When the Majority of Mentors insist on opening account with $10,000 without any caution to the wind, and then goes and blows it in 6months, is far devastating and makes the mind say, F That. Thats it, end of story.
And the leading cause has been identified to be overconfidence and not following their winning strategies. But the most important thing is to figure out the reason for the loss and learn from that experience.
Regarding the original question – that is the popular myth. Actually I think the myth is that 95% of newbie traders lose money. And I say myth because I have never seen any kind of official statistics from a properly conducted survey. Who knows what the truth is.
I am ever read this statement from statistic that issued from certain company, but this statistic might also not stand for all trader around the world, but only using data from these company, but I think as average if many trader especially beginner ever facing with failure included me
Maybe 90%, maybe 95% - we’ll never know for sure. The most important thing to know about a statistic presented as a percentage is - % of what exactly? And we’ll never know that for sure either.
However, given the very low obstacles to entry into trading, against the considerable mental and emotional skills required, I’d be very surprised if the failure rate was less than 95%. Though I’m not sure we know what “failure” means either.
90% of traders do not have good money/risk management plan that would help them in cutting short their losses and not investing more than they can afford to lose.
wow - you’ve had many replies!!! I can’t speak for if that stat of 90% is true or not - but i personally do believe it. I opened a demo/practice account with Forex.com when I started. After about 3 month I was impatient and put a small amount of real money in a live account. (real small - like the minimum that was allowed.) I lost it pretty fast and went back to the demo account since I obviously needed to learn more. Eventually, I had a run of 6 weeks with zero losses in the demo account, so I put a larger amount in the real account (still small - but like $1500) and the very next week I lost 1/2 In a years time I did build it back up and trippled it. Had it up to about $4800 but then I lost a ton and was back to about $750. Eventually, I got it back up to my 2nd deposit… a lot of up and downs along the way, but can’t seem to keep it there let alone make much profits… I still feel like a newbie. And I’ve been at this for over 2 years now… I did explore another demo account with another company - I forget who now, but I was so use to the Forex.com platform that I felt uncomfortable and awkward with the 2nd one I tried. One thing I learned for sure is I keep plenty of margin… I’m not disciplined with my stops, I ride waves which baby pips says only morons would do… so maybe those are some of my bad habits… I hope this helps… I really see the potential - so I’m still trying to get better. Let me know if you find any great secrets!! Also - an account manager with Forex.com advised me to practice with the same amount that I thought I might use in real money to make the practicing more realistic. vs practicing with hundreds of thousands when I knew I would only start with 1500… Not sure if that matters to anyone else. But I appreciated the advice and it really made practicing more realistic…
It is largely stated that 90% day traders lose money in long term. The study says that not more than 2% of the traders are profitable, net of the commission’s fees.
It is noticed that almost 40% of day traders leave trading within a month. 87% of day traders quit trading after 3 years. 93% of day traders quit after 5 years.
I am not sure if you will make profits in long term or would be one of those who would quit. It is right to go ahead with caution and make sure that you have vigorous risk management system.
It is interesting to note that this issue has now been under debate for over 10 years in this thread - and it seems the basic sentiment on how many fail to make the grade, or give up for some other reason, has not significantly changed during this time, i.e. the vast majority of people entering the field of retail forex trading fail.
In spite of the vast increase in availabiity of training materials, access to information, and improvements in trading platforms and broker services, the vast majority [I]still [/I]cannot make it work…surely in most other fields of human endeavour this would be a staggering situation!
I guess the core question to consider is whether this is because the forex markets are simply far too complex for the average human being to cope with or is it because the entry threshold is so low that too many start without the necessary knowledge and experience to succeed immediately - and with insufficient capital to finance learning the hard way through their own mistakes.
The true Newbie with no previous experience of these markets is truly vulnerable and to a large extent working on their own when taking on the markets - especially when it is not even easy to find genuine, thorough, reliable and comprehensive training material.
Therefore it is hardly surprising that a very large proportion of newcomers, who are lured by the promises of wealth and freedom in the adverts, fail very quickly. This means that the failure rate statistics are inevitably abnormally high in this industry and are not necessarily a [I]true [/I]reflection of the actual degree of difficulty in trading consistently.
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).
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. And the things I have failed at. I wonder if I"m part of a percentage?
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.
In a years time I did build it back up and trippled it. Had it up to about $4800 
but then I lost a ton and was back to about $750. Eventually, I got it back up to my 2nd deposit… a lot of up and downs along the way, but can’t seem to keep it there let alone make much profits… I still feel like a newbie. And I’ve been at this for over 2 years now… I did explore another demo account with another company - I forget who now, but I was so use to the 
[at best guess of course]
