What does 90% fail actually mean? | Forex Factory

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What does 90% fail actually mean?

  • #1
  • First Post: Jul 30, 2013 3:52am Jul 30, 2013 3:52am
One of the things that gets repeated ad nauseam is the statistic that 85%, 90% or 95% of all aspiring forex traders fail. The number seems variable, the only requirement perhaps is that it be big enough to scare newbies and make successful traders feel smug.

But what does ‘fail’ actually mean in this context? I’ve never seen any definition.

Is it blown accounts?

What about people who close their accounts for less than they started with?

A lot of people, I think, get drawn into forex by believing all the hype they read and the promise of easy profits. Someone like this may well soon realise that trading is not for them or it requires more time than they have to spend. Are they failures? Perhaps, or more likely victims. Certainly getting out is a rational decision for them and they haven’t failed in the sense of not being capable of trading just unwilling.

What about a trader who over and over loses 90% of the account and repeatedly tops it back up again so they are really haemorrhaging money? I bet they don’t show up as a fail though in most people’s book they would be.

So, does anybody really KNOW what the true definition is and where it comes from anyhow?
Too tired to argue. Too old to care.
  • #2
  • Jul 30, 2013 4:27am Jul 30, 2013 4:27am
I guess it is simply those that have been unprofitable - not blown accounts only.
  • #3
  • Jul 30, 2013 5:02am Jul 30, 2013 5:02am
The way I see it those stats concern long term profitability (let's say 1 year, +). I've seen lists showing profitable account % per broker posted here on FF before. Those lists show something like 25-30% average are profitable per trimester. However, from those profitable in trimester 1 only some will be profitable in trimester 2 too, and so on. So, you can imagine the number of accounts that remain in profit all 4 trimesters makes for a very small % indeed.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #4
  • Jul 30, 2013 5:11am Jul 30, 2013 5:11am
Failure by definition:
1. To fall short of success or achievement in something expected, attempted, desired, or approved.
2. Omission of occurrence or performance; specifically : a failing to perform a duty or expected action.

By my definition; Not able to achieve your set objective, or have not yet achieve the desired objective.
And what are the objective of trading? to make money, to supplement an income, to add a side income on top of job income, etc...

If one has not achieve their set objective, then they have failed. The grand objective of trading FX is simply making money to support you or add additional income. If one hasn't met this objective, then it is a failure.

Of course, you can sugar-coat anything and say things like, failure is only when you give up; so as long as you don't give up then you have not failed. You can also say that you are still learning the process, so by definition you have not failed nor been successful. You can sugar-coat anything in anyway but at the end of the day, you are only deluding yourself (and it is a harsh and painful reality to accept the truth).

Again, by my definition; Not able to achieve your set objective, or have not yet achieve the desired objective. Meaning, you're a failure until you are not. I feel that facing the truth and being brutally honest to yourself has more power and driving force than making excuses of what not. There are no middle grounds. You either are or you are not, you do or you do not.
  • #5
  • Jul 30, 2013 6:37am Jul 30, 2013 6:37am
Quoting CrucialPoint
Failure by definition:
1. To fall short of success or achievement in something expected, attempted, desired, or approved.
2. Omission of occurrence or performance; specifically : a failing to perform a duty or expected action.....
Two important terms here are: Falling short and expectation.
The first one means that you need an accurate and exact method to measure whether you are falling short of what you should have done or no.
The second one (expected) means that you have to have an accurate specification of what you are expecting for. You need to define your goal, clearly and without ambiguity.
  • #6
  • Jul 30, 2013 6:53am Jul 30, 2013 6:53am
Quoting davidb
One of the things that gets repeated ad nauseam is the statistic that 85%, 90% or 95% of all aspiring forex traders fail. The number seems variable, the only requirement perhaps is that it be big enough to scare newbies and make successful traders feel smug. But what does ‘fail’ actually mean in this context? I’ve never seen any definition. Is it blown accounts? What about people who close their accounts for less than they started with? A lot of people, I think, get drawn into forex by believing all the hype they read and the promise of easy profits....
Don't even take any notice of stuff like that, it has no bearing on the future success of you or anyone else and furthermore it's complete bull passed from one to another and never substantiated.

