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

  • #81
  • Jun 15, 2014 2:56pm Jun 15, 2014 2:56pm
Quoting HedgePiglet
{quote} I just laughed out loud.
Me too. There is no value in fx trading...If someone would continously be profitable for sure over ten years he would likely be the richest human on earth based on a typically high leverage, since there is little limit to the size of the bets because volume is so big....but is it really so big? No it isn't. The major part is pure speculative trading with no real business needs underlying...those who feed the biggest part of this major speculative volume and program the bot's are within limitations able to drive prices in their direction....you can see such moves every single day. And there is a second small group that does have an information advantage (insider trading) around economic news releases and central bank actions.... for a retail trader this is by far not a zero summe game, since spread and volume fee as well as roll over running against him.... and yes, you can counter part of that disadvantage with very low leverage...but than you will never gain enough to live from it, but you will still waste a lot of your time for trying it......

Do something real that creates real value... you'll be happier at the long run.
  • #82
  • Jun 15, 2014 3:14pm Jun 15, 2014 3:14pm
Quoting HedgePiglet
In an effort to deal with this lingering stink we constantly hear about how this mythical 5% of FX traders are profitable and the rest are all losers, I have discovered a public document with some VERY interesting statistics. I have long been an advocate that this 5% rumour cannot be accurate as every trader I know personally is in profit and I have finally found a reputable report that kicks the 5% in its nuts. I do not have info on exactly HOW profitable they are, the numbers only indicate IF the account has turned a profit in the previous year....
I'll Toss my 2 cents in.. I've been around for a while.. Originally back in the early days going into 2001-2002 most traders were unsuccessful and there was no transparent statistics like there is now. This is the origins of the 95% are losers, and its pretty accurate because cards were stacked against the individual trader back then.

The statics you have displayed are "required" by the DoDD Frank regulation to be posted that was added by the NFA to show that people are successful as traders or not.. Because this are open statics now.. Its to a brokers advantage to show that the people that trade with them are more winners then losers its just common business sense. If I trade to convince you to use my business but its all full of negative #'s you'll think VERY hard before going with that business.

With that being said.. Brokers in the U.S no longer have a competitive advantage.. They are not allowed to use leverage.. or offer anything different then anyone else.. So they use this statistical #'s to show people well if you come with us we have more winners so must be in the water. This numbers like someone said it just has to be in a quarter by a penny higher then your balance and BOOM your profitable..


What they DON'T have to disclose to you is.. how much are they profitable.. The traders. and when a broker also says they had a great quarter.. It is not because they have collected so much commissions!

Not everyone in Forex is a loser and someone else said that the losers are the most vocal.. People who are successful have no business in preaching to the masses. Forex is a 2 way street.. It can give and it can take. Doesn't mean it only gives to a select few, but it doesn't bend over and spreads it legs either need to put in the work and time and dedication which most people do not.. and then complain that its not working.. I don't know if anyone here watches Orange is the new black but they had an episode the guy is complaining that he lit a candle filled an application for a job and says he didn't get the job. So she asked him did you give the application to the employer? *dumb found look* well this is a lot of Forex traders they think they open an account open a position, and that money will magically arrive, and when it doesn't then it must be a scam, because money didn't walk into my account like it was suppose to.
There are those who know, and there are those who don't know.
  • #83
  • Jun 15, 2014 8:10pm Jun 15, 2014 8:10pm
Quoting freundr
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...
Education has as much to do with one's ability to trade as does shoe size.
  • #84
  • Jun 15, 2014 8:38pm Jun 15, 2014 8:38pm
Quoting EnoFX
{quote} Education has as much to do with one's ability to trade as does shoe size.
Yes and no..education in and of itself does not improve trading results, however..

1. Achieving a bachelors degree or graduate degree demonstrates that the individual is intelligent enough to demonstrate proficiency in multiple areas (mathematics, sciences, language, arts, history, social sciences etc) as well as the core program of study.

2. It shows that the individual is capable of learning new information and is capable of critical thinking skills.

3. It shows that the individual has a level of persistence or "grit" to follow through and complete a multi year challenge instead of giving up whenever difficulties arise.

All important traits to not only succeed in trading but in any endeavor in life.
  • #85
  • Jun 16, 2014 12:06am Jun 16, 2014 12:06am
Quoting casutts
{quote} Me too. There is no value in fx trading...If someone would continously be profitable for sure over ten years he would likely be the richest human on earth based on a typically high leverage, since there is little limit to the size of the bets because volume is so big....but is it really so big? No it isn't. The major part is pure speculative trading with no real business needs underlying...those who feed the biggest part of this major speculative volume and program the bot's are within limitations able to drive prices in their direction....you...
Perfect
  • #86
  • Edited 12:39am Jun 16, 2014 12:24am | Edited 12:39am
Quoting PipMeUp
{quote} 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....
Forex brokers go bankrupt if they are unable to attract new traders...
For instance, every forex broker on the planet puts on a dog and pony show (1hour free seminar) on the weekend to recruit new canon fodder to replace the "fallen"...
They must have a powerful marketing machine to survive.
The would be forex millionaire opens a 1000 dollar account. In a very short time this money will belong to the broker. Eventually the trader will quit for lack of money.
The broker puts on a show (directly of indirectly) "the water is fine, come in for a swim"... and the beautiful dance continues..
  • #87
  • Edited 2:03am Jun 16, 2014 12:46am | Edited 2:03am
Quoting Fractalist
{quote} Yes, I am aware that this is contrary to conventional wisdom. Conventional wisdom is wrong

