A guide to using and recognising myfxbook accounts

We can use the information from myfxbook to find the best spreads - I mentioned previously that finding a decent spread and execution was important - its handy if you haven’t found a broker or if your broker is charging high spreads to go and change your broker (rather like finding the cheapest electricity provider):

We can see that the average broker charges around 1 to 3 pips spread per trade. Of course, they need to pay money to the interbank market so they actually need to pay themselves anywhere from 0.3 pips to 0.5 pips spread equivalent (that includes spread plus commission). Intuitively that would mean that most brokers make 0.5 to 2.5 pips per trade if they placed every trade onto the market.

Of course most brokers have an internal market, thus they match a buy order with a sell order within their own client pool. This means that they pay a 0 pip spread for the majority of orders and make 100% of the spread. When there is a mismatch with orders, lets say 70% are long EURUSD, and 30% are short, then they have a discrepency. This disccrepency can be swapped with other partner broker sites excess liquidity so again, they pay 0 pip spread. In extreme circumstances where they cannot match, they can either pay the spread and place your order on the market, or if they are a market maker, they can take it on their own books. Of course, if they are a market maker, they are very likely to have marked profitable accounts as orders they would place on the market, and losing accounts they would take on their own book. This means that overall, the broker is very unlikely to have to place many orders on the market, and they will make the majority of the spread.

This means that a broker will make anywhere from 1 - 3 pips per trade - this an average of 1.5 pips a trade. If you read my previous posts, you will note that the expectancy of the TOP myfxbook traders was 1.4 pips per trade. And of course, brokers trade a lot more often - so brokers make as much as the MOST successful forex traders with much less risk.

Of course, there is risk when you cannot place orders on the market and the broker needs to take an excess of orders on their own book. If the broker does not have enough equity to cover it, then they can go bust - however, decent brokers will have the equity and will be making megabucks from your trading.

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I hope new traders take not of this thread which you’ve obviously put a lot of time and effort into - and you don’t even work for Myfxbook!!!

You’ve answered several of the most popular and common questions asked on this forum already from you’re posts to date on this single thread, such as;

  1. What broker should I use - lowest spreads
  2. How does myfxbook work and how to read legitimate traders from fakes
  3. Are their profitable trading methods with proof

Should be a bookmarked thread IMO.

Nice one Jack

I don’t like myfxbook because I can’t use it with the better broker platforms like Oanda’s fxtrade or fxcm’s trading station. Or can I? Also I have my account broken into 4 accounts so I can position trade and still day trade in the opposite direction.

Sure you can: https://www.myfxbook.com/settings#accounts

Oanda fxtrade is second from bottom, FXCM trading station is bottom from the selection list.

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Perhaps you can show me how to install MT5 through there wizard, it doesn’t pick up my/recognize my MT5 files and brings up the error “access to path denied”


You need to right click and “Run as Administrator” then browse for the Terminal64 file. (goddamn, myfxbook should pay me)

This is what I get all the time, even when running as Admin.

Try moving the entire folder outside of programs (x86) because sometime Windows doesn’t like altering programs in there

You sir are an absolute legend…

MT5 auto installs to program files (x86)
For future reference, take the entire MT5 file out, as you said, and place it into “Local Disk”

Do 95% of retail traders fail?

This is an often asked question - do 95% of traders fail? It often gets a long argument from people. On one side, 95% sounds like a lot, and of course, if 95% fail, why bother with forex? On one hand, teachers and brokers do not really like to talk about this figure = its simply not in their interest to say that they are selling you a way to make money that will lose you money (or that you will see as a failure) in 95% of cases.

We can compare the 95% to start up figures for businesses - latest US figures for 5 year start ups is 50% are still running after 5 years. We can’t really compare the profitability to existence because profitability is not assessed - instead we have to look if the business is still running. Of course, there are numerous reasons for start ups not continuing - the business owner may move location (marriage, children etc), they may find a lucrative job that makes more than their business, they may go bust, or they may get bought out/leased out to another company (as happens to a lot of restaurants). In all likelihood, logically the ‘profitability’ figure should be higher than 50% (because people quitting the business because of moving house/kids, or being bought out is not a failure).

