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95% traders go broke, only 5% survive

  • #81
  • Jun 28, 2013 8:06am Jun 28, 2013 8:06am
btw, let's not forget that this is another one of those statistical tactics deployed to possibly improve the numbers. i believe i read this a while back in a beginner's guide to forex trading book. basically the idea lies within how do you define 'profitability'? let's say you had a really rough month and got hit with several losses and finally recovered the last day of the month with a slight gain of a few cents..or maybe a few dollars, are you and would you be considered profitable with such a small gain? or would you consider it more along the lines of breaking even? of course, this becomes another gray area in terms of what is defined as breaking even and when is it considered a real gain/ return on investment? and so, if the majority of the so called profitable traders are really just barely scraping to get by, then should they really contribute to the overall profitable traders?

now, would these figures change if we were to find the average return of all the traders? also, what if we were to categorize the winners:losers by account size such as small time or first time traders with accounts less than $5,000 and then moderate size traders of $5000 to maybe $50,000 and then big timers with $50,000+? chances are the ones with the bigger account sizes will do better. (don't bother correcting me on the figures, just an example, if you want them to be realistic, then just replace my numbers with one in your head).

of course, for what i said above, is it completely true or completely false? like i said, it's more of a gray area where no one really knows.
  • #82
  • Jun 29, 2013 1:27am Jun 29, 2013 1:27am
There's no way to go broke if you trade small size and aim for the pips instead of $ or % equity change.

For example 14,211 pips = 6.3% of equity or 1 pip = 0.0004433%

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  • #83
  • Jun 29, 2013 3:06am Jun 29, 2013 3:06am
Quoting Ken A
There's no way to go broke if you trade small size and aim for the pips instead of $ or % equity change. For example 14,211 pips = 6.3% of equity or 1 pip = 0.0004433% {image}
That's incredibly low leverage. Wow! Unless thats 1421 pips not 14211

I bet the confidence you have in the trades you take is incredibly high.


or wait, who's explorer is that?
Be hopeful in a winning position, and fearful in a losing position.
  • #84
  • Jun 29, 2013 3:08am Jun 29, 2013 3:08am
Quoting brendad
{quote} Agree with you mate. When losing, people try to justify themselves by saying this.


sore losers are everywhere in this world, also lazy people who are not willing to put the chart work and long hours in

but most important of all traits to have might be patience... most people think any legitimate money making businesses are get rich quick schemes... they aren't willing to put the work in

network marketing and forex is where i see this most... people don't make the big money they want to make in the first few months doing it... and they quit and say its a scam

its literally incredible to call forex a scam
when its the greatest financial opportunity anyone could ever have.

ive heard it before.. sore losers saying that price is "manipulated"... like their data feed is fake or something... just incredible
Be hopeful in a winning position, and fearful in a losing position.
  • #85
  • Jun 29, 2013 11:39am Jun 29, 2013 11:39am
Quoting Exodus
Having spent most of last year being unprofitable I have so far had one quarter profitable this year. The current quarter is continuing in that vein - leaving me plenty of time to screw it up. ....
I now have 2 quarters profitable. June was somewhat anaemic but if I close all my positions now I will still be in profit for Q2.
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #86
  • Jun 29, 2013 1:19pm Jun 29, 2013 1:19pm
Quoting Ken A
There's no way to go broke if you trade small size and aim for the pips instead of $ or % equity change. For example 14,211 pips = 6.3% of equity or 1 pip = 0.0004433% {image}

I also don't know how you worked out that sum but I do agree with you 100% about going for pips and not $ equity

I've pointed it out on my own thread and in practice it works. It's also psychological - one is far more likely to leave a low leveraged trade open for long periods - not worry about it so much because the risk is so low. The result is many more pips and a slow but measured increase in account balance.