Ugh LOL I'm sorry if I came off a bit harsh in my previous post, I am an ass and stubborn in my ways sometimes, and in no way do I mean to discourage or degrade. One person's belief doesn't make anothers wrong. Keep up the great work on your research.
It's me...
  • #88
  • Jun 16, 2014 5:20am Jun 16, 2014 5:20am
Quoting deltatrade
{quote} is the real estate market a zero sum?
i honestly dont know why would you ask that (here)?

Yes it is, not in the same time line but eventually.
.
  • #89
  • Jun 16, 2014 7:40am Jun 16, 2014 7:40am
Quoting HedgePiglet
In an effort to deal with this lingering stink we constantly hear about how this mythical 5% of FX traders are profitable and the rest are all losers, I have discovered a public document with some VERY interesting statistics. I have long been an advocate that this 5% rumour cannot be accurate as every trader I know personally is in profit and I have finally found a reputable report that kicks the 5% in its nuts. I do not have info on exactly HOW profitable they are, the numbers only indicate IF the account has turned a profit in the previous year....
Hedge why do you feel the need to share this info? You don't work for a broker do you?
  • #90
  • Jun 16, 2014 7:58am Jun 16, 2014 7:58am
Quoting Mingary
{quote} Forex brokers go bankrupt if they are unable to attract new traders... For instance, every forex broker on the planet puts on a dog and pony show (1hour free seminar) on the weekend to recruit new canon fodder to replace the "fallen"... They must have a powerful marketing machine to survive. The would be forex millionaire opens a 1000 dollar account. In a very short time this money will belong to the broker. Eventually the trader will quit for lack of money. The broker puts on a show (directly of indirectly) "the water is fine, come in for...
Hmm a broker in the USA needs $20M just to get the license. Then he needs the IT backend and the people to run the machines. Then the powerful marketing machine to lure the suckers... How many $1k suckers do they need just to survive the first year? What you say doesn't sound realistic to me.
No greed. No fear. Just maths.
  • #91
  • Jun 16, 2014 8:14am Jun 16, 2014 8:14am
Quoting PipMeUp
{quote} Hmm a broker in the USA needs $20M just to get the license. Then he needs the IT backend and the people to run the machines. Then the powerful marketing machine to lure the suckers... How many $1k suckers do they need just to survive the first year? What you say doesn't sound realistic to me.
I am sure that the cost to setup some bucket shop varies from country to country..
It is very realistic.
The most profitable business in the world is to handle Other People's Money, especially one with a strong hype and gambling flavor.
  • #92
  • Jun 16, 2014 8:28am Jun 16, 2014 8:28am
Quoting Mingary
{quote} I am sure that the cost to setup some bucket shop varies from country to country.. It is very realistic. The most profitable business in the world is to handle Other People's Money, especially one with a strong hype and gambling flavor.
I was refering to a regulated broker in western countries, not a P.O box on a microscopic island. I know that the guarantee for a regulated broker in the USA is around $20M, just to get the paper that allows him to say "I'm a broker". After you need to setup the infrastructure and pay the salaries of the people running the business. All of that isn't free. It's not possible to sustain such a business by depleting micro accounts, especially given the high level of competition.
No greed. No fear. Just maths.
  • #93
  • Jun 16, 2014 8:37am Jun 16, 2014 8:37am
Quoting Vitez
{quote} Hedge why do you feel the need to share this info? You don't work for a broker do you?
Absolutely not. But if I can have a kickback I can send my banking details?
I found what appears to be a well researched document that shows the nay-sayers are in fact idiots so I thought I would share it.

As of right now, I have yet to see a formal, or even informal document that supports the '95% are losers' concept but I am happy to wait. What they fail to comprehend is that by cutting and pasting the same vomit, doesn't lend credit to their opinion (which is all it is), it just makes them look like trolls. The lowest form of contributors to a forum. In so doing they elevate us normal folk so for my part they are welcome.

A group of us all trade profitably. So my own tagline should read '100% of FX traders live off their profits'. Apparently thats all it takes in here.

In life you get 3 types of people, those who can count and those who can't.
  • #94
  • Jun 16, 2014 8:38am Jun 16, 2014 8:38am
Quoting PipMeUp
{quote} All of that isn't free. It's not possible to sustain such a business by depleting micro accounts, especially given the high level of competition.
Don't let the truth get in the way of a good story.
In life you get 3 types of people, those who can count and those who can't.
  • #95
  • Edited 9:05am Jun 16, 2014 8:46am | Edited 9:05am
Quoting PipMeUp
{quote} I was refering to a regulated broker in western countries, not a P.O box on a microscopic island. I know that the guarantee for a regulated broker in the USA is around $20M, just to get the paper that allows him to say "I'm a broker". After you need to setup the infrastructure and pay the salaries of the people running the business. All of that isn't free. It's not possible to sustain such a business by depleting micro accounts, especially given the high level of competition.