In forex this is simpler. A forex account that is in profit is in profit no matter whether it is running or the user has abandoned it to change jobs/look after kids etc. Therefore our job is ‘easier’ if we want to see how many traders ‘fail.’

We do need to assess the nature of ‘failure.’ Does failure mean ‘blowing the account,’ or does it also include ‘having a large drawdown’ or does it include ‘not becoming a viable means to spend the person’s time?’ The best answer I think is the latter. A lot of people trade forex hoping to make a career or make money. If they end up failing to make it as a career, or failing to make money then this would count as failure. If they are attempting to become money managers and they have large drawdowns, yet still make some money, and fail to attract clients, then this would count as failure. After all, if you classified a 'money management firm as a business start up, and that business failed to attract customers - then you would consider it a failure.

So the ‘failure’ aspect of trading is very wide. If a US based trader only makes $500 a month trading full time, then this would widely be regarded as a failure, since it is lower than the minimum wage. That trader would be better off working as a cleaner, working in McDonalds since they would make more money, and have a more reliable job. However, if a retired 68 year old man makes $500 trading part time, then they could be considered a success, since they would not get employment elsewhere, and it could be considered an effective use of his time. Likewise, a trader in Vietnam making $500 a month would eclipse a lot of professional salaries and would be considered a ‘success.’ So we need to consider that ‘failure’ is what the individual circumstances dictate as ‘failure’ and what an outside observer considers as failure. For instance, a 25 year old US based trader who makes $10 a day may consider themselves a huge success because they have a 97% winrate and 50 pips a day but any rational person would clearly see that $10 a day for full time work is anything but success.

In fact, most full time retail traders look at trading as a lucrative career. For US, UK, Canadian or Australian citizens (and other First World countries), the average full time salary is between $40-60 000. To get to this salary level you do not need to be smart, well qualified or particularly driven. As long as you turn up on work on time, are polite, and do the work required then you will get to this salary position. To make this “average” salary a trader would have to make $3800-5000 per month.

Most people go into forex to make a lot of money. This would equate to $100 000+ per year for a ‘higher bracket’ of earning. This salary is achievable in most Western Countries by working a bit of overtime, having decent qualifications, or being pals with your boss. Most UK electricians/plumbers/tradies who are competent will earn this salary. This would require a trader to make $8000 a month.

Of course, most traders want to make ‘megabucks’ trading. This would be $200 000+ per year - the same salary as a doctor, lawyer, successful salesman or successful business owner. This would require traders to make $15 000+ per month.

Looking at most retail traders - most traders will not even make the first bracket of $5000 per month. These ‘career’ retail traders would widely be considered a failure by themselves unless they are constantly ‘looking to the future’ for their profits. Certainly full time First World traders who are making $10-20 per day are very far off success. If we take the example of the business owner - what if you came across a full time business owner who was making $10 a day? Would you consider their enterprise a success or a failure - even if they consistently claimed that they would be ‘scaling up?’

Next we look at the quantitative approach for seeing whether a trader is a success or a failure. I did some research on the babypips forum recently and I will cut and paste my findings below, but basically the sample of 40 traders I found that only 4 were profitable (10%). The profitable figures are likely to be lower because only the ‘cream’ of retail traders publish their accounts live so the 95% failure is likely.

I found 40 myfxbooks that were traded on a live account in 2012/13, with a real broker, fully verified that had results for > 3 months.

I ignored accounts that were demo, traded on an unverified account, those who used an ‘unknown broker,’ or those with a history shorter than 3 months. I hope the reasons why I did that were obvious. I would have liked to restrict the accounts to those >$1000 in size, but unfortunately most people hide their account size and the sample size would have been too small to be meaningful.

