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New study shows only 1% of traders are consistently successful

  • #41
  • Mar 31, 2010 3:45am Mar 31, 2010 3:45am
Quoting Topgun_1
only 1% of traders are regularly profitable.
This number does not mean anything if the many-worlds-interpretation of quantum mechanics is true.
  • #42
  • Mar 31, 2010 4:50am Mar 31, 2010 4:50am
Quoting HiddenGap

Trader Joe summed up his first lesson like this; " I am less concerned with the return ON capital and more with the return OF capital".
Great quote!

Not sure I agree with the 'winners take care of themselves' sentiment though. Sure, you consider and manage risk first before thinking about reward, that becomes second nature, a given if you like, but managing risk is not going to produce results on it's own.
  • #43
  • Mar 31, 2010 4:54am Mar 31, 2010 4:54am
the number for successful retail forex traders is much less than 1%. I have heard of a broker quoting a 99.8% failure rate and I have no reason to believe that is not accurate across the board. These are the odds you are up against. You must perform at an elite level to win, like an olympic athlete, years of work and training is pre requisite to beat those odds. If you are not up for that kind of sacrifice you will be in the 99.8% group for sure. You could excel in many other fields with half the effort required for successful trading. People here can deny this all they like but no one here can refute this truth with a verified account statement to back up there claim.
BTC Return This Year: na
  • #44
  • Mar 31, 2010 5:47am Mar 31, 2010 5:47am
market-makers, conflict of interest, bucket-shops, stop-hunting, requotes, price-manupulation, platform crashing/freezing, TPs not filled, 95% must lose, and now even 99% instead of 95, there will always be good excuses to blame the own failures on.

If all the above could be proven wrong then you all would immediately start searching for new excuses.

Why not simply start trading profitably instead?

The 99% number clearly states that there must be an incredibly reliable system to move money from A to B in this business and this can not be explained with spread and commission only.
  • #45
  • Mar 31, 2010 6:15am Mar 31, 2010 6:15am
Quoting 7bit
market-makers, conflict of interest, bucket-shops, stop-hunting, requotes, price-manupulation, platform crashing/freezing, TPs not filled, 95% must lose, and now even 99% instead of 95, there will always be good excuses to blame the own failures on.

If all the above could be proven wrong then you all would immediately start searching for new excuses.
With all due respect, I think the number of traders who look to shift blame to the items you list are miniscule. I also don't think traders generally are looking for or prone to offering up excuses.

Trading is a very private occupation that takes you to the depths of your own soul at times. You meet with yourself there in the most confronting of ways. The bulk of traders, imo, are very acutely aware that their performance is their own responsibility.
  • #46
  • Mar 31, 2010 6:27am Mar 31, 2010 6:27am
95% or 99%....it makes no difference.

how do they lose ? when ? always or just at the beginning ?
does this mean that once you lose your account you stop trying ? does it mean you will be classified as a loser trader ? statistics are just statistics. they hold a truth but do not tell the whole truth. who says that the same first time loser does not win in the end ?

i would understand better if the quote was "99% of traders blow out their account within 90 days" this would make more sense (i did it myself and only took 21 days ). i learnt by blowing out small accounts (max $500) once, twice, three times....who cares ? i don't consider myself part of that 99%.

it was just the cost of starting up a business.
The quality of your life is brought about by the quality of your thinking.
  • #47
  • Mar 31, 2010 6:33am Mar 31, 2010 6:33am
Quoting hornet
95% or 99%....it makes no difference.

how do they lose ? when ? always or just at the beginning ?
does this mean that once you lose your account you stop trying ? does it mean you will be classified as a loser trader ? statistics are just statistics. they hold a truth but do not tell the whole truth. who says that the same first time loser does not win in the end ?

i would understand better if the quote was "99% of traders blow out their account within 90 days" this would make more sense (i did it myself and only took 21 days ). i learnt...
while you're at it, remember to buy/sell any signal or tips NY times give u. newspapers report crap and they have nothing worth reading. i would prefer the number to be as high as possible. 99.999% would be good. financial markets are nothing but equity transfer from the unlearned to the learned traders. the more losers there are out there the richer i get.
  • #48
  • Mar 31, 2010 6:48am Mar 31, 2010 6:48am
Quoting yunielescaz
while you're at it, remember to buy/sell any signal or tips NY times give u. newspapers report crap and they have nothing worth reading. i would prefer the number to be as high as possible. 99.999% would be good. financial markets are nothing but equity transfer from the unlearned to the learned traders. the more losers there are out there the richer i get.
or what about people following other's methods. "gurus" selling you crap at the price of gold. then add the lure of getting rich quickly....perfect combination for failure
The quality of your life is brought about by the quality of your thinking.
  • #49
  • Mar 31, 2010 6:49am Mar 31, 2010 6:49am
note what he says to do with the hot news flash