And your point is?

Some deplete micro accounts and some deplete macro accounts..
The size of the fish does not matter if it's possible to make a buck.
Do you really believe Goldman Sachs does not have weekly meetings on how to get the most $$ out of their customer accounts?
  • #96
  • Edited 9:01am Jun 16, 2014 8:48am | Edited 9:01am
Quoting HedgePiglet
{quote} Absolutely not. But if I can have a kickback I can send my banking details? I found what appears to be a well researched document that shows the nay-sayers are in fact idiots so I thought I would share it. As of right now, I have yet to see a formal, or even informal document that supports the '95% are losers' concept but I am happy to wait. What they fail to comprehend is that by cutting and pasting the same vomit, doesn't lend credit to their opinion (which is all it is), it just makes them look like trolls. The lowest form of contributors...
If you are profitable, what are you doing here ?
If there were such a thing to actually make money in the forex, Forex factory is not the place to hang out if you are a winner.
  • #97
  • Jun 16, 2014 8:54am Jun 16, 2014 8:54am
Quoting HedgePiglet
{quote} Absolutely not. But if I can have a kickback I can send my banking details? I found what appears to be a well researched document that shows the nay-sayers are in fact idiots so I thought I would share it. As of right now, I have yet to see a formal, or even informal document that supports the '95% are losers' concept but I am happy to wait. What they fail to comprehend is that by cutting and pasting the same vomit, doesn't lend credit to their opinion (which is all it is), it just makes them look like trolls. The lowest form of contributors...
Why are you are acting like you somehow disproved the theory?

The stats you posted are rubbish, they provide no insight to the long term profitability of a trader. Being profitable over 1 quarter doesn't tell you anything about the state of a persons account since a) it started, b) over the long run, or c) what it will be in the future.

There was a link posted by delta trade which took a longer term view which you have chosen to ignore, why is that?

I don't have any clue what % of traders make money, my experience suggests though that it isn't a lot.
  • #98
  • Jun 16, 2014 9:02am Jun 16, 2014 9:02am
Quoting Mingary
{quote} If you are profitable, what are you doing here ? If there were such a thing to make money in the forex, Forex factory is not the place to hang out.
So by inference everyone in here is a loser? You do have a remarkable bedside manner.
You have made it clear you are a loser, I hope it was tongue in cheek but you commented that your largest loss on a trade was $500,000. If so, I place your input in the same category of failure.

I use the calendar events on FF religiously. This means I log in every day. This means I am fortunate to be able to scan the forums and contribute where I choose. As such I have made a few good friends in here and have learnt more than a thing or two about FX. I have learnt about new instruments, I have learnt about how many correlate and I enjoy my time here.

You have been asked more times than I care to recall why you choose to hang out here and the best you have ever come up with was describing yourself as a self-proclaimed oracle for the real world. And a teapot. I reply only out of courtesy, not because I think my answer will lighten you up nor because I particularly concern myself with your opinion. If my reasons for being here don't match with yours (this is a given, I don't wish to sound patronising) then I don't expect you will understand. I absolutely concede I have NO idea why you are here, though you have proven useful when correcting the spelling and syntax of the non-native english speakers in here. So I guess thats something.

In life you get 3 types of people, those who can count and those who can't.
  • #99
  • Edited 2:16pm Jun 16, 2014 9:07am | Edited 2:16pm
Quoting MCRotter
{quote} Why are you are acting like you somehow disproved the theory?
Because as of right this moment they are the first documents I have been able to discover that disprove the 5% myth. I'm not on a pilgrimage, but I have succeeded in outlining that this popular statistic might in fact not be true. That was it.

I admit that if the truth is closer to 30%, thats still not delightful and yes, some will argue that self-perpetuation of the statistic means everybody loses everything by year 3, but thats not what the research says. The sweeping deductions that follow from a single line on a website are the concept I battle with.

All I am saying it is would seem that as many at 46% of retail accounts in the US ARE profitable. If they were profitable for a day, that would be one thing, but the fact they are for a quarter makes a more compelling pitch than a week. I am sure you will agree.

That was all. And the fact this thread has hit the top 5 most viewed/discussed on the forum since its inception suggests that its a discussion worth having.
In life you get 3 types of people, those who can count and those who can't.
  • #100
  • Jun 16, 2014 9:16am Jun 16, 2014 9:16am
Quoting HedgePiglet
{quote} So by inference everyone in here is a loser? You do have a remarkable bedside manner. You have made it clear you are a loser, I hope it was tongue in cheek but you commented that your largest loss on a trade was $500,000. If so, I place your input in the same category of failure. I use the calendar events on FF religiously. This means I log in every day. This means I am fortunate to be able to scan the forums and contribute where I choose. As such I have made a few good friends in here and have learnt more than a thing or two about FX. I...
Thanks for validating my positive contributions. I will endeavor to keep up the good work.
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