Real Reasons why Retail Traders lose money | Page 2 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Why you lose money and will always lose 44 replies

reasons why traders lose 425 replies

Real traders, real money 80 replies

The one reason that trumps all other reasons why traders lose 262 replies

5 Reasons Why Traders Lose 171 replies

Attachments: Real Reasons why Retail Traders lose money
Exit Attachments

Real Reasons why Retail Traders lose money

  • #21
  • May 31, 2014 2:33am May 31, 2014 2:33am
Quoting trader121
{quote} I would be cautious with those prop Traders; only very very few of them are profitable. A list has been released with the results of a prop trading I think it was in 2007, can't find the link right now. Of 200 Traders, only about 10 or 20 were in the green. Some lost over 200k.
Not just in forex, but for all trading activity and investments..
You are a professional, proprietary, institutional, hedge fund or bank trader until all the money is gone.
Same with retail traders.
They all just come and go in a gigantic downward spiral where all the money is transferred to banks and brokers to build ever higher office buildings.
The design is perfect.
  • #22
  • May 31, 2014 8:26am May 31, 2014 8:26am
Quoting trader121
1. Retail Traders do not have enough Information. " The foreign exchange market is a zero sum game in which there are many experienced, well-capitalized professional traders (e.g. working for banks) who can devote their attention full-time to trading. An inexperienced retail trader will have a significant information disadvantage compared to these Traders." 2. Retail Traders are a victim of the so called "Gamblers Ruin" " Retail traders are, almost by definition, undercapitalized. Thus, they are subject to the problem of gambler's ruin. In a "Fair...
1. The informational advantage is there, but it isn't as significant as you think. And there are disadvantages for lots of professional traders too.

2. If you risk a fixed % of your account on each trade, theoretically your account will never reach 0, so you will never be ruined. There are minimum order sizes, so eventually you'll have to stop if you continue to lose, but that would take a long time to reach given that there are even microlots you can trade.

3. The spread is a massive problem. Professional traders have to deal with it too. One solution is to either find a platform where you can capture the spread sometimes, or trade a market which allows you to do that. Remember that some large professionals have big orders that they can't fill at spreads that retail can.

4. It is possible to earn a high profit from a low risk.

5. Yes agree, unrealistic expectations, overleveraged, undercapitalised.

So you have given some reasons, but they aren't really the main reasons. Perhaps the best reason could be summarised at:
Retail traders do far worse than professionals because they approach it in an unprofessional way.
  • #23
  • Jun 2, 2014 11:28pm Jun 2, 2014 11:28pm
99.6% of RETAIL FOREX TRADERS lose money for the simple FACT that you cannot predict the FUTURE in a casino based scheme.

It is as simple as that.

You can try to find useless "BLA BLA BLA" explanations, but the only real fact is that you cannot predict what will happen.

The only ones who can really know what will happen are Market Makers AND/OR Vultures like the NEW YORK Hedge Funds with trillion dollars accounts that are able to manipulate the Market at their will. Those vultures really know what will happen because they create the market. They are the house.

Sure, you can have 1 profitable month... 2... 3... even 1 or 2 quarters in a row... Like roulette players have short winning streaks.

But long term, you will lose as a single individual trying to make it as a RETAIL FOREX TRADER.

That's a fact.
The Black Swan: The Impact of the Highly Improbable
  • #24
  • Jun 3, 2014 8:08am Jun 3, 2014 8:08am
Quoting MapleLeaf
But long term, you will lose as a single individual trying to make it as a RETAIL FOREX TRADER. That's a fact.
It's one thing to continuously spout your foolish gibberish over and over and over......It's quite another to also state that your nonsense is indeed a fact.

Can you please provide link or source that backs up this statement as being fact based? No of course you can't!
  • #25
  • Jun 3, 2014 1:31pm Jun 3, 2014 1:31pm
Quoting yazzie
{quote} It's one thing to continuously spout your foolish gibberish over and over and over......It's quite another to also state that your nonsense is indeed a fact. Can you please provide link or source that backs up this statement as being fact based? No of course you can't!
A good place to start is too read any post on this web site... Especially by those claiming to have found a profitable strategy..
  • #26
  • Jun 4, 2014 4:07am Jun 4, 2014 4:07am
Quoting MapleLeaf
99.6% of RETAIL FOREX TRADERS lose money for the simple FACT that you cannot predict the FUTURE in a casino based scheme. It is as simple as that. You can try to find useless "BLA BLA BLA" explanations, but the only real fact is that you cannot predict what will happen. The only ones who can really know what will happen are Market Makers AND/OR Vultures like the NEW YORK Hedge Funds with trillion dollars accounts that are able to manipulate the Market at their will. Those vultures really know what will happen because they create the market. They...
The first post in this Topic so far that really make sense to me. Glad to finally see someone knows what he's talking about.

However, just saying that it does not work is not enough. Whats are the alternatives?

I see the following three alternatives:

- Do High Frequency trading.

