So now that brokers have to report the number of winners vs losers there is still some shade of ambiguity around the numbers. Yes about 1 in 5 traders are actually making money but is it the same 1 in 5 traders making money this week as it was last week or is it a different set of traders? It is an important distinction to make, if it is the same group then clearly there is a way to make consistent profits. If, however, it is a different group of traders then there is a lot less chance if at all of being able to make profits consistently.
I think too much is read into the low statistical probability of being a winning trader. It is within everyone’s hands to make sure they are in the winning group. Just make sure that you are profitable in a demo account before you start real money trading. If you don’t make money in your first year in trading, stop trading with real money and either go back to demo or abandon trading.
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You are right that there is generally a lack of definition of what these statistics actually represent. I have sometimes tried to find out what the regulatory instructions are for this but haven’t found out much. But, whatever the formula is, I actually think the statistics would have been much worse before these were introduced because, at the same time, the authorities also capped the maximum leverage for retail accounts which drove a lot of small accounts to offshore brokers that do not report anything. But I am sure that losses amongst those types of accounts are much higher than amongst the accounts that remained with the regulated brokers.
But I don’t think the accounts concerned vary as much as you suggest. The percentages are very stable and similar across all regulated accounts. To be sure, some losing accounts will gradually become profitable and others will drop off, and new accounts are opening all the time.
But, personally, I think it is pointless to even ponder such issues. It is sufficient just to note that consistent profitability is clearly not attained by the masses and that there are concrete inherent risks of losing one’s capital. Knowing that tells a Newbie to tread carefully, thoughtfully and thoroughly as they go!
I don’t think it is any kind of important distinction at all. Beyond the fact that many people lose some or all of their initial capital, there is nothing to suggest that their performance, good or bad, can directly or specifically affect yours. Whether you personally succeed or fail is down to you alone regardless of whether 5% or 95% of other traders succeed.
Read @tommor’s post above. That is all there is to think about - are you capable of making money, not anyone else.
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I wonder how many accounts are used for hedging and are not designed to make money anyway?
I doubt very many because these are all retail accounts. Pro accounts are not included in these statistics as far as I know. I am sure the vast majority of retail accounts comprise purely speculative trading for profit.
Besides, the idea of hedging is to protect the near term downside risk of the longer term main position. Therefore they are not actually designed to lose at all, although sometimes they will do so. If the hedging account is not intended to ever make money from the near term counter moves or risks then what could possibly be the point of hedging in the first place?
There are, of course, various accounts used for different purposes including testing strategies, learning new instruments, separating long term and short term positions and some of these can lose whilst the trader’s overall accounts are positive, even across a number of brokers. But one can never know the true picture and I don’t think this changes the overall picture that these statistics are presenting us.
Covid 19 has recruited millions into social media platforms whilst isolating and/or in lockdown. Here, it’s a profitable arena for broker firms to make money from newbies by marketing their apps, whilst not revealing that most will lose all of their capital. That’ should be a criminal offence, IMO, with huge fines being imposed. It’s the same with loans, where companies are charging up to 100% APR Despicable…
The regulaters should be quite aware of this, but their intervention to control the worst outcomes, is just a drop in the ocean, because young gullible people are sucked in by the brokers’ marketing ploys. And we can see the outcome each day, when newbies introduce themselves on this site with fantasies of making money straight away.
It’s very sad that financially poor youngsters are sucked into this, as their one hope to gain freedom from money worries for them and their families.
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Louder for the people in the back!
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how much of a deterrent would you consider this (if at all) to someone(myself) who has the skills and knack for analyzing and understanding charts to make consistently accurate positions?
relatively new to trading but definitely have always been good at hypothesizing and turning understood data into useful pointers.
Based on what i understand so far of how to be successful, i think i can be profitable much sooner than the majority with a little time and discipline. Is it more likely im being overconfident or is my simple interpretation of fx more accurate and its more of an individual’s own lack of discipline, effort, attention to detail, etc that causes so many failures.
Thanks
I wouldn’t say it is a deterrent rather it is just a warning that this business is not as straight-forward as many seem to think. The loser statistics just verify that. Therefore anyone with an awareness that they need to develop the necessary skills, and are prepared to do that, should be able to achieve consistency.
However, intelligence, a logical brain, and an analytical proficiency are not the whole story. Analysing and identifying good set-ups is one thing, but trading the positions is quite another.
The emotional and psychological characteristics that come into play once real money is at risk are a very different ball-game and some writers even put psychology as the No.1 issue in what makes a good trader.
