As some folks here are aware, I'm doing a PhD at the moment. My broad focus is on trader performance, seen mainly from a Behavioral Finance perspective, though necessarily it will only be some fairly narrow aspects in terms of my dissertation. Along the way, though, I'll have some opportunities to go down a few paths of my own choosing. Since the whole question of whether 95% of traders actually fail is such a hot button topic, I figured I would take that on and share what I find. I've posted results from some initial work on my blog in the post Starting to detail forex profitability data. It's just a beginning at this stage (as the title suggests), but hopefully I'll be able to expand on it to provide some interesting insights. There's a lot of data and a lot of ways to slice and dice it. Give it a look and let me know what you think. Constructive criticism is both welcome and encouraged.
It is a fact that the percentage of losing traders is very high. The main reason for this is that as trading is a business where there is not boundaries to limit your decisions so traders take emotional trades and lose money heavily.
I don't think so. It's right that there are lower percentage of people who can be successful in trading than people who are failed in here but there is no real data that there are 95% of losing traders and 5% of people who can trade and earn in forex. But out of that, there are only few traders who won in the business not automatically making you failure too. It's depending on your own skill of trading and your money management.
Yes, you are exactly right, it depend from trading skill and mm. But like JamesBR said, it's probably less than 5% successful traders.
Whatever the statistic is but I believe maximum retail Forex traders are loser! Because, most of the retail Forex traders influence by watching huge profits possibility here! In addition, they also try to make healthy profits without proper training! But which intelligence new traders don’t follow this common trend, end of the day they become successful Forex trader!
I've been reading and it even states here on babypips that 90% of traders lose money? is this true? How can you measure that? any light on this subject would be a great help
It is true that a whole lot of traders lose money while trading. The reason is simple, they don’t follow the rule. What is the rule? Cutting losses. That is the element for good trading. Some may think that it is intelligence but it is not. If it were, I tell you today, a whole lot of traders would be making money trading not losing. So my advice to you & other traders here is to focus on protecting what you have. Do not have your focus on making money.
I don’t measure that 90% are failing in this business, although mostly are getting loss but only 60-70% are failing but rest of the people are earning huge amount from this business, I found forex lucrative and life changing opportunity.