Sometimes it's better to be wrong,to learn..
- #984,335
- Apr 23, 2015 2:22pm Apr 23, 2015 2:22pm
{quote} The correct answer was no {quote} Can you show me studies proving this, or are you just regurgitating information on which you have no true idea on whether it's true or not? Because I can show you studies proving the numbers are closer to 60:40 by quarterly. So can infintus (I may have spelled his name wrong) That saying is such a nasty rumor that just refuses to die despite evidence proving otherwise, and no evidence (other than the constant regurgitation by bloggers/supposed news outlets) ever proving it true. Almost as bad as trading...
The higher number comes from the following logic: at any moment in time a given broker has N traders. K of them are successful and can stay in the game (if he wants to with or without replenishing their funds), the N-K however disappears, ie no longer observable, but new traders start a career. N grows, otherwise the broker closes. Those no longer visible may have gone to another broker and become successful, or having lost enough money (the estimate is about 15k Average Joe loses before deciding that trading fx is not for him), joined ff and started posting funny messages
. So the 97% percent is an estimate: how many successful (ie active and profitable or withdrew more than deposited) divided by how many ever funded an account.Taleb (probably in Fooled by Randomness) spells out a similar argument to demonstrate that given enough money managers starting in a given year after a couple of years you are likely to observe a very few who are extremely successful just by chance. google for 'being warren buffet' for an article which says that purely on probabilistic arguments there would be some guy as successful as WB. Note that this does not say that he is just lucky.
You can easily simulate this even with little programming skills. Assume N traders with initial capital C_1, C_2,... each make D decisions per month (buys/sells) with P_1, P_2,... probability of winning Q amount of money (and probability 1-P_1 of losing it). The trader stops being one when he loses more than his initial capital C. Run a few thousand simulations and count how many of them have capital left.
google for markov chains and check 'survivorship bias' on wiki. hope this helps.
- #984,340
- Apr 23, 2015 2:32pm Apr 23, 2015 2:32pm
{quote} Good luck!! Best and worst part abt Forex is volatility, it may save as well as kill you but will never leave you bored.
We at least have to go lower till NY close... if not asia will test new highs i am really sure.. hope you have set an emergency stop. this ride can be tough.
