90% of traders lose money?

My own impression, for what it’s worth (if anything): I don’t think it’s because the forex markets are too complex for the average person to cope with; I think it’s because there are almost no entry barriers (and in these days of increasing high-speed internet availability, worldwide, that’s even more true than ever); and I think that hand-in-hand with that it’s even easier for “forex-marketers/vendors” to target their ever-increasing promotional materials at those least suited to forex-trading. The survival of the marketers’/vendors’/“brokers’” businesses depends on their being able to do this, and they do it very well.

I agree.

It ought to be mentioned, though, that there’s also (probably) a statistical and societal reality at play, here, in that if broadly and loosely speaking (let’s say, for argument’s/illustration’s sake) 95% “fail” and 5% “succeed” (no definitions offered!), the proportion-skew is such that if the number of participants “succeeding” [I]either doubled or halved[/I], that wouldn’t be discernible, anyway. The further away from 50/50 the “success”/“failure” proportions are (and whoever’s figures you believe - and we can agree that they’re nowhere near 50/50? - the [I]more[/I] true that is). :slight_smile:

Could it be possible that a large portion of the percentage that fail are simply made up of younger adults with a hyped up gamblers mentality. They have a bit of spare time on their hands and a few hundred dollars in their pockets , seeking instant profits and not treating trading as a serious long term endeavour, with an attitude of arrogance and entitlement, very little work ethic, insufficient common sense - and very possibly intelligence . To even include them and label them as “traders” is absurd. They probably should not be in charge of a savings account let alone a trading account.
There is also an enormous body of people who are trading from desperation, trying to trade their way out of hopelessness and better their lives. Whilst this is admirable they are often doing it with the last dregs of their savings, with neither the financial capacity nor emotional stability - due to their predicament - to withstand such an undertaking. Most definitely a road to ruin.
If this colossal percentage of people is removed from the equation then what you would be left with would be a more realistic demographic from which the percentage of " real trading failure" could then possibly be ascertained.
People ultimately are responsible for themselves and their own decisions. The Internet is full of lies, nonsense and rip off merchants… and not just in regards to trading. People aren’t forced to do or believe anything and unfortunately you can’t always save people from themselves. People get themselves into all kinds of financial strife in life…mortgages they can’t afford to pay, credit card debt, wasting money on a million things they don’t want or need and so much more. Poor decisions and losing money are not just limited to the world of trading.
We all make decisions in our lives which can improve our situations or make them worse. Often the wrong decision will make us stronger and better in the long run.
The people that don’t “make it” in trading perhaps aren’t supposed to? We all probably couldn’t “make it” in many areas…we are just not suited .
People pay good money to “try” to do many things in life and either give up, fail, or realise that they didn’t really want to do them after all.
I have accepted the ten million things I will never be able to do. :slight_smile: And the things I have failed at. I wonder if I"m part of a percentage? :slight_smile:

^^^ One of the best and most realistic posts I’ve ever had the pleasure of reading, in this forum.

Most people stop at failure.

I think that’s the general idea?

Hey Jezz, can you elaborate on that?

Not being a smartas$, im diggin in your mind.

Why is it a question?

Oh just a play on words.

However, I would assume when one decides they have personally failed [in the context of not achieving their own goals] they should stop and move on.

There is of course a difference between failing at an endeavour; and failing to achieve personal objectives. The latter, in my view, [I]is true failure[/I].

This could very well be true in forex. I have heard from reliable sources, though, that among active traders in the stock market is a high percentage of retirees. From what I’ve read in the research, stock day traders have pretty comparable success/failure rates as retail forex. That suggests it’s not an age thing. The gambler thing could apply to both - along with the desperation, and other factors.

Interesting - I have posted here and elsewhere for some time now that newbies refraining from daytrading would significantly improve their chances of surviving long enough to become successful.

Thank you Lexys :):):slight_smile:

This is the whole point.

It is not just a question of whether the failure rate is 90%, 95% or even higher. The real question we need to ask ourselves is: Is it relevant to me?

The more these high percentages are thrown around the greater the stigma attached to them and the greater the fear that it instils in newcomers.

As FF writes in her excellent post above (somewhere), there are many reasons why traders drop out after a short time. But are these really all so relevant? Do we really need to place such a great emphasis on these percentages?