My point is that for any newbie - in fact anyone who is only trading with a small account balance, you should only trade a micro account (trade micro-lots)
  • #87
  • Jun 29, 2013 1:24pm Jun 29, 2013 1:24pm
I would also say that it's FAR better to open five .02 (20 cents a pip) trades then one .10 (1 dollar a pip) of course spread across five different pairs - like having a well balance investment portfolio - if one or two are losses but three are gains - you're still ahead. Even if it's the opposite, the loss is so much smaller!
  • #88
  • Jun 29, 2013 2:19pm Jun 29, 2013 2:19pm
Quoting Rag2RichesFX
problem i see with most traders is they use too tight of stop losses at the wrong time.. let your trade breath and you will win its almost guaranteed

but then again we would not have any huge winners that would make our account actually grow if we let our stops too loose...
  • #89
  • Jun 29, 2013 5:20pm Jun 29, 2013 5:20pm
I'll be frank. Most of you guys OVERtrade! This is what is killing your accounts. Very, very few have the patience to wait for the most favorable opportunities that come along maybe once a month, maybe once or twice in a quarter...if you're following over 25 pairs...

Some think that by scalping every day of the trading week they will be able to "make a living". You mind as well go and play slot machines!
This is the same as with gambling in sports, you put all the money on a "sure thing" that comes along once or twice a year, from an inside tip or so on. It's the only way for a trader to get rich, and I'm sorry to burst your bubble like this, but it's the ultimate truth. And If you don't trust me,at least trust the numbers you see in your accounts.
  • #90
  • Jun 30, 2013 1:16am Jun 30, 2013 1:16am
Quoting backinblackl
I'll be frank. Most of you guys OVERtrade! This is what is killing your accounts. Very, very few have the patience to wait for the most favorable opportunities that come along maybe once a month, maybe once or twice in a quarter...if you're following over 25 pairs... Some think that by scalping every day of the trading week they will be able to "make a living". You mind as well go and play slot machines! This is the same as with gambling in sports, you put all the money on a "sure thing" that comes along once or twice a year, from an inside...

There's a lot of truth in what you say. When to trade is probably as important where to trade. For instance, I very rarely trade on a Monday. Mondays are often scrappy and indecisive after big moves on the Friday beforehand. Trends invariably start forming on Tuesday/Wednesday. Big moves often start around 8.30 - 9.30am and 2.30 - 3.30pm London time.
However I wouldn't say one has to wait so long between trades. Let's take just one trading pair as an example: GBPNZD. Looking back over the month of June so far if one traded just 3 or 4 days one could be sitting with 600 - 800 pips already. I try to concentrate on trading pairs with a large daily range. EURJPY, GBPNZD, Gold, AUDCHF are good examples.
  • #91
  • Jun 30, 2013 10:06am Jun 30, 2013 10:06am
Guys please don't mix your trading preferences with the fact that most people loose....being a scalper, day trader, swing trader is a style...here we are talking about why is it so hard to succeed....

Is there a mechanism on the exchange that shows where most of the small retail traders have their positions? Does it have something to do with how we as humans are wired? More opinions please...
  • #92
  • Jun 30, 2013 2:59pm Jun 30, 2013 2:59pm
Quoting Vitez
Guys please don't mix your trading preferences with the fact that most people loose....being a scalper, day trader, swing trader is a style...here we are talking about why is it so hard to succeed.... Is there a mechanism on the exchange that shows where most of the small retail traders have their positions? Does it have something to do with how we as humans are wired? More opinions please...

Hi Vitez

I think you are missing the point. The point that we are trying to make and I will repeat it:

SRT's find it hard to succeed because they worry too much about where to place a trade instead of when to place a trade! There are times (often) when PA hardly moves and times when it occasionally shoots up or down very quickly "a breakout". Identifying those periods (in my view) is the key. Really it doesn't matter whether one trades 10 lots or 10th of 1 lot as long as one is trading in the right direction during breakouts. However psychologically it's far better to trade a lot amount you feel totally comfortable with.

