The 5% success myth busted by CFTC

I think the 5% means long term.

Exactly. I think people want to know so if it is indeed only 5% and they are profitable that they can pat themselves on the back because they are beating 95% of the traders out there. And if they're losing, they can justify it by saying that 95% lose anyway so it no big deal. People feel the need to compare themselves to everyone else. Their houses, cars, spouses, kid's accomplishments, if they still have hair, clothes, etc. When none of that actually matters. What everyone else is doing means nothing cause all that matters is that you are happy with what you are doing.

Unless you know the accounting method that was used to calculate these statistics, the numbers are meaningless.

Let's say all break even accounts were divided and applied equally to both categories, or breakeven and above are applied to the profitable traders category. No one knows. Either Oanda used a different accounting method than the mean, or they may have a larger proportion of dormant accounts.

Also, a monthly figure can skew the statistics simply because the turnover of losing traders every month can be much higher than the number of winning traders month to month. So if you have a large number of traders trying their hand at Forex each month and failing, the cumulative total of losing traders would be much higher in a yearly statistic.

lol.

In one of these Bucket shops, i know the director Marketing and as per him these figures were shown to be attractive to attract more traders so as to eventually take their money as well.

These Bucket shops will be billions dollar fortune 2000 companies in the coming decades.

With internet and mobile trading, 95-99% of traders will give their capital to these bucket shops making them new innovative companies in 21st century.

Price goes up and price goes down- This is the recipe for disaster (without proper training of course)

Welcome to the world of scam.

Good post. As you say, a losing account is far more likely to be closed out, so we may have the same 30% winners with a different group of 70% losers each time. Now that's a little extreme, but it shows how misleading those figures appear.

Does it say 30% accounts are in profit, or 30% of accounts were profitable over the period? Big difference.

It doesn't mention how profitable. The majority of the profitable traders may only be scraping by. This would be completely reasonable given the distribution of performance in competitive environments.

There is also no consideration of positive variance.

Anyway, arguing over the figure of how many are profitable isn't useful; to trade effectively we need to trade well enough to make a living. This figure is surely going to be far lower than those who can manage profitability.

You people need to cut on the wishful thinking and have some commonsense.

I am sure that the percentage of people who actually live off of forex trading is even smaller than 5%.

But when we talk about the number of profitable accounts within a bröker over a period of time, you would have about 30/40% as a mean (average) depending on the "house edge" (the bröker's spreads/commissions). The higher the house edge, the lower the mean. In a hypothetical bröker with 0 spreads and commissions, you'd have about 50% as a mean (allowing for deviations of course) for such statistic.

But if you try to isolate the traders that have a real edge and win in the long run, it would be a very small percentage. You can't have 25 or 30% of market participants as consistent winners, because it's impossible. This is a zero sum game.

whats all this about Capture The Flag?