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95% traders go broke, only 5% survive

  • #401
  • Edited 6:44am Mar 18, 2014 4:09am | Edited 6:44am
Quoting ronaleo10
{quote} Don't feel offended but , Based on your trading explorer you put , it seems obvious that you are gambling too. More than 40 % draw down in 1 freaking trade by any mean is Pure gambling. revenge trading is your biggest psychological problem and which apparently you haven't mastered after 10 years of experience. no wonder your friend ended up blowing account so fast.
I have 10k as my trading balance, only 1k is in the trading account. I gave that information in my post.

Quoting M.A.C.Doug
{quote}This year I have 10k saved up to start trading again. I have put just 10% of that into an account.
That is not gambling - thats risk management. The drawdown you mention reflects 4% of my trading funds not 40% but its not even that. It was caused by closing out hedged positions, not one single trade, mark to market I was never even that far down. The explorer shows it as drawdown from a series of losses then recovery from a series of wins
conversely, I am not 60% up for a month of trading, I am 6% up and very satisfied with that return.

Quoting vox dei
{quote} It's not that I'm a rare case. I am as psychologically vulnerable/human as everybody else when it comes to discretionary trading. It's that I have an heightened awareness of how contra human nature consistently profitable trading really is due to background. If the enemy is too strong, the only way to win is to avoid the fight
Couldnt agree more, My trading looks like a discretionary mess, flipping at the drop of a hat but it is so rule based now it could almost be coded. A human being is not reliable enough for the reasons you mention. That is what I was refering to when I said there were short cuts as far as psych and trading go. These days I just do what Im told when Im told with risk managed

Quoting IndigoPingvi
{quote} She lost everything in 700 negative pips? That sounds like a bad Money Management...
She was an awesome trader. in 2008, the day of the crash, I watched her take three long trades intraday. All won 30 pips from a 10 pip risk each. She netted 13% for the day trading against the massive move. That is pin point accuracy. One time, the market finally frustrated her into changing her technique and she held on to a loser. Her money management was fine had she taken the 10 pip loss. She had taken a beating but she would have recovered another day. I dont know about your guy who lost half a mil but a poor girl in Lebanon who lost over 200k is never going to see anything like that sort of money again

Quoting hamedmohd
{quote} impressive and good luck
Thank you
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  • #402
  • Mar 20, 2014 1:08pm Mar 20, 2014 1:08pm
Quoting hanover
{quote} Claudia, Very brave of you to even mention the word "win" in this thread! LOL. Anyway, nice to see that one of my EAs is profitable, even if the settings require some manual intervention. Keep up the great work. I'll definitely stop by your thread some time. David
Hey please please look at the last few posts on my thread. Maybe you can help (I know you can!) it is interesting. Take care David thanks.
  • #403
  • Mar 20, 2014 1:15pm Mar 20, 2014 1:15pm
Scared money dont loose nor win.
  • #404
  • Mar 23, 2014 7:47am Mar 23, 2014 7:47am
Quoting Makavell
Believe me, trading the currency markets is the most difficult thing you'll ever do your whole dammn life. You are going to go through different stages and eventually arrive at a self formulated and time tested mode of trading that suites you as a person, taking into consideration your strengths and weaknesses. This is the part most newbies dont like to hear " THIS PROCESS TAKES YEARS!!!. Its far far better if you started quite early like I did cause no matter how many accounts you blow in your learning process, you'll still have a roof over your...
Crikey!!!!!!!!!!! a positive post about FX trading - I was beginning to get depressed, reading all the posts telling me I've been wrong for the past 10 years lol.
  • #405
  • Mar 23, 2014 8:04am Mar 23, 2014 8:04am
Quoting M.A.C.Doug
{quote} In 2005 I took a demo account from $2000 to over 2 million in three months trading equity cfd's long during a bull run. Whenever price came down I bought. I really believed I was some sort of trading genius. I really believed I could see something no one else could. In October of that same year I borrowed 10k at high interest. I really believed I was going to repeat the performance with real money and that I would retire a millionaire by Christmas the market went down I bought, it went down further I bought, It kept going down and I kept...
Hey Macd Can I ask why you are going back to trading now after your past experiences - Its seems like a brave thing to do and indicates, maybe that even after all you have been through you still believe that it is possible to make money in this game???
  • #406
  • Edited 3:34am Mar 24, 2014 2:36am | Edited 3:34am
Quoting stewrigh
{quote} Hey Macd Can I ask why you are going back to trading now after your past experiences - Its seems like a brave thing to do and indicates, maybe that even after all you have been through you still believe that it is possible to make money in this game???
I actually never left. I had a year off from live trading during which time I still worked on my systems and techniques and spent alot of time researching brokers. Im 8 years in, Im not giving up now, Ive given myself a 20% drawdown limit and I refuse to go anywhere near that. Im 10% up this year

I think the conversation we are having here exposing some truth about trading is important. It was getting ridiculous with every other member claiming huge returns. I still believe it is possible to make money, but I know how hard it is. I wouldn't recommend it to anyone if for no other reason than there are easier and more certain ways of being rewarded for your effort.

