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95% traders go broke, only 5% survive

  • #201
  • Jan 14, 2014 10:46pm Jan 14, 2014 10:46pm
Quoting DonGiulio
... Again, my apologies if I have seemed too harsh or have lacked of respect to anyone. Best regards,
No worries, you explained yourself enough and I don't have any further comment. Good trading to you.
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #202
  • Jan 15, 2014 12:00am Jan 15, 2014 12:00am
I don't think there is some education in forex in the literal sense of the word. Learning forex theory took 2 days for me but later I understood that knowledge about forex is actually only 5% of a trading on it. Another 95% is about economics and market mechanisms and its psychology.
  • #203
  • Jan 15, 2014 12:29am Jan 15, 2014 12:29am
Quoting leebsurag
I don't think there is some education in forex in the literal sense of the word. Learning forex theory took 2 days for me but later I understood that knowledge about forex is actually only 5% of a trading on it. Another 95% is about economics and market mechanisms and its psychology.
Good one mate. It's easy to learn forex. But hard to earn even after few years. That's the nature of this business
  • #204
  • Jan 15, 2014 2:13am Jan 15, 2014 2:13am
Let me show you why 0.4% consistent profit trader is valid.
1. statement 0.4% make consistent money can be calculated.
as the brokers shows quarterly 25-30% make money.
this means for those who make money for a series of 4 quarters the probability is 0.25^4-0.3^4= 0.4%-0.8% which means the PH.D study report is valid.

2. how much ratio trader make money yearly. 6%
this is quite easy to calculate. if someone make two profit quarters and profit is higher than the losing two quarters, he may make money.
just 0.25^2-0.3^2=6%-9%.
ASAF YIGAL from currensee said only 6% trader is profitable by a year base. This means it is valid.

3. how many can make money for 3-4 years
A Chinese forex community said out of 2700 traders, there are 10 consistent profit trader for over one year, 5 over 2 years, 2 over 3 years. none over 4 years yet. which means totally consistent profiting ratio is 17/2700=0.6%. which again validate the 0.4% profitable statement. long term profitable retail trading can be even less 0.2% or less.
  • #205
  • Jan 15, 2014 2:44pm Jan 15, 2014 2:44pm
I`ve read a few posts, quite nice thread.

Well first of all the 95% is an urban myth, i think its around 65% who lose, because its recurring, not everyone always wins, because that way there would be no counter-trade to your trade.So if there is a situation in the market and if there is 1.000.000$ bought then you must have the equivalent of that in € to be sold.Not necessary the same amount of people, but the same amount of capital.

And since the retail traders with 100-10.000€ accounts are more than the big traders with millions, we can assume that the big traders have a million because they are better, and the newbies have small capitals because they are newbies.

But still some 100€ guy may emerge to be a billionaire some day, but the big trader probably will always win in the long term, so its more about sustained profit than the outcome of the current trade.

And in this case probably that 65% losers will be composed by 99% of the retailers group and by 1% of the institutionals.So only a small fragment of banks lose huge cash, while from the retailers, probably 64%-63%.
"There's a sucker born every minute" - P.T. Barnum
  • #206
  • Jan 15, 2014 2:56pm Jan 15, 2014 2:56pm
Quoting Proximus
I`ve read a few posts, quite nice thread. Well first of all the 95% is an urban myth, i think its around 65% who lose, because its recurring, not everyone always wins, because that way there would be no counter-trade to your trade.So if there is a situation in the market and if there is 1.000.000$ bought then you must have the equivalent of that in € to be sold.Not necessary the same amount of people, but the same amount of capital. And since the retail traders with 100-10.000€ accounts are more than the big traders with millions, we can...
Seriously NO, it doesn't work that way, if I win the person who takes my lot doesn't automatically lose, he can close it at a profit any time he wants, you've bought into a huge MYTH here, think about it!!

