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95% Lose in FX is a Myth: % Profitability in the US last year

  • #41
  • Jun 12, 2014 7:45pm Jun 12, 2014 7:45pm
No one can be trusted when money is at stake.
Especially when it is in the broker's interest that they represent a higher % of profitable traders trading with them.
Can they create fake accounts or misrepresent the statistics(definition of profitable to them might not be the same as yours) ?
I mean who is really going to audit such claims.

What i do know that, if there are 30 to 40 % profitable traders, we will see such a good portion of forum members posting their profitable trade explorers.
But we don't see that happening.
  • #42
  • Jun 12, 2014 7:50pm Jun 12, 2014 7:50pm
currency is 0 sum system
the fact that there are more profit means somebody pour 'new' money, constantly, such as inflation
thus we see illusion of winning
beside that, every winner takes it from looser, or you can say it is a fair trade.

i don't know about that 5%, but in society, the poor guy is one with bad luck , laziness , or just plain stupid.

-nag sayer-
  • #43
  • Jun 12, 2014 8:30pm Jun 12, 2014 8:30pm
“99.6% of guitarists and musicians will fail ! They will just fail !”

“Playing guitar for a living is just a scam perpetrated by the music industry to keep gullible people buying guitars, buying equipment they don’t need and paying for “education”.”

“Look, just save your time and money and go to college instead. Get a degree in Music composition and get a nice secure job teaching kids at a school. Then you can have steady income while you pursue your real dream.”

Seems odd (or perhaps not) when we interchange the term trader for guitarist..or artist..or singer..or plumber..or chef..or personal trainer etc etc.

I wonder if there are other forums out there that have aspiring and or struggling individuals who are repeatedly told they will fail, they will never succeed and that they are fools for believing in their dreams.

Bear in mind that the “experts” offering their unsolicited “advice” have not actually succeeded in the respective field they are condemning but nonetheless feel qualified to proffer an opinion.

This begs the question of what exactly are the motives of these “kind hearted” individuals who stay on these forums and advocate that people should not do the activities that the forum was actually designed for?

What is the motive ? To ensure that people spend their money wisely ?

To prevent a 20 year old college student from “blowing” $200 in the FX market as opposed to beer and pizzas?

To “keep safe” a 30-40 year old person who decides that they want to try and do something else with their life and pursue new avenues instead of simply staying in a stagnant profession that sounded great when they entered into it 10-20 years ago ?

To prevent a retiree on a fixed income “from making a mistake with his money” To keep him/her from trying to supplement their retirement and also keep them from trying something that he/she finds intriguing, interesting and challenging ?

I’m glad we have these tireless martyrs here on FF to save us. What would the world be like without these pessimists telling everyone how naive they are and telling everyone the best way to live their life ?
  • #44
  • Jun 12, 2014 8:51pm Jun 12, 2014 8:51pm
Consistency is the challenge, not profitability. You could ask 10,000 monkeys to trade for a little while and you'll find that 30% are profitable. If I recall correctly that PhD study concluded that only 4% of traders were capable of being profitable for three consecutive quarters.
  • #45
  • Jun 12, 2014 9:58pm Jun 12, 2014 9:58pm
It's this simple:

In any field of endeavor, only a small percentage are successful.

People are naturally naive and gullible, until encountering serious life experience.
Go out an get some more life experience
  • #46
  • Jun 12, 2014 10:57pm Jun 12, 2014 10:57pm
I'm a bit skeptical of the 5% figure myself. Surely natural selection will win out? Even if only 5% are profitable, the survivors will keep trading. A new batch comes in, 5% profitable, survivors added to the previous population while losers drop out, repeat over time and you'll have ever increasing populations of successful traders. Survival of the fittest at work.

That said I dont trust forexmagnates data either, they seem to be a sell side publication with sponsorship from questionable mm brokers.
  • #47
  • Jun 12, 2014 11:24pm Jun 12, 2014 11:24pm
Quoting freundr
“99.6% of guitarists and musicians will fail ! They will just fail !” “Playing guitar for a living is just a scam perpetrated by the music industry to keep gullible people buying guitars, buying equipment they don’t need and paying for “education”.” “Look, just save your time and money and go to college instead. Get a degree in Music composition and get a nice secure job teaching kids at a school. Then you can have steady income while you pursue your real dream.” Seems odd (or perhaps not) when we interchange the term trader for guitarist..or artist..or...
Awesome post