Inserted Video
  • #50
  • Mar 31, 2010 7:40am Mar 31, 2010 7:40am
Quoting fxswing
"Using account data for over 60,000 households from a large discount brokerage firm, we analyze the common stock investment performance of individual investors from February 1991 through December 1996"
Come on be serious, this is an outdated study !!!..
Quoting Jade Gate
It may help to get a grip of the facts in the story posted. ..
There is however, (to my knowledge) no body of sound research on the subject of forex profitability.....
indeed, very few noticed.

in page 2, the article says
Quote
Exactly how far is clear from one of the most comprehensive looks at the subject in a yet-to-be-published study conducted in Taiwan. (The country is ideal for this kind of research because all trades go through one place, the Taiwan Stock Exchange, which is willing to share the information.) The authors sifted through tens of millions of trades, from 1992 to 2006, and found that 80 percent of active traders lost money.
“More importantly, we found that if you were to look at the past performance of these traders, only 1 percent...
  • #51
  • Mar 31, 2010 7:46am Mar 31, 2010 7:46am
Damn, so when is it can I earn $100 a day all the while sitting in front of the computer in the comfort of my room and nobody tells me what time I should wak up, breakfast, lunch, and return home?
  • #52
  • Mar 31, 2010 7:54am Mar 31, 2010 7:54am
to win in forex you have to beat 2 opposing forces who act simultaneously
1. you must beat THE MARKET - be better than roughly the best 1% of traders in the world who trade in that moment - (reread last sentence and think again at it )
2. beat the broker who intermediates you online - who will do anything to be in advantage over your trade, putting orders aside and other dozen operations including takeing your stoploss orders if he can afford THE VOLUME of your trades)

well, 99% of traders fail to overcome both of these two forces and that is completely normal , only 1% are successfull is the true number gentlemen.
The risk is what gives value to an investment.
  • #53
  • Mar 31, 2010 8:07am Mar 31, 2010 8:07am
Quoting 3cent
well, 99% of traders fail to overcome both of these two forces and that is completely normal , only 1% are successfull is the true number gentlemen.
which i don't have a problem with.
only 1% of aspiring sportmen become professional
only 1% of aspiring actors make it to hollywood
only 1% of apsiring ............ are successful

it is not the % that bothers me, it is how this % gets marketed to the masses. it is some sort of reverse marketing, sort of challenging you to see if you can be better.....it is all a psychological game.

i believe 99% of traders blow out their accounts at least once, 99% of novice traders lose, yes i agree with that.

this is all a zero sum game. for every loser there is a winner on the other side, somewhere in the world
The quality of your life is brought about by the quality of your thinking.
  • #54
  • Mar 31, 2010 10:14am Mar 31, 2010 10:14am
Quoting Jade Gate
I think the number of traders who look to shift blame to the items you list are miniscule.
My latest study shows that the majority of losing trader blame it on external reasons and the rest is blaming it on the fact that due to the 95% (or now 99%) chance of losing it is completely normal to lose and nothing to worry about.
  • #55
  • Edited 12:59pm Mar 31, 2010 12:36pm | Edited 12:59pm
Quoting M.A.C.Doug
the number for successful retail forex traders is much less than 1%. I have heard of a broker quoting a 99.8% failure rate and I have no reason to believe that is not accurate across the board. These are the odds you are up against. You must perform at an elite level to win, like an olympic athlete,...
I have no data that either supports or refutes your claim, but I would say that if only 1 trader in 500 is successful, then a perfectly reasonable assumption could be that 1 in 500 have been able to sustain a run of luck for a decent length of time.

As a possible example: Martingale-type MM will inevitably fail in the long term, but it can allow a trader's account to keep growing until the 'death trade' causes irretrievable drawdown. With a lucky few, that could potentially take a VERY long time. One can easily run a Martingale without any trading skill or market knowledge.

With me, all of this would raise questions like:
-- How long does one have to remain in profit to consider oneself successful?
-- Or more broadly, how does one define success?
-- If we take the position that trading is more than mere luck, is it possible for an approach that's worked profitably for many years, to lose its effectiveness?
-- If success is a subjective measure, does quoting a X% failure rate have any real meaning?
________________

Now for a completely different angle.......

Apart from broker manipulation, the odds against the trader are "50/50 + spread", and if one takes only trades offering positive swap, and holds them for long enough for the swap to exceed the spread (generally only a few days), one has positive expectancy by merely making random entries and exits. Admittedly that's only theory, but it's mathematically sound.

On top of that, one can be as fastidious as one wishes, in choosing which setups to trade. To those who say that entry offers no better probability than 50/50, why do you bother with price charts?

If entries can offer some kind of directional bias, that's an edge.