Have a look at https://www.fxjunction.com/ nice site to get an idea of where many SRT's are positioning.
  • #93
  • Jun 30, 2013 4:38pm Jun 30, 2013 4:38pm
Quoting Vitez
Guys please don't mix your trading preferences with the fact that most people loose....being a scalper, day trader, swing trader is a style...here we are talking about why is it so hard to succeed.... Is there a mechanism on the exchange that shows where most of the small retail traders have their positions? Does it have something to do with how we as humans are wired? More opinions please...
Most brokers have a Commitment of Traders listing, a COT table. On the FF main page near the bottom you can find similar data but for only a limited number of instruments. A typical view of the COT tables is that one should trade in the opposite direction to the main weight of trades - maybe that is a subject for another thread.

Personally I ignore the COT tables, I consider them to be just mildly interesting.
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #94
  • Jul 1, 2013 1:54am Jul 1, 2013 1:54am
Quoting Vitez
Guys please don't mix your trading preferences with the fact that most people loose....being a scalper, day trader, swing trader is a style...here we are talking about why is it so hard to succeed.... Is there a mechanism on the exchange that shows where most of the small retail traders have their positions? Does it have something to do with how we as humans are wired? More opinions please...
Big contract sizes only get access to Interbank exchange. Most of the time your broker is filling in your order. Do yourself a favor, try and get a hold of a broker that works or ahs worked with the brokerage and ask them to tell you the rough percentage of their scalpers and daytraders that come on top vs the long term breakout, swing traders and trend followers.
  • #95
  • Jul 3, 2013 1:32am Jul 3, 2013 1:32am
Quoting Exodus
{quote} I now have 2 quarters profitable. June was somewhat anaemic but if I close all my positions now I will still be in profit for Q2.
June was okay but not as great as I'd expected it to turn out..but still an improve over May.
On trading preferences, it makes more sense to learn when to trade and when to avoid the market, esp during important news or fed announcements.
  • #96
  • Jul 3, 2013 10:05am Jul 3, 2013 10:05am
Most of the traders are failure because of their weak mindset - think out of the box to be different from those majority of failures.
  • #97
  • Jul 3, 2013 1:09pm Jul 3, 2013 1:09pm
Quoting Greeneyez
Most of the traders are failure because of their weak mindset - think out of the box to be different from those majority of failures.
Or they just treat Forex like an every-day trip to a casino.
  • #98
  • Jul 3, 2013 3:14pm Jul 3, 2013 3:14pm
Quoting jmtini
{quote} Hi Vitez I think you are missing the point. The point that we are trying to make and I will repeat it: SRT's find it hard to succeed because they worry too much about where to place a trade instead of when to place a trade! There are times (often) when PA hardly moves and times when it occasionally shoots up or down very quickly "a breakout". Identifying those periods (in my view) is the key. Really it doesn't matter whether one trades 10 lots or 10th of 1 lot as long as one is trading in the right direction during breakouts. However psychologically...
Hi jmtini

What you probably mean here is that traders don't look at a bigger picture, higher time frame to see if there is a high probability of a strong move, right?
  • #99
  • Jul 3, 2013 3:23pm Jul 3, 2013 3:23pm
Quoting backinblackl
{quote} Big contract sizes only get access to Interbank exchange. Most of the time your broker is filling in your order. Do yourself a favor, try and get a hold of a broker that works or ahs worked with the brokerage and ask them to tell you the rough percentage of their scalpers and daytraders that come on top vs the long term breakout, swing traders and trend followers.
On the other hand here is an example when a trader finds out that small every day profit gives him huge success. I see many comments of traders saying that having smaller TP (but more of those) actually did the trick.

http://www.forexfactory.com/showthread.php?t=414566

For sure market makers can manipulate 5min chart while 1H much harder but IMHO if you swing/position trade you have to at least add to a winning position (pyramiding) so that those swings that you do catch are massive gainers.
  • #100
  • Jul 4, 2013 6:37am Jul 4, 2013 6:37am
I'm a bit tired of seeing these "x% people lose/x% win". First of all it's totally random numbers. Second of all, it doesnt mean much. It just means that a LOT of people are just gambling in the markets and never put any work towards actually achieving good results.

It's like saying "only 1% make it to the best football teams". Well, yeah. It requires a buttload of dedication, hard work, VERY hard work. It's not because the % is low that it's impossible. It just means get up and do the work to get there!
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