Out of the 40, 35 accounts were deleted or at a loss
1 out of 40 was effectively breakeven
4 out of the 40 were profitable. Of these 4 accounts, 3 gained less than 10% ROI with a drawdown greater than 40%
The best account had an ROI of +42% with an drawdown greater than 50%. I have my research on a little .doc file but I won’t attach it because I don’t think that people would appreciate having attention drawn to them - you can after all search for them yourself.

You can debate what the deleted accounts represented, whether they were people who made millions and wanted to delete their accounts, or if they considered their accounts unsuccessful because of loss/drawdown etc and they deleted them. I believe the latter.

This would give babypips members who published their myfxbooks just under 90% failure rate.

Again you can debate whether people who publish their myfxbooks are ‘better’ traders than those who don’t. I am inclined to believe that the better traders publish myfxbooks, whereas the worse ones do not. Effectively this would mean that the failure rate for babypips traders is more than the 85%+ in the small sample that I took. I did not include the accounts that I knew of that were traded which had not been linked on babypips (all of those I know of are negative equity or effectively breakeven) which would have swung the failure rate even higher, but I thought it not fair to include those who did not publically publish their results.

So why is this different from the figures given by brokers? (FXCM figures)
Quarterly Report % Profitable % Unprofitable Total Non-Discretionary Accounts
Sep – Dec, 2009 26% 74% 22,371
Jan – March, 2010 25% 75% 19,049
April – June, 2010 23% 77% 17,771
July – Sep, 2010 23% 77% 15,023

I will frequently read posts that claim that it is 25% that is profitable therefore 75% that is a failure stating the evidence above eg: in the thread on babypips: 301 Moved Permanently

However, this arguments do not properly address the statement that 95% of traders fail to make a profit. The statement that the evidence above is addressing is that 75% fail to make a profit OVER 3 MONTHS. The original statement addresses a working life timeframe -“95% of traders fail to make a profit over the time they are trading forex”.

People who state the evidence above for some reason are not considering the difference between incidence and prevalence and are not actually ‘on the same page’ as the statement. Lets take a simple example.

“99% of people get colds” is a reasonable statement to make. What if someone produced evidence that over Jan 2011- April 2011 only 10% of people got colds, so the 99% of people getting colds is a myth. You would immediately assume that person just did not know what they were talking about, and the same applies for forex accounts. 95% of traders failing is OVER THE COURSE OF THEIR TRADING LIFE. NOT OVER A 3 MONTH PERIOD. Claiming that only 25% of traders lose is like claiming only 10% of people get colds - of course this is utter nonsense.

Myfxbook do provide stats but they are a bit flawed how they are set up - I shall enquire and try and get a better answer - I think myfxbook has 30 000 live systems so it should be an adequate sample to get accurate data on success/failure.

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I posted a while ago about the difference between a winning and a losing account. Lets review the top 8 manually traded systems that have been verified and active for over a year (8 instead of 10 because its easier to read the small print). I will deduct the ‘gain’ and concentrate on the overall ROI because that reflects the actual gain in profits. Another reason I have done this is to compare the losing systems that have lost 99% of their ROI. If I assessed losers by ‘time weighted gain’ then it would actually show up a couple of good systems that have made money, but because of withdrawals have a negative gain.

So the winning systems are systems that are traded over 1 year, do not have a custom start date, are manual and verified.

Excluding the time weight gain (which for reasons mentioned previously are misleading) the ROI for the top systems is:

  1. +465%

  2. +403%

  3. +378%

  4. +352%

  5. +325%

  6. +325%

  7. +279%

  8. +246%

Note that the systems are different from a week ago (because the systems change as it is a dynamic league table of the best systems). Also note the realistic ROI that is achieved over 1-4 years trading - this is in 100s of percent not 1000%.

We can look further into the characteristics of these systems

Note the expectation is +8.2 pips per trade (a lot higher than last weeks no doubt because of recent large moves in the yen pairs causing different systems to get higher in the ranking, with an outlier of 38 pips causing significant change).

8/8 systems win more trades than they lose. 7/8 systems have bigger losers than winners. Only one has winners bigger than losers and this is marginal (28 pips winners vs 27 pip losers).

