I was mentored by a retired forex broker. They call it the "Ninety Ninety Ninety Rule" (90-90-90 Rule); 90% of all retail traders are guaranteed to lose 90% of their account balance within 90 days. Primarily because retail traders (generally described as individuals with less than a $500,000 trading account whom only trade for personal financial gain) lack the transparency that the broker has over the average individual (Institutional traders).
The broker can see and organize every active retail trader into two books - buyers and sellers. There is a massive conflict of interest which arises as a result between retail traders and brokers. Why? Simply because when you buy, the broker sells to you and now he's committed to the opposite end of your trade (and the opposite for when you sell).
With the advantage of being able to see exactly where everyone has placed their trades, they have tools in place to help them mitigate risk. In a decentralized market, you have never and will never trade on the same level as the interbank market, but rather you trade on a simulated version of that market, provided by the broker, or their affiliates. Remember what i said about the conflict of interest? Well, they aren't here to pass out money. There are techniques the broker or their liquidity providers employ in order to induce the most traders in the wrong direction at the worst possible time, and subsequently jerk the price against the higher volume of retail buyers or sellers - thus maximizing profits. It's a cycle which has its variations, but enables the broker/liquidity provider to make millions and dare I say even billions of dollars - in a matter of months.
I learned their style over the course of 3 years.
100% of traders lose money. But 90% of all retail traders are guaranteed to lose 90% of their account balance within 90 days.
The broker can see and organize every active retail trader into two books - buyers and sellers. There is a massive conflict of interest which arises as a result between retail traders and brokers. Why? Simply because when you buy, the broker sells to you and now he's committed to the opposite end of your trade (and the opposite for when you sell).
With the advantage of being able to see exactly where everyone has placed their trades, they have tools in place to help them mitigate risk. In a decentralized market, you have never and will never trade on the same level as the interbank market, but rather you trade on a simulated version of that market, provided by the broker, or their affiliates. Remember what i said about the conflict of interest? Well, they aren't here to pass out money. There are techniques the broker or their liquidity providers employ in order to induce the most traders in the wrong direction at the worst possible time, and subsequently jerk the price against the higher volume of retail buyers or sellers - thus maximizing profits. It's a cycle which has its variations, but enables the broker/liquidity provider to make millions and dare I say even billions of dollars - in a matter of months.
I learned their style over the course of 3 years.
100% of traders lose money. But 90% of all retail traders are guaranteed to lose 90% of their account balance within 90 days.
Discouragement is the language of the devil. Results over hype.