A group of people ( Retail sadly ), must lose the 100Bil per year, that the Banks and the likes profit, that's why they can't make ZILLIONS they can only make what people lose, the market merely redistributes it, it does not create it sadly.

All Banks and the Like profit hugely, so sadly there profits have to come from US!!

And there is millions of us, losing $100 per month or more in general, they want either big accounts to lose all, or small traders on mass, which lose $100 per month as a hobby but repeatedly.

It's the small traders which crack it, the rich people slap in 100K for a quick play ( mate of mine with stocks, 100K all in 1 stock lost 99.99% of it ), then lose it and never play again, they love them.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #207
  • Jan 15, 2014 3:28pm Jan 15, 2014 3:28pm
In the Gold rush of the 1850's the most consistent way to make money was to sell the picks and shovels to those searching for the Gold, same as today's Forex gurus and magical system sellers

there are stats that show traders who have demo traded for at 3 least yrs have a much higher probability of succeeding to be profitable long term
and those below 2 yrs and esp under 1yr or no demo the highest chance of failure
this is obvious in hindsight, but seems some still think they can beat the market with little or no demoing trading and training

In today's markets against computer modeling / HFTs / Dark pools / fixed and manipulated markets etc etc
one would be a fool not to be 95% sure of their winning survival method before entering a shark tank
(or stock market)
although this also does n't become obvious to aspiring traders until after around 2 yrs, and who knows how many traders fail within even the 1st yr
one lucky win at the very start and we are all trading Gods
  • #208
  • Jan 15, 2014 3:56pm Jan 15, 2014 3:56pm
Quoting Carlsberg
In the Gold rush of the 1850's the most consistent way to make money was to sell the picks and shovels to those searching for the Gold, same as today's Forex gurus and magical system sellers there are stats that show traders who have demo traded for at 3 least yrs have a much higher probability of succeeding to be profitable long term and those below 2 yrs and esp under 1yr or no demo the highest chance of failure this is obvious in hindsight, but seems some still think they can beat the market with little or no demoing trading and training In today's...

16 years back, mate got into trading Nasdaq Stocks, got me into it, kept hyping all of his big winners sounding great, his mom gave him £20K to have a play LOL, what he wasn't doing was mentioning all of his big losers until his account was wiped out pretty quickly.

His mom did the same, but with 100K

They subscribed to some crappy guru, $400 per week, strict rules on talking among yourselves about them, bla bla bla, guess what a Scammer no really LOL fairly obvious to anyone with a brain really, but these 2 bought into it big time, ultimately got closed down, but they found them elsewhere doing exactly the same already so they just didn't care.

Tis funny!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #209
  • Jan 15, 2014 11:22pm Jan 15, 2014 11:22pm
Quoting Carlsberg
....one lucky win at the very start and we are all trading Gods
One lucky win at the start and we are hooked!
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #210
  • Jan 17, 2014 7:37pm Jan 17, 2014 7:37pm
I think the reason there are so many retail failures is because many people want to give their get rich shot a gamble and don't study enough before they put their money where their mouth is. I've been lucky enough to have access to a University Library stocked with all sorts of trading info most of which is just the same junk, but some stuff is gold out there. There are so many methods and schemes to apply to trading most of which is proposed by sellers of these materials to make money. They sell complex systems and indicators which just re-package readily available information.

unfortunately most traders have no concept of risk management or money management to fall back onto which basically is how you win at the trading game. That's how the big boys win. They know their risk, they know their expected return on their system and they follow their rules. If you don't know that information and your losing at trading you should inspect your system and try to find this info.