I agree 100% with this statement

Quoting Makavell
Believe me, trading the currency markets is the most difficult thing you'll ever do your whole dammn life. You are going to go through different stages and eventually arrive at a self formulated and time tested mode of trading that suites you as a person, taking into consideration your strengths and weaknesses. This is the part most newbies dont like to hear " THIS PROCESS TAKES YEARS!!!. Its far far better if you started quite early like I did cause no matter how many accounts you blow in your learning process, you'll still have a roof over your...
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  • #407
  • Edited 4:08am Mar 24, 2014 3:46am | Edited 4:08am
Quoting M.A.C.Doug
{quote} I actually never left. I had a year off from live trading during which time I still worked on my systems and techniques and spent alot of time researching brokers. Im 8 years in, Im not giving up now, Ive given myself a 20% drawdown limit and I refuse to go anywhere near that. Im 10% up this year I think the conversation we are having here exposing some truth about trading is important. It was getting ridiculous with every other member claiming huge returns. I still believe it is possible to make money, but I know how hard it is. I wouldn't...
I also started about 8 years ago(then I joined FF) and I agree it is the most difficult stressful thing I have ever done. Haven't lost any serious money but haven't made a lot either, mainly coz of my other commitments - this is or should be a full time endeavor - you can't trade part time IMO - you need to commit 100%.

I also believe that 95%+ 'traders' lose. But I think that figure depends on how you define a trader - Most of the guys on FF are not traders - they are kids playing a new game and drop off after a few posts.

But having said that there are a few around, who don't post much, that I believe are making a living from this.

GL keep in touch - be interested in following your progress.
  • #408
  • Mar 24, 2014 5:12am Mar 24, 2014 5:12am
Quoting stewrigh
{quote} But having said that there are a few around, who don't post much, that I believe are making a living from this.
Im trying to keep a low profile this time. Ive given up teaching my methods and arguing with all the bs that fly's around here but when a retiree starts pissing away his 401k believing he is going to make it big for his family, its hard to stay silent
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  • #409
  • Mar 24, 2014 8:08am Mar 24, 2014 8:08am
Quoting M.A.C.Doug
I think the conversation we are having here exposing some truth about trading is important. It was getting ridiculous with every other member claiming huge returns. I still believe it is possible to make money, but I know how hard it is. I wouldn't recommend it to anyone if for no other reason than there are easier and more certain ways of being rewarded for your effort. I agree 100% with this statement {quote}
I think another reason that most don't believe some are making Huge returns is because THEY themselves are not or it has taken them many years to do so. So, since people naturally have an ego they have an extremely hard time believing posts from others who have not been trading longer than they have nor have blown an account claiming to be successful. There is no Forex book which states you have to trade x amount of years or blow y amount of accounts before you have the right to or can make money. But my point is just to show that because most are NOT making money the believability factor towards those that ARE is low.

"I also believe that 95%+ 'traders' lose. But I think that figure depends on how you define a trader - Most of the guys on FF are not traders - they are kids playing a new game and drop off after a few posts. But having said that there are a few around, who don't post much, that I believe are making a living from this."

Could not agree more with this statement. Too many undercapitalized accounts swinging for home runs and getting bitter when they fall short of the warning track and make the third out......If you are going to trade full time with the expectations of making this your sole source of income you need to run it and fund it like a business, not a hobby!
  • #410
  • Edited 4:41pm Mar 24, 2014 4:29pm | Edited 4:41pm
Interesting discussion.

I guess there are three groups of traders:
1. Those who have reached the point where they are profiting systematically.
2. Those who quit, having lost money, before they reach that point.
3. Those who are still on the journey, but have yet to reach either 1 or 2.

I recently read an interesting post from a senior James16 member, whose view was that a lot of profitable traders trade to build wealth ‘in the background’, rather than to directly earn a living. If trading income is overall positive, but nonetheless erratic, then it would certainly make sense to have another form of income, to pay regular household bills. I have a friend who does just that: he sells a trading course, and trades at the same time. (Having said that, I’m fully aware that the vast majority of forex vendors sell snake oil). Not having to continuously deplete the account to pay bills is obviously going to make a massive difference, over time, to the amount that is being compounded (assuming one uses fixed frac MM, or something similar). Obviously once the account gets to a certain size, it would then be possible to live off the proceeds.

