95% Lose in FX is a Myth: % Profitability in the US last year | Page 4 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Why you lose money and will always lose 44 replies

1% Money Management is a myth, fib is a myth and so on.. 45 replies

Did we Lose any Brokers? Are we going to Lose a few? 1 reply

Vegas Profitability 3 replies

Risk Multiples and Profitability 1 reply

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

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

  • #61
  • Jun 13, 2014 7:10am Jun 13, 2014 7:10am
I believe 5% make a living.
And probably 0.0001% are ultra-millionaires.
  • #62
  • Jun 13, 2014 7:13am Jun 13, 2014 7:13am
Quoting Mingary
{quote} Preaching to the choir is boring. I am the William Tyndale of forex I think you mean ==> TradersAlwaysLose.com
you are correct on both points

your preaching does get rather boring, hopefully you won't suffer the same fate as Mr Tyndale

(and spelling never was my strong point, but fortunately abit too old to care)

anyways, if the site takes off, i'll be around for my cut of the advertising revenue
  • #63
  • Jun 13, 2014 7:38am Jun 13, 2014 7:38am
Who actually cares whether 5% make it or 95% do, because what it boils down to is the self - do you want success badly enough to prioritize it over everything else in your life and are you prepared to do whatever it takes to achieve it. This applies to any endeavor in life, but what makes forex so hard is that it is totally unforgiving, you just cannot wing it, either you put the work in, however long it takes, or it kills you off very quickly. I have no idea what the real success rate is, ie, those who do it for a living year in year out, but I reckon its not very high. Most people find out within a relatively short period that there are few ways of losing money faster than trading forex, and many more ways of making it.
  • #64
  • Jun 13, 2014 8:45am Jun 13, 2014 8:45am
Quoting domingo
{quote} 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.
If you know what to look for in an equity curve, it's pretty easy to spot martingales, with their steady rise, and occasional spikes down and equally sudden recovery to breakeven (like this); and also those traders who let their losses grow, where the 'balance' (closed trades only) and 'equity' (includes open trades) plots diverge (like this). If the traders are varying their position sizes haphazardly, it's also a possible symptom of unsustainable MM (more info here). If you're suspicious about the three platforms that I mentioned, then simply have a look at some FF trade explorers or myfxbook curves, and you'll see variations of these patterns occurring over and over again.

If you're suggesting that I sell signals on any of these platforms, then I challenge you to front up with some hard evidence, LOL. I'm a retired programmer, not a pro forex trader or vendor. Perhaps you've mistaken me for somebody else?
  • #65
  • Jun 13, 2014 11:24am Jun 13, 2014 11:24am
Quoting cat
Who actually cares whether 5% make it or 95% do, because what it boils down to is the self - do you want success badly enough to prioritize it over everything else in your life and are you prepared to do whatever it takes to achieve it. This applies to any endeavor in life, but what makes forex so hard is that it is totally unforgiving, you just cannot wing it, either you put the work in, however long it takes, or it kills you off very quickly.
Excellent post!!!!!
  • #66
  • Jun 13, 2014 11:38am Jun 13, 2014 11:38am
Quoting hanover
{quote} 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...
Wow you are really very certain for somebody who isn't a pro forex trader. I understand that you are repeating conventional wisdom, but it is wrong. A SL is just as likely to cost you money as save it for you. In trending markets they can make sense. Forex is not a trending market. If there is an adverse price excursion against you, it is more likely to bounce back than to get worse, thus negating the entire point of using stops. "Adding to losing positions..." what is wrong with that? EVERY position is a loser the moment you place the trade. You NEVER add positions during a trade ever? EVER? Why? What is wrong with getting a better price on a trade that you still believe in? What if your strategy involves an expectation that prices could get worse for a little while before they get better? What if you enter your first position with just a small fraction of the total funds to be allocated to the trade, knowing that short term fluctuations will provide opportunities to get in at better prices?