If cutting losses quickly and letting profits run can improve winning expectancy, there's another edge. If emotions are a problem, walk away and have an EA manage your exits.

So c'mon folks, how difficult can profitable trading be?
________________

One trader's performance has absolutely no bearing on another's, and along with the fact that it's possible to infer almost anything from the types of statements made in threads such as these, renders them of very little value, IMHO.
  • #56
  • Mar 31, 2010 1:46pm Mar 31, 2010 1:46pm
Ah, another "Can I really be succesful in Forex" thread. A few things to ponder:

1. Random entry forex has negative expectancy due to the spread.

2. If you could recover your spread + 1 pip on every trade you could kiss your day job good bye!

3. Forex pricing as experienced by the small, retail trader, on a DAY TRADING basis, is random.

4. If you daytrade the retail forex market for a long enough period of time, you will lose all of your invested funds. It may take only a few days, or it may take a few years. Your balance will probably fluctuate up and down. But, in the end, the game you play has negative expectancy. If you play long enough, you will lose.

5. You anger towards me is rising, because you dislike #4. You work hard, study, read your charts, and neglect your personal life. You can beat this thing. But you are playing a negative expecatancy game. You may well win in the short run and experience some profits. Just give it time and you will give it all back. All you can control is your entry and exit. When you enter at a given price you have NO CONTROL over where price is going. You have no way to know if price will stop at this fib, or that channel, or EW, or whatever.

Hope this helps some people. No need to post hateful responses. If you disagree, then continue to enjoy daytrading retail forex. It is a thrilling ride with a lot of ups and downs. To bad it will leave you poorer for the ride!

Regards,
  • #57
  • Mar 31, 2010 1:53pm Mar 31, 2010 1:53pm
Ok, here is how I see it:

I should not even write this because I sincerely believe that most posters in here (or elsewhere in other forums for that matter) are wasting time with topics like these:

95% are losers

is this system profitable

new 300% EA

50 pips candle system

etc., etc.,...

and by doing so ultimately end up in the elusive and largely outperforming group of losing traders.

Some will probably jump on me, accusing me of spreading bad vibes in the community or something similar. I can live with it, so feel free if you must.

What I can say though - and what is more to the point - is this:

I can take any amount of money and return an average 20% net p.a. with a maximum DD of 6% - I have done so for the past 2 decades. I have never in my learning years spent a single minute in a forum (besides, they did not exist as such when I started and I still would have stayed away).

Some might say that an avg. 1.5% per month is a lousy return - but if the capital is $20m and more, its a decent living I'd say.

I came to FF once to help a little - mainly with the problem of under-capitalization, from which the elusive +95% suffer most.

Maybe I belong to the 1% - maybe the study is completely irrelevant to anyone who might read it (or this discussion about it). I know consistent profitability is possible - not remotely but quite easy if the rules of the game are known and respected. As long as I am not bored with trading, I will keep being profitable in the same old way - provided the free markets stay accessible.

My guess is the 3500 traders logged on in here on average, contain a good amount of people with real potential - that potential unfortunately gets wasted by mixing with the others who think they now - but actually don't.

Believe me when I say that I have had altercations with the odd one - after which I had to admit to myself that it has neither helped me nor the other side in any way but to waste both our time.

Trading success does not come from in here - It can't be found in here - despite a great belief to the contrary by many. Yes - there are some attempts visible but the real talent finding such needles in the haystack...ultra low probability.

For everyone who can read between the lines - and does not automatically develop a feeling of personal annoyance when going through this - I have one single bit of advice:

TIME: the most and least important part in life.

With sincere wishes.

H. Rearden

P.S. for serious readers: 'The Time Paradox' by P. Zimbardo
  • #58
  • Mar 31, 2010 2:04pm Mar 31, 2010 2:04pm
Dieting has a "negative expectancy". Only 95% are successful at it (according to stats).
Just human nature I guess. So maybe forex isn't that much harder than dieting?
  • #59
  • Mar 31, 2010 2:13pm Mar 31, 2010 2:13pm
Quoting H. Rearden
P.S. for serious readers: 'The Time Paradox' by P. Zimbardo
Thanks for the reading recommendation. I see that my library has a copy.

I really don't mind the work involved in trading - I find it quite a bit of fun.
But, OMG I've never encountered anything that consumed time like it does.
Not a small problem.
  • #60
  • Mar 31, 2010 8:18pm Mar 31, 2010 8:18pm
[quote=H. Rearden;3600657]Ok, here is how I see it:

Some might say that an avg. 1.5% per month is a lousy return - but if the capital is $20m and more, its a decent living I'd say.


H. Rearden

]

Really the capital is $20m?
Are u interested with system with minimal drawdown and 10% per month.

If I have capital of $20m, yes, 1.5% per month is enough but yes, it is lousy return. If you would like to try out my system.
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