Some writers also notice that a logical analytical mind is not always a benefit. For example, if one tries to trade very short term markets, the typical movements are often totally contrary to the logical analysis and/or can reverse as quickly as they start and create great difficulty in a logical mind to absorb, accept and handle such randomness.
Confidence is a great virtue in trading, in fact it is essential in the long term. But that confidence has to be built on concrete experience of one’s total trading strategy and risk/money management rather than just a theoretical belief in one’s capabilities.
Every move in the markets is different and trades can evolve in many different ways. It is not just a question of picking the direction correctly. In fact, the biggest challenge is selecting where and when to exit a position both when in profit and when in a loss.
It is true that trading is very much like a casino owner. The objective is that in the long term there is a net profit. Some trades (customers) will win and others will lose. It does not really matter which specific trades (customers) win or lose as long as the management controls ensure a net profit.
The most common emotional negatives stem from a frustration born from trades not working out as expected and trying to retrieve losses. Oversizing, angry trades, revenge trades, hanging on to losers, grabbing quick profits just to seal a gain, etc, these are all devils that tempt us and are best overcome by sticking to a strict discipline.
Based on what you say, you seem to be in a good position to start your journey. Just keep a watch on the emotional side and maybe you will indeed get “there” in the fast lane! 
trading obviously more accessible now .Are the majority of these stats traders these days, or just people hoping to make quick money which leads to negative or blown account
Thanks a lot for the thoughtfulness of your reply, and I’d have to say i agree 100%! One of the main things i also saw from traders who were at or past where i want to be, was to be very attentive of both the psychological role in the market as well as my own psyche while trading. Ive won a few demo trades off basic knowledge and intuition, but my intent is to formulate the best possible trading plan i can for my pair(s) and stick to it as rigorously as possible in order to properly evaluate it.
You saying it as well is confirmation, as this is one of the main reasons I want to fully understand each component of my plan (like time frame? trade time intervals? i forget the term) so that i start out with a plan as closely suited to me as i can for the first of many versions.
I think the main emotions i’ll have to deal with are containing my excitement/ overconfidence and seeing entries that arent really there.
Question, I said pair(s) because i want to start off mastering my main pair NOKUSD, but i am aware it is an exotic. With regard to my current stage of demo trading and developing a consistently profitable plan, do you think it would be more beneficial to learn NU along with a major? Also if you have any other tips opinions or expertise about things like leverages, candlesticks, etc, they wont go to waste here 
Thanks again!
That is an unusual choice. On my broker’s screen (which quotes it as USDNOK) it shows wide spreads which makes it very expensive for short term trades in volume. Maybe not so critical on long term positions off, for example, daily charts…
It is not a pair I am personally familiar with but, being an oil economy there does seem to be a loose correlation with crude oil prices. I’ve attached a chart of USDNOK with WTI overlay showing this. So it might be worth also keeping an eye on crude for any trending.
But I must admit, looking at this on an hourly chart, I think it can be bit of a roller-coaster. I’ve also attached a one-hour chart showing many hourly candle pairs reversing up and down. I wouldn’t feel comfortable with that.
I think a couple of more familiar pairs might be easier to handle and develop your strategies. You could, for example, pick a USD-based and a JPY-based pair or take the current pair suggested by the SW thread here by Dennis. At least that is usually a trending pair and offers some good pull-backs at times too! 
Leverage should not really be an issue if you are keeping your risk exposure within conservative limits. If your overall risk across open positions doesn’t exceed around 2-3% then I think leverage will not be a danger. High leverage is only really a danger if it is abused by using it to open unacceptably high positions (and risk) with respect to account capital.
Candles can be useful but I don’t personally find any great value in them on timeframes less than daily. I think it is not wise to just learn some candle formations and just blindly take them at face value. They tell a story of how the day’s price movement has evolved from start, through high and low, to close. It is worth trying to analyse what this is telling you. One way to do that is to also look at the hourly chart for additional insights, for example, did the high come before the low of the day and has there been a significant intraday swing from buying to selling and vice versa. This can put some flesh on the bones of the daily candlestick…
But we are digressing far from the topic of this thread which is not a good thing!
Thanks a lot, ive never been much of a forum user before so it’ll take some getting used to, youre right!
good to know, i did not spend a very long time looking at the charts since i had to use my phone until my internet got fixed. I will send you a message about other things you said as the topic should stay on topic 
Just start a new topic here then others can join in
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The traders who have got hold of the trading are earning profits consistently every week. So, there is a chance for you too. But it can be difficult for newbies to make consistent profits at times.