There’s been a lot of aggressive debate in this thread, as to whether it’s possible to make a living from forex. Hence I think a more relevant question might be “is it possible to generate a positive income from trading?”. In some ways, that’s a very different question.

Whether a trader wins ‘big’ or ‘small’ depends not only on his capitalization, but also his MM. I attempted to illustrate how, if it was possible to make 30% p.a. ROE, then it was possible to make 900% with the same system, merely by tinkering in different ways with the MM — here.

I also believe that there’s a significant difference (both in terms of overall gameplan, and MM) between those who seek to accumulate small(ish) compounded gains over time; and those who look to use trading as a vehicle for gambling — starting with a trivial account size, that if lost, they can easily shrug off — and taking big risks in the hope of making several thousand percent gain in quick time (e.g. here and here). Personally, I see the latter as ‘gambling’ rather than ‘trading’, but if somebody does manage to string a few winning trades together, while doubling up each time, then I guess that it’s very difficult to argue with them. Each to their own.
  • #411
  • Apr 9, 2014 12:35am Apr 9, 2014 12:35am
I just noticed this thread. According from data released by the largest forex brokers, profitable account vary between 20-40 percent with accounts with large capital holdings being the most profitable.
When the facts change I change my mind, what do you do sir
  • #412
  • Apr 9, 2014 5:19am Apr 9, 2014 5:19am
Quoting Pip Anon
I just noticed this thread. According from data released by the largest forex brokers, profitable account vary between 20-40 percent with accounts with large capital holdings being the most profitable.
+1 Very true

Also I think a lot of the "losers" are new to forex and then quit after some losing trades. Education and familiarity with the market is key to success.
Any advice I provide should not be considered a financial recommendation.
  • #413
  • Apr 9, 2014 7:12am Apr 9, 2014 7:12am
Quoting Pip Anon
I just noticed this thread. According from data released by the largest forex brokers, profitable account vary between 20-40 percent with accounts with large capital holdings being the most profitable.
Absolutely Agree 100% That 99.6% number is total crap......

Pip, just wondering what you would define as an account with "large capital holdings"?......I think some here might say greater than $1,000 while others would say greater than $100,000. I trade what I would consider to be a a large account. As trading is my sole source of income now I need to place decent size trades (3 Standard Lots) to earn enough each week/month/quarter and couldn't imagine doing this with a small account
  • #414
  • Apr 9, 2014 7:32am Apr 9, 2014 7:32am
Quoting yazzie
{quote} Absolutely Agree 100% That 99.6% number is total crap...... Pip, just wondering what you would define as an account with "large capital holdings"?......I think some here might say greater than $1,000 while others would say greater than $100,000. I trade what I would consider to be a a large account. As trading is my sole source of income now I need to place decent size trades (3 Standard Lots) to earn enough each week/month/quarter and couldn't imagine doing this with a small account

I believe the "standard" in major brokerages is $10,000. I know a lot of brokerages, mainly the smaller ones, offer micro-accounts. These accounts are fine, but most of the time traders over leverage the account and liquidate because 100 pips could wipe it out.

A lot is up to the trader, but a big problem I see in retail trading is under-capitalization. Citi FX minimum account is 10K. I some accounts through LMAX, and their minimum is €10K
When the facts change I change my mind, what do you do sir
  • #415
  • Apr 9, 2014 7:41am Apr 9, 2014 7:41am
Quoting jakebvt
{quote} +1 Very true Also I think a lot of the "losers" are new to forex and then quit after some losing trades. Education and familiarity with the market is key to success.
IMO is it a marketing tactic people use, I have only come across it in print through program promotional. It's one of those things that get spread by word of mouth simply because people are too lazy to look it up.

My brother-in-law is a financial adviser and was at conference. He's licensed and knows a lot about compliance and regulations, etc, while looking for a large banking unit.

He was talking to a group of people casually about opening various accounts, etc. Then two people come in blabbering about forex this and that, "we've made millions!" Needless to say, the group went with the forex people because they heard "millions." They had no proof, no formal education..