- Open up a Company

- Run a Forex Broker
Forex is a losers game.
  • #27
  • Jun 4, 2014 4:46am Jun 4, 2014 4:46am
Good thread but I would add to point 1. - regarding not having enough information. Most traders wouldn't know how to trade it if they had the information laid out in front of them, because they don't know how to trade. This is because they don't work hard enough to learn. This is a criticism, but there will be many reasons why they are inexperienced.

For example, you wouldn't expect someone to become an expert cabinet maker just doing a couple of hours per night. The difference being, if you do the work and get good, the forex market is virtually limitless regarding returns, unlike trying to sell furniture.

Hmm. Must be frustrating for very good cabinet makers. But which is worthier?
Gone to a better place
  • #28
  • Jun 4, 2014 6:17am Jun 4, 2014 6:17am
Quoting smikester
For example, you wouldn't expect someone to become an expert cabinet maker just doing a couple of hours per night. The difference being, if you do the work and get good, the forex market is virtually limitless regarding returns, unlike trying to sell furniture. Hmm. Must be frustrating for very good cabinet makers. But which is worthier?
Selling furniture or making cabinets is definately worthier.
Forex is a losers game.
  • #29
  • Edited 6:42am Jun 4, 2014 6:20am | Edited 6:42am
Quoting smikester
Good thread but I would add to point 1. - regarding not having enough information. Most traders wouldn't know how to trade it if they had the information laid out in front of them, because they don't know how to trade. This is because they don't work hard enough to learn. This is a criticism, but there will be many reasons why they are inexperienced. For example, you wouldn't expect someone to become an expert cabinet maker just doing a couple of hours per night. The difference being, if you do the work and get good, the forex market is virtually...
They are more sellers making money selling furniture than forex traders selling the euro.
  • #30
  • Jun 4, 2014 6:29am Jun 4, 2014 6:29am
Most retail is unprofitable because they have a completely wrong view on trading. And actually, what 90% of all the people in this and other forums, blogs and websites discuss about trading has NOTHING to do with being a profitable trader what so ever.
There are numerous believes that make it virtually impossible to be profitable. The most common ones are:

- Trading is about entries and setups. In reality, it almost does not matter at all what kind of system you trade or which types of setups you take. Almost any system can be made into a profitable one if you have the knowledge and know where to tweak a system
- Trading is about double-digit returns every month. Actually, the LONGTERM most profitable currency traders and funds don't make 10% or 20% per year. They are looking at LOW singe-percentage gains PER YEAR.
- Retail traders trade small accounts. I strongly believe that trading an account of less than 10.000 USD is almost impossible to do profitable! The psychology and mental aspect of trading a small account is going to make it impossible for 99% of all traders.

There is so much more why retail CANNOT win in this game over the long term. Trading is a business - actually it's not that hard to do profitable - but conventional trading widsom is as wrong as it gets.
Learn from yesterday, live for today and hope for tomorrow.
  • #31
  • Jun 4, 2014 6:53am Jun 4, 2014 6:53am
Quoting TraderRolf
- Trading is about double-digit returns every month. Actually, the LONGTERM most profitable currency traders and funds don't make 10% or 20% per year. They are looking at LOW singe-percentage gains PER YEAR.
Agree 100%. That's what I basically described in my first post under Point 5, Unrealistic Expectations

But let me ask you this question: Lets say you look for a target of 5% per year - which is a realistic target.

Wouldn't it make more sense to invest the money in other asset classes, for example high-yield dividend stocks, bonds or Hedge Funds? Because with those instruments, you might get similar or even better results using a lower effort.
Forex is a losers game.
  • #32
  • Jun 4, 2014 7:00am Jun 4, 2014 7:00am
Quoting trader121
{quote} Agree 100%. That's what I basically described in my first post under Point 5, Unrealistic Expectations But let me ask you this question: Lets say you look for a target of 5% per year - which is a realistic target. Wouldn't it make more sense to invest the money in other asset classes, for example high-yield dividend stocks, bonds or Hedge Funds? Because with those instruments, you might get similar or even better results using a lower effort.
And then, how many people do you think would be registered users in this forum? How many different retail brokers would exists trying to offer the 'lowest spreads' or educational websites promoting 99$ systems that will make you a guaranteed profit!?

Even targeting aroun 8-11% per year is quite realistic and achievable over the course of several years. But it's not what people want to hear...
Learn from yesterday, live for today and hope for tomorrow.
  • #33
  • Jun 4, 2014 7:28am Jun 4, 2014 7:28am
Quoting MapleLeaf
99.6% of RETAIL FOREX TRADERS lose money for the simple FACT that you cannot predict the FUTURE in a casino based scheme.
Neither currencies nor their markets are casino-based schemes. Your underlying assumption is false. The EMH has been proven false and markets are not random walks. They are very complex systems that can be impossible to predict using outdated tools, but this is just because those tools are not built to operate correctly within a dynamic system like markets. They were usually built to operate under assumed random walk conditions and an assumed normal return distribution, which do not exist. They also tend to assume gradual, continuous changes in both price and volatility, which again is not what happens in a real market.