The losing systems are shown below: as found by the search function on mybook for manual losing systems that were traded on real accounts (time is less relevant for losing accounts)

The ROI is listed below:

  1. -100.47%

  2. -100%

  3. -99.98%

  4. -99.97%

  5. -99.85%

  6. -98.6%

  7. -98.54%

  8. -98.26%

Note that there are a few -99% gain systems that have positive ROI so despite these being higher up on the search they were excluded as they were more profitable. Lets have a closer look at the results:

What we can see is the expectancy is an average of -4.3 pips per trade. 6 out of the 8 had bigger losers than winners, but actually 2 out of the 8 had bigger winners than losers. 4 of the 8 had more losers than winners, while 4 had more winners than losers,

So what can draw from this data? The data would suggest that the expectation is about +0-5 pips for a winning system, -0-5 pips for a losing system - effectively 5-10 pips separate a winner from a loser. It appears that old wisdom - ‘make your winners bigger than your losers’ does not really matter purely looking at the evidence. Win rate appears to be actually more important - if you have a better win rate you are more likely to have a winning system, although 50% still end up losers with winning trades than they lose.

The old adage from trading is that you must have 2:1 ratio of risk/reward - it does not actually appear in reality and appears just to be a ‘classroom’ type tactic. It doesn’t actually appear in any winning trading systems. It just makes you think - if these ‘teachers’ and ‘gurus’ advise 2:1 risk, how come NONE of them have made more than 246% in their trading lifetime? Many of these gurus have been trading for several years, and if they really were successful, and practised a 2:1 risk/reward, they would be within the top systems and we would see the evidence. However NONE of the systems exhibit this, which again, should make you extremely suspicious that most forex traders are being taught garbage and what you learn from them will not make you money.

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The old adage from trading is that you must have 2:1 ratio of risk/reward - it does not actually appear in reality and appears just to be a ‘classroom’ type tactic. It doesn’t actually appear in any winning trading systems. It just makes you think - if these ‘teachers’ and ‘gurus’ advise 2:1 risk, how come NONE of them have made more than 246% in their trading lifetime? Many of these gurus have been trading for several years, and if they really were successful, and practised a 2:1 risk/reward, they would be within the top systems and we would see the evidence. However NONE of the systems exhibit this, which again, should make you extremely suspicious that most forex traders are being taught garbage and what you learn from them will not make you money.[/QUOTE]

I’ve know this to be true for quite sometime now… Always seemed to cause a spirited debate when I used to mention the uselessness of chasing for risk reward.

Great post by the way…

soon, one of myfxbook staff will quit due to eliminated by new rising [B][I]myfxbook star[/I][/B] :stuck_out_tongue:

I will go back to the question of ‘how many traders fail’ with some statistics from myfxbook. If you want the summary - it is that around 89-92% of myfxbook traders fail to make profits from a statistical pool of 100 000+ accounts. This is very similar to the 40 account study I made of babypips myfxbooks. The rest of the post is demonstrating the maths I went through to work out these statistics. Enjoy!

To get to the statistics you just need to go through to the community link at the footer of myfxbook - note that these statistics are based on REAL ACCOUNTS and updated in real time so the image I post below will be out of date in the future:

Community Outlook EURUSD | Myfxbook

Taking a look at this - we note profitable accounts are 42% vs losing accounts of 47% - HOWEVER - this is current accounts and not deleted accounts - this is biased because profitable accounts are kept active, while losing accounts are deleted. This also only assesses by balance and not equity (a lot of accounts are positive in balance but negative in equity because of holding losing trades). So this 42% vs 47% is NOT a reflection of how many accounts lose money because it DOES NOT INCLUDE DELETED ACCOUNTS (which by in large are losing accounts or are considered by their owners to be failures because of drawdown, poor returns, etc etc).