We could draw a similar conclusion if we consider playing the piano (for example). I am sure that most kids at some stage take music lessons and learn some rudiments of playing keyboards. But we could be dramatic and claim that: [U][B][I]" Did you know that up to 99% of all people starting piano playing fail to become concert pianists! In fact the vast majority don’t even reach the stage of playing for their own entertainment!!!".

[/I][/B][/U]But does this mean that piano playing is so complex that hardly anyone is capable of mastering it? I am sure if PMH is nearby he would confirm that playing an instrument demands a lot of practice and theory but that it is certainly within the capabilites of the majority of people to reach a personally satisfactory level if they are genuinely interested and prepared to put in the effort - even if they don’t ever become professionals.

Rather than dwelling on the size of the crowds that give up for whatever reasons, it is far more beneficial just to concentrate on one’s own education and practice and see how trading is suited for oneself - surely that is all that really matters?

I personally feel that most traders like the stigma attached to the high failure rate - regardless of how accurate or true it may be in reality. Being able to succeed in this industry represents success, and how better to measure your success by using the most valuable asset in the word…wealth. At the end of the day success in trading, be it FX or any other asset class, is measured by wealth [profits]. This is not a business where you are manufacturing products, creating a global supply chain, pushing a global brand or growing an asset base. Trading is concerned around money - [I]an asset poor, cash rich approach[/I].

All you have to do is look at all the films that have been made around Wall Street and/or London Stock Exchange. In every possible concept, trading has been glamorised as a cash rich business. A lucrative industry for the highly educated and the risk taking individuals.

In short, I think a more achievable success rate would ruin the dream!

Interesting perspective! You may be right but I can’t help thinking that you are looking at this from the other end of the spectrum - i.e. from those that have already reached consistency. OK, maybe they are somewhat entitled to feel some pride in their achievement (although personally I see few successful traders that actually make a big public number out it, in fact quite the opposite)

However, I think here, on BP, we are more concerned with those that are starting out on their “road to wealth” and I don’t really feel unrealistic deterrents such as “95% of people fail” are all that helpful. Rather, it is important to be realistic about one’s own capabilities and suitabilities to this business.

I totally agree with you Manxx…however

Looking at this from a different prospective again [I like to provoke questions :)] - Does the high failure rate which is made public actually not act as a deterrent, but rather attract the right people with the right mindset? Clearly though, having the right mindset does not mean you will be successful, but you have to be at the very least an inquisitive individual to even think you stand a chance (and this is a very strong skill to maintain as a professional trader)

I’m starting, more and more, with experience and by looking at what people say and who seems to do well and who doesn’t, to think that the people who become successful independent/retail traders are probably [I]mostly[/I] people who would have become successful at whatever other self-employed career they tried.

This is very true, what you said separates the wheat from the chaff. I suppose the key underlying factor for success in all business ventures, be it trading or any other is that of determination.

Determination and a clear mindset is, at the end of the day, the common denominator for success.

No problem! That, surely, is the purpose of a forum? :slight_smile:

To be honest, I have no idea what motivates most newcomers to forex beyond what I have read from the posts of Newbies here.

But from those posts that I have read, I would conclude that most are drawn by the prospect of being able to earn good money, maybe even a fortune, rather than just to take up a challenge to beat the norm for the industry - but I would certainly agree that a strong, persistent winner instinct is essential in trading!

But there are many posts where people state their reason for starting forex trading is a hope and a dream that it will, for example:

  • provide financial indendence
  • get me out of a job I hate
  • give me freedom to work for myself
  • pay for my kids’ education
  • pay off my debt burden
  • build up a retirement fund

but maybe there are also some who might say:

  • to prove I can beat those 95% losers

I agree with you, and appreciate, that having the right mindset is crucial - and whichever way one interprets the 95% is not so important as whether it is a positive for you or a negative! :slight_smile:

Now, I think this is a quote from 'How to sell FX courses that don’t work to Joe Bloggs" haha :slight_smile:

You are right there! :smiley:

The last I heard, Joe Bloggs had dropped out of the forex education market as a prospect, and was buying lottery tickets and looking for an MLM opportunity …