90% of traders lose money? - Page 8
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  1. #71
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    Quote Originally Posted by lexys View Post
    Again, one could say that stock traders are a different group of people, as the overlap with "investing" there is much higher than is the case with futures? I don't know whether that's true in America, though ...
    That's why I specifically said stock market day traders. No question of them being investors, really. The broader research on investors is that they underperform market bechmarks. But then so too do most professional money managers.

    As for futures, it's my understanding that the 95% failure rate often cited actually originally came from futures brokers. But you have to define what "failure" means.

    One thing that has long worked against futures traders is the large fixed contract sizes. Soooooo easy to be undercapitalized. Yes, that's gotten better with mini contracts, but those are still large for some traders. You don't have the likes of OANDA where you can really customize your risk down to the penny.

    Not that everyone uses that capacity wisely, of course. ;-)

  2. #72
    jingoy is offline Superior Master Contributor and Member
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    is it 90% now, during my time it was like 95%? lol and yes what kind of failure are we talking about..

  3. #73
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    Quote Originally Posted by jingoy View Post
    is it 90% now, during my time it was like 95%? lol and yes what kind of failure are we talking about..
    Its around 90-95%, the majority keeps on failing after joining the forex market.

  4. #74
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    Quote Originally Posted by forexcrisp View Post
    Its around 90-95%, the majority keeps on failing after joining the forex market.
    Yes maybe right, but although many trader fail and might losing huge money in forex, in fact they still trade and want to making money with forex business because many trader still having positive mindset if forex as online business to making money

  5. #75
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    From my understanding of that, it is not as if they are losers all the time, but painting a clear picture of what might result to loosing which affects more persons in forex than expected.

  6. #76
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    The main reason for the over 90% failure rate in Forex is the absolute deceptive nature of the market.

    I traded (invested) stocks for over 10 years before starting Forex. The market does not use leverage, moves slower so losses can be contained quicker and positions are generally held for weekly or monthly periods. Forex is like shares on steroids, much more volatile and therefore larger losses can be generated in a significantly shorter time frame.

    Stocks are also ~70% fundamentally driven and ~30% supported by technicals. Forex on the other hand is possibly the exact opposite with Price Action being the most successful strategy.

    Price Action in FX is a must due to the absolute deceptive movement (by the insto's) of the indicators, driving new Forex traders cash straight into their accounts.

    When I first started to trade, I could not believe how often the the trades would go instantly negative (80%+) after placing a trade, you feel the need to trade in reverse of the direction that you see. This would also destroy a lot of newbie traders from the get go. Hence the need to learn price action as quickly as possible.

    To be successful at FX you have to invest HUGE time to find your edge, strategy or system. Demoing or trading a small live account with micro lots. Most people would quit before they started if they knew how difficult it really can be.

    The only real saving grace with FX compared with stocks is a lot less cash is required (leverage) trading FX as opposed to the larger sized positions required for the stock market. Most successful share traders are very dubious of the FX market.

  7. #77
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    Quote Originally Posted by Welcome to the Jungle View Post
    The main reason for the over 90% failure rate in Forex is the absolute deceptive nature of the market.
    Actually, the numbers I've seen suggest that active stock traders have a similar success/failure rate as forex traders. I'm talking here about folks in the short-term time frames. Since there really isn't long-term investment in forex, it's not really reasonable to compare it to stocks in that context.

    I traded (invested) stocks for over 10 years before starting Forex. The market does not use leverage, moves slower so losses can be contained quicker and positions are generally held for weekly or monthly periods. Forex is like shares on steroids, much more volatile and therefore larger losses can be generated in a significantly shorter time frame.
    Be careful characterizing forex as more volatile. Individual stock prices are generally much more volatile than exchange rates. For sure, the leverage used in forex can lead to the performance of forex traders being much more volatile. And leverage is most certainly used in stocks. Mainly it's day traders, but margin trading definitely happens. In fact, technically anyone who shorts a stock is using leverage.

    Stocks are also ~70% fundamentally driven and ~30% supported by technicals. Forex on the other hand is possibly the exact opposite with Price Action being the most successful strategy.
    I have a hard time agreeing with this - and I've traded both markets as well. In the long term fundamentals dominate both markets and in the short term fundamentals play a relatively minor role in both markets.

  8. #78
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    Hi Rhody, thanks for your reply.

    Sorry should have clarified more. I traded the ASX (Aust.) which is no where near as volatile in comparison to the Dow. The whole trading experience was in slow motion.... a large percentage of Stock Market "investors" are long term holders, 1, 3, 5, 10 years so the failure rate is no where near FX levels. Most active traders that are struggling to profit will transform into MT / LT holders.

    No leverage and no ability to short with my stock broker yet was still able to quadruple my account over the 10 years.

    In hindsight after now trading FX, it was like trading with both arms tied behind my back, but I didn't know any better.....