I have known people who have experience as floor traders at the CME and NYMEX. Their entire (successful) techniques for trading their own accounts involves no stops, adding to positions (even if they are losing), and 'semi-martingale' techniques. Who should I listen to? Them, or conventional wisdom?
  • #67
  • Edited 5:06pm Jun 13, 2014 3:14pm | Edited 5:06pm
Quoting Fractalist
{quote} Wow you are really very certain for somebody who isn't a pro forex trader......
Perhaps you're just looking for an argument, picking individual statements and quoting them out of context?

Just in case it wasn't obvious from my post — and the thread topic — I believe I was talking about the unsustainable MM used by hundreds of 'amateurs' in social trading sites like zulutrade and eToro: e.g. folk who refuse to exit losses until they return to profit, average down without limit, chase losses, eventually overleverage themselves trying to recover from losses. And so on. As you correctly point out, forex prices tend to range more often than not, and this allows many of them to remain profitable (and complacent) for a good while, until markets suddenly behave in a way that their testing didn't anticipate (here's an interesting example — and these folk were decidedly better than amateurs, btw). Then their dodgy MM suddenly catches up with them, causing their account to implode. But for the period that they remain profitable, br0ker records will record them as such.

I think you'll find that your buddies at the CME and NYMEX trade very differently to the way I've just described: that any averaging is done within suitable risk parameters. But even if they don't, I'll argue no further; good luck to them. It's not my money.

We could debate semantics until doomsday, saying that pro Trader X's strategy involves adding to losses, or pro Trader Y's strategy doesn't. Any talk of averaging always reminds me of the famous Paul Tudor Jones pic (and PTJ is regarded by many as being very unconventional, LOL).
Attached Image
  • #68
  • Jun 13, 2014 4:37pm Jun 13, 2014 4:37pm
Quoting Fractalist
{quote} If there is an adverse price excursion against you, it is more likely to bounce back than to get worse, thus negating the entire point of using stops. "Adding to losing positions..." what is wrong with that? EVERY position is a loser the moment you place the trade.

NO offence I know this debate is btw you and Han, BUT If you were to say that to any head trader that I ever worked for in an interview they would have politely shook your hand, thanked you for coming in, and your application would have went right into the trash before you walked out of the building. Sorry but this goes against every rule regarding risk allocation I have seen lol...and the reason is you would never be able to sell it to a potential investor. You really have to look at trading as a business for any of this to make sense.


Best
It's me...
  • #69
  • Jun 13, 2014 5:03pm Jun 13, 2014 5:03pm
That does not mean that i cant make money
The fragrance remains in the hands of those that gves the rose
  • #70
  • Jun 13, 2014 5:07pm Jun 13, 2014 5:07pm
Inserted Video
  • #71
  • Jun 13, 2014 5:16pm Jun 13, 2014 5:16pm
Quoting hanover
{quote} Perhaps you're just looking for an argument, picking individual statements and quoting them out of context? Just in case it wasn't obvious from my post — and the thread topic — I believe I was talking about the unsustainable MM used by hundreds of 'amateurs' ...
Yes, you were. Context confirmed.
My point is that you are assuming that the MM techniques you listed are 'unsustainable'. They are not. They just need to be done correctly. Telling traders to use stops always and never add to positions is a surefire way to make them lose slowly.

A stop is a secondary analysis. The primary analysis is when you first got into the trade. You decided the market was going to go a certain direction. Then it went the other way, approaching the stop level. The stop is a TRADING DECISION and should be based entirely upon an expectation that the market is going to go in the way you expect. By using a stop you are predicting that the price will continue to move in the direction it has been moving.
If you were wrong on the primary analysis, what makes you so sure that you are right on the secondary analysis? You don't get out of a trade just because you have been losing thus far. You get out because your reasoned analysis tells you that the market is not going to go the way you want. If you are close to a margin call situation, you are trading way too big. You should be able to hold onto losers for months if needed.