The only fact is that many fail because they break simple rules.
tradewith60
  • #7
  • Jul 30, 2013 7:13am Jul 30, 2013 7:13am
I lost hope several times trading fx and I justified myself that the game is heavily rigged.But when I discovered there's a really big edge that's available even to us retailers I was shocked. I have gone through my results and the only reason why I haven't made tons of money is because I can't accept the money is there for my helping. The markets have definitely given me lots of opportunities but I continue to shoot myself in the foot. Its true we are our own worst enemies and the markets give us the opportunities to bring our desires to fruition whether good or bad.
Just take a look at the retail positions.Its always countertrend and up to 80% against the strongest and cleanest trends.At first I thought its a trick but its shockingly true.
The average busted account has a 65% win rate and 0.5 P.F.
Cut your winners short and let you losers ride seems to be the philosophy.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #8
  • Jul 30, 2013 7:14am Jul 30, 2013 7:14am
Quoting davidb
One of the things that gets repeated ad nauseam is the statistic that 85%, 90% or 95% of all aspiring forex traders fail. The number seems variable, the only requirement perhaps is that it be big enough to scare newbies and make successful traders feel smug. But what does ‘fail’ actually mean in this context? I’ve never seen any definition. Is it blown accounts? What about people who close their accounts for less than they started with? A lot of people, I think, get drawn into forex by believing all the hype they read and the promise of easy profits....
To my knowledge there is no reputable & comprehensive study about retail Forex failure rates. But there is a study about daytraders in the Asian stock market from the 90s. If I recall correctly, the study followed 10.000 accounts over a period of 15 years. In the end, only 27 people (that´s 0.27%) managed to increase their initial stake through daytrading and they made 5% a year on average. Maybe that helps.
  • #9
  • Jul 30, 2013 7:36am Jul 30, 2013 7:36am
To say 90% fail is just silly, 90% of what, one has to do an experiment like the one Myo talks about, but other than the Turtles I am unaware of a purely forex retail experiment that has been done.

Just randomly saying 90% fail without set criteria or proof is ridiculous.
When all conditions are met - Enter trade - sit back and FRET !!!
  • #10
  • Jul 30, 2013 8:05am Jul 30, 2013 8:05am
Quoting 60minuteman
{quote} Don't even take any notice of stuff like that, it has no bearing on the future success of you or anyone else and furthermore it's complete bull passed from one to another and never substantiated. The only fact is that many fail because they break simple rules.
Quoting jsf
To say 90% fail is just silly, 90% of what, one has to do an experiment like the one Myo talks about, but other than the Turtles I am unaware of a purely forex retail experiment that has been done. Just randomly saying 90% fail without set criteria or proof is ridiculous.
I must admit this is what I've always felt, that it was a largely ill-defined and unsubstantiated number.

But as is bandied about so often (a new thread about it commenced only yesterday) I did start to wonder if there was any basis for it, for example from broker reporting.

I guess each individual trader needs to set their own success criteria and measure themselves against them. But in so doing that makes the original 90% metric wholly irrelevant even if it has any basis.

