fund manager who began their trading careers in the retail market prior to being 'discovered'.
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #80
  • Mar 25, 2018 1:36pm Mar 25, 2018 1:36pm
Quoting PayTheLimit
Turns out the secret is night trading....
Whose night?
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