Adding to positions is just an acknowledgement that markets contain all kinds of energy systems, many of which elude your particular analytic technique. So instead of worrying about that, use it to your advantage. Let that uncertainty get you filled at better prices as your trade grows to the proper designed size.

So what you have characterized as defective methods used by ignorant amateurs is actually the basis of proper pro technique.
  • #72
  • Jun 13, 2014 5:27pm Jun 13, 2014 5:27pm
Quoting AgentFx
{quote} NO offence I know this debate is btw you and Han, BUT If you were to say that to any head trader that I ever worked for in an interview they would have politely shook your hand, thanked you for coming in, and your application would have went right into the trash before you walked out of the building. Sorry but this goes against every rule regarding risk allocation I have seen lol...and the reason is you would never be able to sell it to a potential investor. You really have to look at trading as a business for any of this to make sense....
Yes, I am aware that this is contrary to conventional wisdom. Conventional wisdom is wrong.

Ever hear of Rescaled Range Analysis? Heard of the Hurst Exponent? There are techniques which can determine if a time series is persistent or anti-persistent. They have been applied to many markets by people far smarter than those head traders you mention. They find that stocks, bonds, and most futures are persistent markets. They also find that currencies are mostly anti-persistent markets.

In persistent markets, it is more likely that a trend will continue than reverse, so a stop makes good sense. In anti-persistent markets, it is more likely that a trend will reverse rather than continue, thus negating the entire point of using stops.

There are plenty of distinguished folks who still believe in the nonsense of the EMH. They are wrong, and recent science proves them wrong. So I don't think you have proven anything by your Appeal to Authority. The Authorities of this world are far more inept than they appear.
  • #73
  • Jun 14, 2014 3:43am Jun 14, 2014 3:43am
Quoting Fractalist
{quote} Yes, you were. Context confirmed. My point is that you are assuming that the MM techniques you listed are 'unsustainable'. They are not. They just need to be done correctly. Telling traders to use stops always and never add to positions is a surefire way to make them lose slowly. A stop is a secondary analysis. The primary analysis is when you first got into the trade. You decided the market was going to go a certain direction. Then it went the other way, approaching the stop level. The stop is a TRADING DECISION and should be based entirely...
Interesting point of view...as seen from the institutional traders thread as far as I understood when they enter in a position it is because of their bias, educated guess, not because some indicators aligned which I believe is what a lot of standard traders use without even thinking if that indicator alignment is right or maybe wrong.. Hence they have no bias, no firm conviction and therefore use SL orders which are hit in the process. I am even thinking that all that noise about 1:2, 1:3, etc. R:R is flawed in forex. It might hold true in other markets but here it might be an artificial limit a trader is imposing on his trade. I have found that there are times that even 1:1 is hard to pull, so by following their logic those setups would be invalid and it would refrain me from entering the market. Using this logic I would be lucky if I could find 2 setups per month that qualify. But without using SL if the initial bias or educated guess was right and after some consolidation the market moved in the right direction that means that the idea of SL only needs to be readjusted and SL should be used as an emergency brake when perhaps DD falls to 50% of the capital or something like that.

Needs further thinking.
  • #74
  • Jun 14, 2014 10:33am Jun 14, 2014 10:33am
Quoting Fractalist
{quote} Yes, I am aware that this is contrary to conventional wisdom. Conventional wisdom is wrong. Ever hear of Rescaled Range Analysis? Heard of the Hurst Exponent? There are techniques which can determine if a time series is persistent or anti-persistent. They have been applied to many markets by people far smarter than those head traders you mention. They find that stocks, bonds, and most futures are persistent markets. They also find that currencies are mostly anti-persistent markets. In persistent markets, it is more likely that a trend will...
Can you post the stuff you have read please?