Got Les Paul?
  • #48
  • Jun 12, 2014 11:25pm Jun 12, 2014 11:25pm
Quoting fx_man
I believe the 95% number is incorrect. I would say the number is more like 99%. Just visit any forum from the many that are out there including this one. And look at how many new aspiring traders there are and how many come and go that are trying to trade a live account and don't have one iota of what they're doing.
Why would profitable traders visit forums? Really, there is no reason. Economic calendar, calculator and a trading terminal is basically what is needed to profitable traders from their PC to make money, not visiting forums and talk to strangers etc...
Quoting Fractalist
{quote} I disagree, a bit. Sure, they make money off losers. But you are forgetting the spread, which is their main income.
You misunderstand the meaning of spread in forex. Brokers' income are commissions, not spread. Dealers can profit from spread, not "true" brokers (by "true" brokers i mean ECN brokers, who match buyers with sellers, not taking the other part of traders' positions).
  • #49
  • Jun 12, 2014 11:37pm Jun 12, 2014 11:37pm
even with statistical data all the naysayers and pessimists can do to support themselves is give opinions. nothing else.
  • #50
  • Edited 12:50am Jun 13, 2014 12:38am | Edited 12:50am
There isn't a statistic available that reflects the exact and up-to-the-minute percentage of losing traders. The number is constantly changing. With that said, my experience suggests that the number of active traders (one trade per week average) that are "losers" is over 75% for those that have been trading 6 months to 5 years, in total.

On a day to day (week to week, month to month, year to year, etc) basis, the percentage of losers consistently fluctuates depending on how well the interest earning positions do. Most retail traders are biased in taking interest earning positions (aka positive swap). Therefore if USD and JPY strengthen and AUD and NZD weaken, for example, the percentage of retail losers usually increases for the period in question.
  • #51
  • Edited 5:59am Jun 13, 2014 12:40am | Edited 5:59am
Quoting Carlsberg
{quote} just a quick question (or two) if trading is n't profitable - why are you actually posting on a trading site? are you just trolling? or are you the good Samaritan we all think you are? because if you aint trading (as in your eyes and you / we will only loose) then there is n't much pointing posting or even wasting one minute here more millionaires are said to be made during the few yrs after a recession, so you (and us?) might be better spending time elsewhere? you could even set up a site, Tradersalwaysloose.com i...
Preaching to the choir is boring. I am the William Tyndale of forex

I think you mean ==> TradersAlwaysLose.com
  • #52
  • Jun 13, 2014 12:48am Jun 13, 2014 12:48am
Quoting staw
{quote} Why would profitable traders visit forums? Really, there is no reason. Economic calendar, calculator and a trading terminal is basically what is needed to profitable traders from their PC to make money, not visiting forums and talk to strangers etc...
Some profitable traders don't visit forums and some do. For an experienced and profitable trader there's probably not much that can be learned by communicating with other retail traders on an online forum. That doesn't mean they should stop searching for unknown information that could give them an edge or improve their trading. For someone who has a good grasp on the markets and risk, it can't hurt reading online forums. It's also a great way to pass the time and keep oneself entertained.
  • #53
  • Edited 1:22am Jun 13, 2014 12:52am | Edited 1:22am
Quoting freundr
“99.6% of guitarists and musicians will fail ! They will just fail !” “Playing guitar for a living is just a scam perpetrated by the music industry to keep gullible people buying guitars, buying equipment they don’t need and paying for “education”.” “Look, just save your time and money and go to college instead. Get a degree in Music composition and get a nice secure job teaching kids at a school. Then you can have steady income while you pursue your real dream.” Seems odd (or perhaps not) when we interchange the term trader for guitarist..or artist..or...
Of course in your template you can replace "trading" with any other activity! What is meaningful is that for any human endeavor requiring "very rare talent and luck" the majority is always in perpetual delusion mode. Trading the forex seems to get most of them.
  • #54
  • Jun 13, 2014 2:02am Jun 13, 2014 2:02am
Personally I believe in numbers. And I believe and sure that in sum almost 95%(a little bit less a little bit more) of new traders and also persons who want to try themselves in any other business failed. And it is true about any person,it doesn't matter how talented he is,if somebody starts something new for him at least the first attempt is going to be looser.
But if we are speaking about successful businessman who has passed his path of defeats and failures and become professional in his field, every time it will more and more difficult for him to failure when he decide to expand his business or even start something new. And this persons are out from statistic above,they are playing in another league with different statistical results.
Success is nothing more than a few simple disciplines, practiced every day.
  • #55
  • Jun 13, 2014 4:34am Jun 13, 2014 4:34am
Just amazing. OP shows a real study and some guys come and say that is bullshit without quoting any objective's statistics.