More telling is the funds won $158 964 945 vs funds lost $582 835 598. Retail close to 4 x its profit. This is all the trading profits vs all the trading gains. In other words, if an account trades 1 lot of eurusd for 10 pips gain it gains $100. If it then trades a losing trade of 1 lot of eurusd for 20 pips, it loses $200. This statistic would come up on myfxbook as $100 trading profits, $200 trading losses, even though the overall loss is $100. This fact is important for understanding how the statistics are worked out.

The average account profit is worked out by dividing the total profits made (gains in total by all systems, not net profits) by the number of current systems.

The average account loss is worked out by dividing the total profits lost (losses in total by all systems, not net losses) by the number of current systems.

We can work out the number of accounts by dividing the total profits by the average system profit, or by dividing the total losses by the average system loss. Both give the answer of 26 900 (approx) active accounts. This does not include the losing accounts.

We can therefore work out that the total number of profitable accounts is 42% of 26 900, or 11 300 (approx) winning accounts. Of course, to find the ratio of winning accounts to losing accounts we need to find out how many deleted accounts there are approximately. Myfxbook gives us the average deposit - this deposit size has not changed markedly over time - currently it is $5 100 per system.

We can work out that the net loss is approx $423 871 500 aggregating all systems (total system profits of $158 964 000 minus $582 835 598). We can then divide by the total number of current systems (26 000 current systems) - we get $15 753 loss for the average myfxbook system. Of course, that doesn’t make sense that is still markedly higher than the average deposit which is $5 100. In fact it is 3.1 higher than the average deposit, which means that there must have been a significant system deletion. As you would expect, this system deletion is from losing systems.

If we assume that 100% of systems lose 100% of their money, then we can work out that there were 3.1 x as many accounts as there are now - ie: there were 82 600 accounts open at some point. Of course, we know that is not the case - we know that 11 300 are marked as winning accounts.

This means if we wanted to work out how many accounts were profitable vs losing/deleted accounts then we would need to work out how much money have the winning accounts made - we can only assume this. If you look on the trading systems tab on myfxbook and look at the ‘gain’ you will notice that there are 20 results per page. Note that we are looking at ROI and not gain - the cut off for the top 50 pages (1000 top systems) is about 20% ROI. ie: 10% of the systems achieve greater than 20% ROI, with the other 10 000 winning systems getting less than 20%. We know from looking at the top systems, that a ROI of 250%+ is a top 10 system (ie: it is a very statistically insignificant proportion). A winning average of 20% is approximate, although may be slightly generous.

I will assume that the winning accounts have made 20% profit. This means that 11 300 (number of winning systems) x 0.2 (20% gain) x 5100 (the deposit). This totals $11 526 000.

We then add this to the net loss of $423 871 498. This leaves us with a net loss of $435 397 500 which must be managed by the losers. We can then assume if these accounts lost 100% of their equity, so we divide this net loss by the average deposit. This gives 85 372 losing accounts.

If we assume the winning system average is 100% gain (this does not happen) or a $5100 gain, then we can assume the net loss that the losing systems have to endure is greater, so the number of losing systems is greater. If the winning system average is 1% then the burden that the losing systems is lower. The lowest number of losing systems there could possibly be is £423 397 500 divided by the average deposit ($5100) which is 83 000 losing systems which lose 100% of their value.

Of course it is very difficult to lose 100% of the account because of the margin call and automatic closure of positions. If we assume the average loser is 90% then there will be a minimum 92 250 losing systems. An 80% average loss will entail a minimum 103 700 losing systems. If we assume 70% average loss then that is 118598 losing systems.

Lets assume that the average winning system makes 20% ROI and the average losing system loses 70% ROI. This means we have 11 300 winning systems vs 121 960 losing systems. If we have 20% ROI winners vs 80% ROI losers, then we have 11 300 winning systems vs 106 715 losing systems.

This means that we have 9-10% winning systems with the assumed figures, with about 90% of traders failing. These figures correspond very well to the figures I made in my study of 40 babypips systems. Note that if the average losing system loses a lot less than 70% (ie: 50% average) then the number of winners is about 5% which is closer to the ‘95% of traders fail’ statement.