You have said a few things which I don't agree with, but I would like to look at what you are talking about before I pass comment, or indeed if I pass comment at all.
  • #75
  • Jun 14, 2014 11:12am Jun 14, 2014 11:12am
Quoting HedgePiglet
The 2011 figures: 43.3% in profit 41.0% 38.1% 36.2% 33.0% 33.0% 30.3% 29.9% 29.0% 26.9% 99,207 accounts evaluated. I may sound a little evangelical about this, but I see no sign of 5% profitable. The figures I have show CLEARLY that AT LEAST for the last 3 years (which many commentators have described as the worst) significantly more than a 3rd are profitable.
Reading these stats as they are given leads to wrong conclusions. It think this is made on purpose: to give real information while expecting people to draw themselves the wrong conclusion is marketing 101.

Say you have two traders A and B. A was in profit last year and B wasn't. 50% of the traders were profitable. This year A is in the loss and B is profitable. 50% of the traders are profitable. But overall over the two years they can perfectly have BOTH lost.

Imagine you take 100000 traders and let them randomly trade the market. You'll get more or less 50% winners every year. The overall result will be BE.

By shuffling the losers every year even 70% winners each year could perfectly generate an overall negative result for all of them over the time.

Also the amount made and lost are not given. A trader can martingale successfully for two years then lose it all the next year.


I'm not telling all the retailers lose. I just want to warn that these statistics are purposely flawed by not giving the correct information.

Business wise it's not possible that the retails always lose. Brokers couldn't survive. Quite a lot of brokers went bankrupt just because they were unable to maintain enough profitable traders. It's not by chance nor out of kindness they more and more offer free educative material. This FX retail market is also quite new. People learn. Losers improve and become profitable after few years. Numbers will improve. You will for sure always have more losers in the retails compared to the pro, simply because a lot of retailers just gamble a few $$$ for fun.
No greed. No fear. Just maths.
  • #76
  • Jun 14, 2014 12:02pm Jun 14, 2014 12:02pm
Statistics without context have little meaning. So 35-43% of traders in a given quarter with these specific brokers show a profit. Good to know, but what about the subset groups ?

What if they culled data and analyzed market participants who:

1. Had baccalaureate degrees ?
2. Traded with a minimum of $25,000 capital.
3. Had a current occupational income of greater than $62,500 (American upper middle class)

What say the doom and gloomers about the percentage of success in educated, adequately capitalized traders who earn an middle class income and are not dependent on trading for personal income ?
  • #77
  • Jun 15, 2014 5:17am Jun 15, 2014 5:17am
this is a link which i know of for long term.

http://theessentialsoftrading.com/Bl...tability-data/

but my personal view is that less then 1% are long term winners.

i'm waiting for an official data for 1 year profitability.
  • #78
  • Jun 15, 2014 6:13am Jun 15, 2014 6:13am
Quoting Fractalist
{quote} The people here who keep telling us that we are destined to lose seem very suspicious to me. I cannot think of any valid motive for them telling us these things. They can't be working for the brokers or banks. They want us to trade. They can't be individual traders. If these people go around saying that 95% of people lose, and they continue to trade anyway, what was the point of their 'warning' if even they won't heed it? Maybe they are ex-traders who quit. If so, why hang around FF? How bored must they be? I have an idea who these people...
and where will those profits come from if everyone is winning?

You know its a zero sum game right?
.
  • #79
  • Jun 15, 2014 1:13pm Jun 15, 2014 1:13pm
Quoting nasir.khan
{quote} and where will those profits come from if everyone is winning? You know its a zero sum game right? .
is the real estate market a zero sum?
  • #80
  • Jun 15, 2014 1:52pm Jun 15, 2014 1:52pm
Quoting Fractalist
{quote}They don't want us to know that Work + Intelligence ( ??????)+ Courage = Money. They want us to believe it is all impossible and give up.


Sorry,, nothing more occurs to me to this.

"THEY" live from the failures of the people, "THEY" want that you believe."THEY" want that you put YOUR money in the market !


What "THEY" NEVER want is: " They want us to believe it is all impossible and give up. "

0 traders viewing now