Quote
I********** B****** - 45.3% in Profit

45.3% in Profit. Which is this broker? Interactive Brokers. Minimum Deposit? 10K.

Get out gamblers, no-brain 18 years old students.


Quote
Assuming that FX trading is a zero sum game

Yes and where is the problem?

Some majors players are not looking for making money like hedgers or Central Banks.


Quote
ou need to think long term man, especially if you want this to be a career. just cause you made money 1 year does that mean you will make money for 25-40 years?

1) Most of retail traders are daytraders. It means that they take a lot of trades in one year. You can assume that their strategy is proven. As a daytrader, you can't make any conclusions on 3 weeks or one month. But one year seems to be a good period.

2) A good strategy is a strategy which trades Market's concept and Market's concept do not change from one year to another.

3) On the same way, "just cause you lost money 1 years does that mean you will lose money for 25-40 years?"




It's funny because if you guys are thinking that only 5% make money and you're still trading, so what? You think that you are genius and you have amazing skill and that's why y'll be make some money in the future.

First lesson if you want to be profitable : Humility. I'm just sayin'
  • #56
  • Jun 13, 2014 5:06am Jun 13, 2014 5:06am
Quoting hanover
{quote} Here is a source that displays data that's very similar to the OP's. You can decide how reputable they are. However, in terms of how many traders are long term successful, I believe these figures are overstated, for at least two reasons: 1. The data represents a snapshot, rather than a long term attrition rate. For example, suppose the success rate is 35%, and let's assume that there's some skill involved in maintaining...
Just quoting this post again, in case some of you missed it.
  • #57
  • Jun 13, 2014 5:27am Jun 13, 2014 5:27am
There are 3 traders, Alex, Bobby and Cindy.
2011:
Alex +$300
Bobby -$500
Cindy -$700
Fact: 33% of them made profit in 2011.
2012:
Alex -$250
Bobby +$600
Cindy -$300
Fact: 33% of them made profit in 2012.
2013:
Alex -$400
Bobby -$500
Cindy +$200
Fact: 33% of them made profit in 2013.
Question: How many of them are really profitable traders?
  • #58
  • Jun 13, 2014 5:48am Jun 13, 2014 5:48am
Quoting Special One
There are 3 traders, Alex, Bobby and Cindy. 2011: Alex +$300 Bobby -$500 Cindy -$700 Fact: 33% of them made profit in 2011. 2012: Alex -$250 Bobby +$600 Cindy -$300 Fact: 33% of them made profit in 2012. 2013: Alex -$400 Bobby -$500 Cindy +$200 Fact: 33% of them made profit in 2013. Question: How many of them are really profitable traders?
WE GET IT.

The example you are citing is a possible way that the data supports your position. However, your example is in no way the default hypothesis for what should happen. Your example is a very specific, maximally-skewed possible outcome. Nothing further. You haven't proven anything just by proving that it is possible for the data to support your conclusions. It is just as likely that Alex is a consistent great trader and the other two suck.
  • #59
  • Jun 13, 2014 6:52am Jun 13, 2014 6:52am
1,000 traders. Only 50 are profitable. "Really"
10,000 traders. Only 500 are profitable. "Really"
100,000 traders. only 5,000 are profitable. "Really"
1,000,000 traders. Only 50,000 are profitable. "really"

At what point do the numbers start to make sense?

I started trading in 2004, that is when I first heard about the 5%, according to the myth I am one of the few profitable traders.. I would like to take this opportunity in contacting the other 4%. If they could PM me I will send them a T- Shirt, the motif will read "I SURVIVED"
Cut your Losers short and let your Winners run.
  • #60
  • Jun 13, 2014 7:00am Jun 13, 2014 7:00am
Quoting hanover
{quote}..... 2. If you look at sites like collective2, zulutrade, eToro, etc, it's apparent that many traders (possibly more than 50%) use MM systems that are unsustainable. They don't use SLs, they add to losing positions, they use martingale variants etc etc. Many of these accounts remain profitable for several months before the MM eventually catches up with them, and they crash spectacularly. It's also significant whether "profitable" includes open positions, as many traders don't exit losses, and simply wait for them to return to profit before...
Since you seem to know your stuff here, can you compare what could you tell me what is the difference between the three types of trading platforms?
I am really and always have been curious from a followers point of you, not selling your signals there - as we all know, traders are traders they can earn anywhere.
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