Finally except for a few people. I think trading is amazingly banal and unrewarding because you really aren't doing anything useful. All your doing is speculating on exchange rates to add liquidity and volatility to the market. This is why you can win at the Forex game. It's not a zero sum game, speculators (Us) just want to make money for ourselves, institutions may want to enter the market for more complex reasons. Your winning trade might go to a hedge fund which is expecting to lose their trade, but it's OK for the hedge fund because they are going to make money on the other side of their system.
  • #211
  • Jan 20, 2014 11:30pm Jan 20, 2014 11:30pm
I read an article today in swedish news paper about a guy writing a book about why humans are greedy. He explains that it is a instinct and very very hard to change. We have the instinct because of we wants security and be wealthy because it attracts.
Twitter: FutureRates
  • #212
  • Jan 21, 2014 2:03am Jan 21, 2014 2:03am
i think all members here should get together and put monies together and start broker firm lol. that's where all the mony is. i am reading somewhere the brokers is making on average about 100% returns from each account they are holding.

sgp
  • #213
  • Mar 3, 2014 2:03am Mar 3, 2014 2:03am
Did you ever go full time? Iirc you were doing very well - up over 120% per annum with a decent return of cash.



Quoting yunben
Let me show you why 0.4% consistent profit trader is valid. 1. statement 0.4% make consistent money can be calculated. as the brokers shows quarterly 25-30% make money. this means for those who make money for a series of 4 quarters the probability is 0.25^4-0.3^4= 0.4%-0.8% which means the PH.D study report is valid. 2. how much ratio trader make money yearly. 6% this is quite easy to calculate. if someone make two profit quarters and profit is higher than the losing two quarters, he may make money. just 0.25^2-0.3^2=6%-9%. ASAF YIGAL from currensee...
  • #214
  • Mar 4, 2014 1:05pm Mar 4, 2014 1:05pm
Hello all, let me try to answer that question in an appropriate manner.

First of all- 95% of us are poor. What most of us can spare for forex is less than 1000 bucks. We hold our hopes that through forex we can become rich- which theoretically is possible. Because we are poor in the first place that has affected our psyche- we are afraid to lose even the little we have, because that's loaded with our hopes for that single shot we have to make...

But! Have you ever heard of business started virtually without money? Of course not, don't try to give me examples. The same is with forex- if you want to make money, you have to have it in the first place. Do you think the big traders are a bunch of wonder makers who walk on water and predict the future? Hell no- all they do is just having such volume in their accounts that entering a solid trade won't affect anything even if price goes against their direction for 6 months.

We, the mortals, call them "position traders" (I am not talking about institutions, although it's not too different)... WOW! They simply have the comfort of the big account and wait until their deal goes to profit. For example- if a trader has 20M in his account and risks 1 million and the deal goes to 200K plus in just a minutes he will exit at that point IMMEDIATELY. But what happens if the price goes against the trade and hits -500K? The trader leaves it there and goes around and start talking how he is taking long term position, how he read the fundamentals... Even if he loses 500K or a million he will be still in the game with full power.

In reality he rides the negative market because he knows that sooner or later he will go to positive and his account isn't going to be blown away, because a risk management is not difficult to consider, especially for big accounts. He enters with 10-20-50 lots and needs just 50- 100 pips for the annual income of a household. It's that simple. They don't need to aim for 30%- 50%-100%... They are ok with 2% or 1%, even less per year. With big volume and bigger account it is very easy- often a matter of 1-2 trades. I am not saying they do not know what are doing- on the contrary. But many of us know no less than them and the difference is the money.

And what most of us do meanwhile? We are rolling cents and few bucks through our micro and mini accounts planning how to make 30-50-100% profit for particular time... We put goals for our cents to multiply but think clearly. Even if we manage to succeed 100% per year with 500$ we'll have... 1000$ for a year! WOW! To achieve that we'll need to trade more often but the more we trade the more we expose our little money on risk. Consider the odds in the market and it should be clear. Even if we capture 200 pips a day, with the small amount we have we'll win just 2-3 bucks.

So, my friends if you want to be successful with forex having a big account is advantage and even then you are not likely to succeed if you are too greedy.

And don't go on me with mathematics formulas and calculations. If you think forex is about math then my advice is take your money (if any) back and close your account. Don't get despaired though. Take what we do as a training, because someday we may be on the winning side.