People will heard what they wanna hear.
When the facts change I change my mind, what do you do sir
  • #416
  • Apr 16, 2014 4:32am Apr 16, 2014 4:32am
Quoting MapleLeaf
This guy can't even do a profit trading DEMO. Damn, life must be harsh for you Makiavelli. In some way I understand your indecent pay job as a poster. You need to bring some food to the table. {image}
I just had to address this before this 50 year old failure runs away with it. SEWER RAT! there's a huge gap of difference between " unrealized", " Balance ", and " Equity". What the fool posted was an open position that was in progress and it was a position I held for close to a month and just closed in juicy profits. This particular demo is tagged DEMOlympics2014, coined out by TAUTRADER to test out real traders for a full year period starting February 2014. (pic below)

If the mentally impaired failure had clicked on "Trade List" he would have seen a list of all my trades from the start of this competition, 11 trades so far without a fucking loss!

You are very correct when you said that 99% of traders loose in the forex market, in fact I think the correct figure is 99.5. Im going to repeat this once more, "FOREX TRADING IS NOT FOR EVERYONE, ONLY A VERY FEW WOULD EVER MASTER THE ART OF PROFITABLE CURRENCY TRADING"!!! To be successful at this, one needs to develop skills that the average human don't possess by default, skills like Patience, Perseverance, Analytical mind that always thinks outside the box, and most important,"BALLS OF STEEL!!. Don't even deceive yourself Mapleleaf, you can never ever excel at currency trading and its no fault of yours just a genetic problem.

So Please don't relent in your message, cause its going to save a whole lot of people the trouble you went through and i know there are a whole lot of people on FF who shouldn't be trading.

About your bet, I'm still available just in case an impossible miracle happens and you wake up with BALLS OF STEEL! Ill even make the bet a little fair for you cause you mentioned something cumulatively in the neighborhood of $36k income in a year. Ill start with USD30,000 and if I end the year with anything less than $80,000 then you win the bet.
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  • #417
  • Apr 17, 2014 3:44am Apr 17, 2014 3:44am
So far, what i feel , most of the people broke because of lack of patience.
5% survive because, they hold strong money management & trade management skill with patience even in bad periods.
Sometimes i do feel trading is 90% psychological.
Discussion is an exchange of knowledge;argument is an exchange of ignorance
  • #418
  • Apr 17, 2014 3:59am Apr 17, 2014 3:59am
I've been at it for years, too long really, my psychology is more or less there, I stopped for a few months and did other things, and it has helped.

Always remember your own goals, if someone else is claiming to make millions, dont worry about it, they may or may not be, if you make enough for that extra holiday each year, then great, if you make enough to stop working better still, any aims further than that can cause you headaches, it's not the case for everyone, but if you can give up your job by earning enough from trading, might it just be enough for most?
  • #419
  • Apr 17, 2014 4:22am Apr 17, 2014 4:22am
I read yesterday that a brokerage went on record recently to say that between 40% and 60% of their accounts were profitable. I have personally spoken with a VERY large brokerage in London who confirms that almost every account they have thats funded with more than $50,000 is in profit. In excess of 90%.

I also know from a good friend who is the head of Forex for a large Australian outfit that the churn rate (how many start, fund, lose it and leave) on the micro accounts as he called it ($1,000 or less) is over 80%. Anyone depositing more than $10,000 seldom loses and in fact they allocate a budget of around $800 per year each to retaining them as customers because they tend to win. So no sign of a 95% there...

So lets aggregate this, the bottom line is if you put a serious sum in it, and get serious, you stand a better than average chance of making a profit. Personally, I have never actully seen any formal publication provide stats on the mythical 95% thing and having done this for 17 years now and am fortunate to be part of a large team of full-time traders (who all make money) I have to say that the statistic is rubbish.

Can anyone please tell me where to find this industry accredited source that shows us 95% of FX accounts losing money? I've heard about it plenty, never seen it. I think its supported by hundreds of people who have lost, collectively bemoan the fact thus creating the illusion that everyone is a loser. This simply is not the case.
In life you get 3 types of people, those who can count and those who can't.
  • #420
  • Apr 17, 2014 5:14am Apr 17, 2014 5:14am
Quoting hanover
Interesting discussion. I guess there are three groups of traders: 1. Those who have reached the point where they are profiting systematically. 2. Those who quit, having lost money, before they reach that point. 3. Those who are still on the journey, but have yet to reach either 1 or 2. I recently read an interesting post from a senior James16 member, whose view was that a lot of profitable traders trade to build wealth ‘in the background’, rather than to directly earn a living. If trading income is overall positive, but nonetheless erratic, then...
I love how you managed to make a classification of all traders...
I fall under the 3rd type still struggling to reach point 2 or HOPEFULLY point 1!!
But I also fall under the category of people who'd be happy with a small profit... I mean it's great to live exclusively from Forex profits, but I've made peace with the fact that that is a privilege enjoyed by a few traders... The most important thing is all that sitting in front of the PC to pay off in the end...
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