    I invested in the nu-energy / mining sector ie: Lithium, Carbon, Zinc etc. (which have now collapsed) who's stocks where 100% fundamentally driven.... no news for months on end..... price remains stagnate or edges down... positive news releases and price would jump 20 - 50% in a day.

    Currency prices are moved (1m, 5m, 15m TF) by shear volume of money in the market.

    FX is better (and worse) for its liquidity... prices are moving 24/5
    Last edited by BabyPips_001; 01-20-2017 at 06:38 PM.

  9. #79
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    Hi mate
    My name is Martin
    I've been trading for around 5 years now (Very successfully)

    here's what i can tell you
    you are basically where i was around 5 years ago


    so here's the run down


    THE STATISTICS SAY


    "95% of all Traders will Lose ALL THEIR MONEY (Blow out their account) within 3 - 6 Months of opening the account "

    and... Aint it the truth
    Most people blow it out in a month or 2

    further to this

    of the 5% Remaining
    73% of those remaining will be successful at forex and earn pretty good money
    and the remainder 27% will Earn Bloody ridiculous amounts of money (in the Billions)

    i put myself in the 73% Category at this stage
    i don't have a need to get to the 27% stage, i do not ever need that amount of money.

    but.. i digress

    back to the point
    is there truth to it...... HELL YES mate

    but you need to look at this more closely

    let's ask
    WHY DO THE 95% LOSE ALL THEIR MONEY?

    well. simple answer ..
    Because they are bloody stupid, that's why

    Most of them can be seen on those Binary Options you tube forums, asking stupid questions like
    "I have $200, how can i use binary options to make $900 a day"
    hehe.. idiots
    absolute idiots

    so then the sharks come along and start phishing, because..... (here's a trade secret),
    the sharks know they are stupid
    and..Stupid enough to take the bait

    and Forex is the same
    if you have $200 in a trade account
    and you just start off
    and you figure 0.01 lots (which is 10 cents per pip) is not really doing it for you, because after 20 pips, that you worked your arse off for, you only get $2

    these idiots ramp it up to 0.5 Lots (so.. that's $5 per pip) and after 20 pips that's $100
    sounds a bit better huh

    so , they do that
    but then the market turns on them
    they have no Stop loss in place (let's even say that it's Non Farm Payroll that's occurring) and the market spikes up 150 pips against them

    now.. 150 pips x $5 risk per pip - blown account , or ($750)
    so even if they risked half, which would be 0.25 lots, they still don't make it with $300 in the account


    Basically newbies need to understand the following things

    - The Market Makers are smarter than you are
    - You NEVER KNOW where the market it going to go (if you think you do... You're stupid)
    - Always trade with Stop Losses
    - Always Manage your Money
    - Always Manage your risk
    - Work it out mathematically and PROVE YOU CAN WIN
    - once you have a system . TEST IT THOROUGHLY before going live
    - they need to get their emotions into check
    - they need to back off on their greed
    - they need to understand it's going to take a few years to learn this trade
    - they need to understand it's going to take at least 6 months beyond the learning stage, to actually
    earn a living from this

    so.. that's why 99% of people lose

    basically, they are stupid, Non Motivated and absolutely lazy to begin with
    and want a **** load of money for no effort

    to prove how dumb they are
    they actually believe statements like
    "here is a trading robot that you can use you make limitless amounts of cash with NO EXPERIENCE and NO PREVIOUS TRADING KNOWLEDGE and NO SCREEN TIME"

    now tell me, what moron would believe this
    i mean

    if you want to be a mechanic and you want to fix a car, A NORMAL PERSON understands, you need to go to school and learn
    and you're not really going to get it until about 2 years time or so
    and you're not really going to be that good at until around the 5 year mark

    so. why should Trading be any different

    the only difference though is this

    The car DOESN'T TRY TO BREAKDOWN ON YOU on purpose and stuff you up

    the Markets however, DO hehe

    so, that's another thing you need to account for
    the Markets are intentionally trying to take money from you


    so then the final question is this

    "if that's true martin, then.... wouldn't that mean that no one can win"

    No.. it doesn't mean that.
    people can win at forex , ( I personally have ) so , that's proof

    but, the catch is this
    the Markets understand that they need to GIVE in order for newbies to KEEP PLAYING.

    Since the Markets do Give
    it means
    IF YOU UNDERSTAND HOW MUCH YOU CAN TAKE , you'll win
    if you try to take too much....

    THE MARKET MAKES AN EXAMPLE OF YOU AND WIPES THE FLOOR WITH YOUR ACCOUNT AND PUTS YOU IN YOUR PLACE and makes you feel soooo low that you don't dare make that mistake again

    that's why a lot of people lose
    but.. the Majority of people in the market, are the people who think they can get rich quick,
    that's why the figure is so high

    be cool

  10. #80
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    Quote Originally Posted by David smith View Post
    We see that most of the traders have scarcity of those qualities and having too much latrines of trading knowledge.

    I can only concur with this sentiment: it has long struck me that a plethora of aspiring traders really have far too many latrines.

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