You also have to assume that the traders that use myfxbook or a tracking system are in general better traders than those who use no form of tracking whatsoever, even though there are bound to be some good traders who do not use them, they will be balanced out by the new and inexperienced traders who use no form of journals or tracking. The reality is that the statistics in myfxbook show that at around 89-92% of myfxbook traders fail - and this is from a sample of 100 000 + live accounts.

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This is particularly good research dear Watson! Keep it up and you’ll graduate to a full-blown detective someday!

Thanks BayernMunich = I still haven’t worked out who you are though - from South Africa, not PureMuscle, not dpaterso, so who could you be?

well into my next post

There is always a furious debate on whether demo trading is ‘worth it’ or whether live trading is something you should jump into. This post is very much on the side of saying that demo trading is useful, and does help. It will argue against the misconceptions that people have against demo trading and provide numerical proof (once again from myfxbook).

First is the misconception that demo trading is ‘easy to make millions’ and easy to be successful, while live trading is harder. The reality is that people do not make millions in demo - there is no evidence of people making demo millions trading using demo systems (unless they are using arbitrage systems that we have discussed). In fact lets look at the top 17 demo systems (because thats all that I could fit in a screenshot) of demo systems that had been trading more than one year, manually traded (not automated and arbitraged) on demo systems: I have also excluded the ones that made 4000% on one trade (because obviously that was a gamble trade) - there were only 2 of them.

47% of the active systems on mybook are demo, so there are around 11 000-12 000 demo systems - and only 14 of these were traded over 50% over a year out of 11 000 systems. This compares very similarly to the top REAL systems that I have previously posted - the top 10 real systems were +250% to +450% ROI. Basically there is no evidence that people can make millions trading demo. It seems that if you take realistic long term results (over 1 year for real and demo trading systems excluding arbitrage systems) then you will get similar results: ie: the difficulty of trading DEMO AND REAL ARE THE SAME.

Where the misconception comes from I think (this is conjecture) is because traders trade demo systems for 2-3 days, make about 10% in those days and extrapolate. They think that because they can make 10% a day on demo (over 2-3 days) then they can make 10% on real. Of course, they have not even demonstrated they can make these gains consistently on demo.

Basically, the difficulty of demo trading is AS DIFFICULT as real trading. Perhaps more so, because spending time trading for no gain (because you don’t make money in demo) is dull.

So if there are any gurus who don’t want to show their real results because of finance regulations, privacy etc, they should be willing to prove their trading through myfxbook demos (since you can easily set up a trade copier to copy onto a demo). If a guru/teacher does not even offer a demo that has been manually traded for over a year then I would be very skeptical.

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The next post I would like to talk about signal services, and whether they are worth while or not. I would like to actually do a quantified experiment about signals services to see if ‘conventional wisdom’ is correct. The conventional wisdom is that signal services are terrible and that you should learn to see if you can trade for yourself (even though 90%+ that will be a failure). There are 31 autotrade systems, so what I would like to do is to see if anyone here has access to a VPS that they wouldn’t mind using for an experiment - we link up to the top 10 signal providers and see how much they make in the next 6 months. That would give us a quantified approach to see if ‘signal services are worth it.’

Please reply to this thread if you have access to a VPS (2Gb RAM service should cover it) and are willing to contribute to our better understanding of the market.

Any thoughts on this:

MetaQuotes Warns Brokers About Working with Tradency, Tradeo, Myfxbook & ZuluTrade | Forex Magnates

Yes, it seems like Metaquotes aren’t very happy with these trade verification sites using their software. They have already blocked the auto update option on myfxbook.

In the end it all comes down to money - myfxbook are making a tonne of advertising revenue, but I don’t think that was the problem. Metaquotes only started blocking myfxbook when myfxbook started offering a copy trading service that competed with Metaquotes copy trading service which obviously directly affects metaquotes revenues. I’m sure they will fight tooth and nail to get a share of the cash before they resolve anything.

As far as i remember reading from yesterday, myfxbook found a way around it and now trades are going flawless…
see these allegations are totally without ground…and completely unprofessional.