I have a lot more to say but this post has grown too much already. I know this post doesn't help at all but at least it may comfort those who blame themselves too much for having bad finance in life. Keep it up, we live in bad economic times...
Panamera Lifestyle
  • #215
  • Mar 4, 2014 2:15pm Mar 4, 2014 2:15pm
Quoting Drizzt
Hello all, let me try to answer that question in an appropriate manner. First of all- 95% of us are poor. What most of us can spare for forex is less than 1000 bucks. We hold our hopes that through forex we can become rich- which theoretically is possible. Because we are poor in the first place that has affected our psyche- we are afraid to lose even the little we have, because that's loaded with our hopes for that single shot we have to make... But! Have you ever heard of business started virtually without money? Of course not, don't try to give...
This is one of the best posts I have ever seen here! I couldn't agree more. When I made the decision to trade full time and quit my job 15 months ago I knew that I had to run this as a business. So I created an LLC (taxed as an S-Corp) to take advantage of the many trading benefits a profitable trader can realize trading out of a business entity and I put a substantial amount of start-up money. I don't understand how so many can open up $1,000 accounts, leverage themselves to the sky and feel that they can make millions. This is not a get rich quick scheme but if you treat your trading like a business there's great coin to be made in Forex
  • #216
  • Mar 4, 2014 11:19pm Mar 4, 2014 11:19pm
Actually 99.6% of people lose money in FOREX...
The Black Swan: The Impact of the Highly Improbable
  • #217
  • Mar 5, 2014 1:29am Mar 5, 2014 1:29am
Quoting Drizzt
.... They don't need to aim for 30%- 50%-100%... They are ok with 2% or 1%, even less per year. With big volume and bigger account it is very easy- often a matter of 1-2 trades....
I do not believe such people would settle for this small amount. They would be better off buying bonds which yield more and keep the security of their money. However they could settle for ~5% which would allow the extraction of 1.5% for living expenses and leave 3.5% to combat inflation.

In reality I believe there is no point trading/dealing in forex unless you are going to make more than 10% per year. IMHO
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #218
  • Mar 5, 2014 1:42am Mar 5, 2014 1:42am
Quoting Exodus
{quote} I do not believe such people would settle for this small amount. They would be better off buying bonds which yield more and keep the security of their money. However they could settle for ~5% which would allow the extraction of 1.5% for living expenses and leave 3.5% to combat inflation. In reality I believe there is no point trading/dealing in forex unless you are going to make more than 10% per year. IMHO
Yes, you are right. I said "They are ok with 2% or 1%, even less per year" to describe the bare minimum which is still acceptable for people with M in their accounts but let's don't forget that people are different- some will settle for less, some won't. And also a big truth- they make most of their money from other activities.
Panamera Lifestyle
  • #219
  • Mar 5, 2014 1:47am Mar 5, 2014 1:47am
Quoting Exodus
{quote} I do not believe such people would settle for this small amount. They would be better off buying bonds which yield more and keep the security of their money. However they could settle for ~5% which would allow the extraction of 1.5% for living expenses and leave 3.5% to combat inflation. In reality I believe there is no point trading/dealing in forex unless you are going to make more than 10% per year. IMHO
I agree, most institutional investors are looking for a minimum of 7-8%+ a year otherwise the safe bond yield would be the option.. 10% is a good return annually and 15% + is a very good return especially if averaged over many years with minimal peak to trough draw downs..
Memories caught in time but never forgotten
  • #220
  • Mar 5, 2014 10:28am Mar 5, 2014 10:28am
Quoting j4d
{quote} I agree, most institutional investors are looking for a minimum of 7-8%+ a year otherwise the safe bond yield would be the option.. 10% is a good return annually and 15% + is a very good return especially if averaged over many years with minimal peak to trough draw downs..
10% is a good return annually, that's a given. But with most traders, especially the ones with the smaller account, the need to increase or ensure ROI exceeding this, is a must resulting in more risky traders, larger exposure which may account for the title of this old thread..
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