So just use proper tools which have been built to work within a real market and prediction is possible.
  • #34
  • Jun 4, 2014 5:07pm Jun 4, 2014 5:07pm
I just thought I'd post this in case anyone believes the troll:

Attached Image (click to enlarge)
Click to Enlarge Name: maple.JPG Size: 87 KB


I'm pleased to see the most profitable traders trade with the better brokers. This comes from here: http://piphut.com/2013/11/what-perce...ex-profitable/ which I found by a simple search but I have seen other sources with similar figures. I'm pretty sure the worse the broker, the worse the profitability, follows because less experienced traders have less experience of brokers and their tricks.

It should also be noted that the greater mass of people who inhabit Forex Factory are losers. The good traders have already long gone. They don't want to mix with losers.
Gone to a better place
  • #35
  • Jun 4, 2014 5:57pm Jun 4, 2014 5:57pm
Quoting trader121
{quote} The first post in this Topic so far that really make sense to me. Glad to finally see someone knows what he's talking about. However, just saying that it does not work is not enough. Whats are the alternatives? I see the following three alternatives: - Do High Frequency trading. - Open up a Company - Run a Forex Broker
Sure, here is a post where I explain which groups of people or entities are taking advantage at any cost, and benefiting with FOREX:

http://www.forexfactory.com/showthre...es#post7458441

Some of those guys are the 0.4% of VULTURES who EARN what 99.6% of people lose. RUTHLESS CAPITALISM. Freaking crazy if you ask me.

Obviously we cannot include some guys like the Book Sellers in the 0.4%, however they still benefit in some way of this scheme and they know it. They are INDIRECTLY involved after all.

:::::::::::::::------------------::::::::::::::::
The Black Swan: The Impact of the Highly Improbable
  • #36
  • Jun 4, 2014 6:07pm Jun 4, 2014 6:07pm
Just wanted to add this, in case someone believes any of the Mythomaniac Guys or people defending the scheme and their BIG INTERESTS...

REMEMBER something IMPORTANT...

This is all about FACTS and objective numbers.

According to OFFICIAL RETAIL FOREX BROKERS stats REPORTED to the US Government, after 1 year of trading, 99.6% of people LOSE MONEY.

Sure, you can profit 1 month, 2 or 3... Even one or two quarters... BUT LONG TERM, you will always lose.

Nothing else to add. For Now.
The Black Swan: The Impact of the Highly Improbable
  • #37
  • Jun 4, 2014 8:58pm Jun 4, 2014 8:58pm
Quoting MapleLeaf
Just wanted to add this, in case someone believes any of the Mythomaniac Guys or people defending the scheme and their BIG INTERESTS... REMEMBER something IMPORTANT... This is all about FACTS and objective numbers. According to OFFICIAL RETAIL FOREX BROKERS stats REPORTED to the US Government, after 1 year of trading, 99.6% of people LOSE MONEY. Sure, you can profit 1 month, 2 or 3... Even one or two quarters... BUT LONG TERM, you will always lose. Nothing else to add. For Now.
What data/report is this? Source please?

You say that after 1 year of trading... so what??? I would expect 99.6% of people to lose in their first year of experience. The people who win consistently are the ones who don't give up (as you have) and figure it out over the course of the following years.

Just because you can't/won't doesn't mean I can't.

If the results truly are as you state, that would indicate a massive criminal conspiracy involving our governments and brokers. Such a high probability of retail traders losing cannot arise otherwise since every risk is naturally close to 50% chance of loss. So, since you believe this to be the case, doesn't this mean that the entire govt is so corrupt as to need to be changed/overthrown, for our own safety? If so, why aren't you doing THAT right now, the important thing, rather than speaking nihilism to forex traders, the unimportant thing?

I am confused about your motives.
  • #38
  • Jun 5, 2014 12:05am Jun 5, 2014 12:05am
Quoting Fractalist
{quote}

You say that after 1 year of trading... so what???

I would expect 99.6% of people to lose in their first year of experience.
Wrong. I NEVER said after THEIR FIRST YEAR of trading.

The reports show that 99.6% of people lose money in FOREX when you take a period over 1 year.

Long term, you will always LOSE. That's a FACT.
The Black Swan: The Impact of the Highly Improbable
  • #39
  • Jun 5, 2014 12:57am Jun 5, 2014 12:57am
Quoting MapleLeaf
{quote} Wrong. I NEVER said after THEIR FIRST YEAR of trading. The reports show that 99.6% of people lose money in FOREX when you take a period over 1 year. Long term, you will always LOSE. That's a FACT.
If it is a fact, please provide your source so we can all see it.
  • #40
  • Jun 5, 2014 12:18pm Jun 5, 2014 12:18pm
Quoting Fractalist
{quote} If it is a fact, please provide your source so we can all see it.
Fractalist, this troll has nothing else to add. I debated with him for a bit as well and found it useless. I'm surprised he hasn't asked you to take up his "Challange"! such a Troll
0 traders viewing now