Thanks for all your replies, especially as you have confirmed my prejudices!
Too tired to argue. Too old to care.
  • #11
  • Feb 13, 2014 5:29am Feb 13, 2014 5:29am
1. Forex is zero sum: this is fallacious from the get go...Forex is -ve sum.
2. Tarders helping fellow tarders , see 1
3.
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4.
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5. Re 4 - is I believe showing pips vs pips which as most retail tarders subscribe to the idiot 'money management' methods re Van F@rt et al, still hold true
  • #12
  • Feb 13, 2014 7:49am Feb 13, 2014 7:49am
Quoting nunrgguy
1. Forex is zero sum: this is fallacious from the get go...Forex is -ve sum. 2. Tarders helping fellow tarders , see 1 3. {image} 4. {image} 5. Re 4 - is I believe showing pips vs pips which as most retail tarders subscribe to the idiot 'money management' methods re Van F@rt et al, still hold true
You are absolutely right. Contrary to the consensus, Forex is not a zero sum game, but a negative sum game. It's simple math: spreads, commissions, slippage assures that it is so. Spread may look insignificant at the surface, but just like a tiny killer microbe, it may kill you. It kills most edges. Only a few edges are solid enough to allow survival, or growth. Therefore, the majority may find it more rewarding to have no position at all. On the bright side, yes it's a road full of obstacles, but with diligence it's possible to get to the destination.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #13
  • Feb 13, 2014 8:10am Feb 13, 2014 8:10am
Quoting vox dei
{quote} You are absolutely right. Contrary to the consensus, Forex is not a zero sum game, but a negative sum game. It's simple math: spreads, commissions, slippage assures that it is so. Spread may look insignificant at the surface, but just like a tiny killer microbe, it may kill you. It kills most edges. Only a few edges are solid enough to allow survival, or growth. Therefore, the majority may find it more rewarding to have no position at all. On the bright side, yes it's a road full of obstacles, but with diligence it's possible to get to...
Even when the stats are straight in front of your face, a blanket statement with nothing backing it up.
Welcome to the world of forum XXXX where everyone is a winner.
  • #14
  • Feb 13, 2014 8:26am Feb 13, 2014 8:26am
Quoting davidb
One of the things that gets repeated ad nauseam is the statistic that 85%, 90% or 95% of all aspiring forex traders fail. The number seems variable, the only requirement perhaps is that it be big enough to scare newbies and make successful traders feel smug. But what does ‘fail’ actually mean in this context? I’ve never seen any definition. Is it blown accounts? What about people who close their accounts for less than they started with? A lot of people, I think, get drawn into forex by believing all the hype they read and the promise of easy profits....
If you think about it, there are no facts or certifed statistics to back up the 90% fail, perhaps it is just another popular beleif with no real evidence to back it up?
Tracking the Specialists.
  • #15
  • Feb 13, 2014 8:40am Feb 13, 2014 8:40am
Well, isn't true that 90% of just about EVERYONE isn't successful at a given venture? Be it business, music, athletics, etc. In the branch of the music business I'm in, I would easily say 95% of musicians aren't successful by conventional definition (money, fame, steady work). But of course, much of the joy in music is in the emotional satisfaction of simply writing and performing. The work IS the reward. I'm not sure that trading is satisfying enough to do it badly for a number of years, but apparently it is, because I'm still around. Ha.
There's always money in the banana stand.
  • #16
  • Feb 13, 2014 9:17am Feb 13, 2014 9:17am
It's failing to take profit... That's really the end of the discussion... Google it... It's the problem in all markets...
SPC * Swollen PocketZ Crew!
  • #17
  • Feb 13, 2014 9:19am Feb 13, 2014 9:19am
Its the 390 rule:

90% of retail traders lose 90% of their money within 90 days.
  • #18
  • Feb 13, 2014 10:08am Feb 13, 2014 10:08am
Quoting nunrgguy
{quote} Even when the stats are straight in front of your face, a blanket statement with nothing backing it up. Welcome to the world of forum XXXX where everyone is a winner.
Profitable = possible. Happy now?
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"To hold, you must first open your hand. Let go." - Lao Tzu
  • #19
  • Feb 13, 2014 10:22am Feb 13, 2014 10:22am
Quoting davidb
One of the things that gets repeated ad nauseam is the statistic that 85%, 90% or 95% of all aspiring forex traders fail. The number seems variable, the only requirement perhaps is that it be big enough to scare newbies and make successful traders feel smug. But what does ‘fail’ actually mean in this context? I’ve never seen any definition. Is it blown accounts? What about people who close their accounts for less than they started with? A lot of people, I think, get drawn into forex by believing all the hype they read and the promise of easy profits....
david are you not yet profitable?
Passion, Persist, Patience, Protect
  • #20
  • Edited 11:24am Feb 13, 2014 11:13am | Edited 11:24am
Quoting vox dei
{quote} Profitable = possible. Happy now? {image}
Statistically it's of no significance. Show me it again in 10 years time.
Although I cannot argue that you are not doing very well at present. Long may it continue.
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