I won’t go into much why i love trading because i don’t want to bore people, i am just a beginner and have done some live trading, but still mostly demo.
So i guess what I’m asking is if 90-95% of traders are losing money why do we trade? how do people come successful? Is it due to good risk management? So say they set a loss of 1% account on each trade but when they do get a good trade they could make 2-3% on that trade.
This ratio is based on retail traders! Pro & institutional Forex traders are making money quite comfortably! I am trading here for being a pro!
Why do people buy lottery tickets, and what proportion of them are net winners?
It’s not a perfect analogy but it’s not a terrible one, either.
One sees others getting rich, and those are the ones who get all the publicity.
Most people buy tickets fairly regularly, occasionally get a small win, and lose money overall.
Also, in the case of trading, there’s an enormous industry constantly bombarding the public with information telling them it’s easy, so that people buy products and services, and a big industry of fake brokers pretending to on the customer’s side and exploiting the fact that most of their customers don’t even know what a brokerage really is, and don’t realise that they’re just betting with the odds heavily against them. And both those industries are very poorly regulated and routinely get away with all kinds of seriously deceptive things that wouldn’t be tolerated in other areas of life.
Yes, Luke - those of us making our livings this way can all see really clearly from your posts here what your level of professionalism is.
I continue to trade because its a passion of mine, regardless of financial outcome. The possibilty of financial reward lured me in at first, but my love for the challenge trading presents keeps me in the markets.
Simply put, I believe the 5% of successful traders are the traders that managed to persevere and continued trading thru the many losses and many years it takes to reach that level of success.
I don’t know how accurate that 90-95% number is, but the reason most traders lose money is because they more times than not will be on the wrong side of the trade, Example, as of today the strongest trend is in the CADJPY , while this pair is in a strong uptrend, I can with confidence tell you the majority of retail traders are short this pair. It is the same mentality that will have you betting RED on a roulette wheel after Black comes up three straight times.
Stick to daily and 4hr charts, don’t try to pick tops or bottoms, Trade with the Trend , and do not follow the crowd. Do these things and you may avoid being part of that 90-95% statistic
Pros have proper risk management to protect them from losing their capital. Moreover, the approaches used by pros is completely different than those of retail traders in the sense of profit target and use of stop loss orders
There are three types of traders; hedgers, large speculators, and small speculators. And all of them are exposed to 70-90 of the total open interest. (Commitments of Traders - Wikipedia)
And if 90-95% of the traders are losing money, I’m guessing who would be the losers. The commercial traders should not lose as they must be making money to be the surviving members of the business makers. But what else is the losing factor and who would be the losers from such a guessing?
Those are the percentage who came from thinking they can win forex overnight and become millionaires. But keep in mind that the rest 5% does amazing trade and knows the value of forex.
Very good advice, Dennis. I am one of those people that tends to make the mistake of trying to pick tops and bottoms. For example, often times the price gets to a resistance area and I tell myself, “It just HAS to turn around here and go the other way! I’m going short now!”. And so I enter and it turns out most of the times it will not turn around to go down but instead it continues to go up! It frustrates the heck out of me. And the crazy thing is that I continue trying to trade tops and bottoms even though it has not worked for me! (But luckily I am using a demo account). I don’t know why I can’t get myself to look for higher highs or lower lows (basically trading with the trend) and trade in that direction. As I said, when the price gets to a S & R area then I ALWAYS end up telling myself, “There’s no way it will keep going up, it just HAS to turn around any moment now!” I guess I just have a hard time believing that when it is in a trend, that it will keep on trending. For some reason I keep expecting the price to turn around and go in the opposite direction anytime it reaches a S & R area.
Maybe one day I will learn. 
Robo trades
I don’t know how to use these sites, but they seem quite valuable.This Laughing Charlie’s advise was really spot on in every area. I have never found a US broker that is ethical as far as trading against their clients. I finally connected up with Finviz in Finland and they legitimately make their money on trading volume. But as soon as I got going they were forced out of the US market. They sent us over to Tallinex who was also soon forced out. I have no idea what is going on in these cases. Tallinex transferred me to Capital City Markets and they are really good also.
I have found out I only became successful when I learned principles that went contrary to “Accepted wisdom”. Like every thing else unless you know something unique many ideas will ruin you. Is it true that picking tops and bottoms will ruin you? Sure, unless you know what your doing! Trading Forex will ruin you unless you know what your doing.
The most basic answer to the original question is that we all hope we’ll be part of those 5% that do make money. We strive, we hope, we work toward it, but we don’t always succceed.
Well said.
I think its important to remember that even the top 5% of traders had to take their losses and pay their dues.
Failure is only truly failure when its accepted as final. Temporary failure doesnt mean you have failed. It means your on your way. Its the price we all have to pay for success.
Keep going without accepting temporary failure as final, and eventually you will succeed.
Good luck and happy trading to everyone.
The people who are losing in this business due to lack of knowledge, experience and interest, forex is good and lucrative business but also risky and tough. Only few are getting success who are performing this business after having good knowledge and interest.
In general it’s newbies who lose money. Trade because you still end up in the profit. If the traders were to see that with forex money is only lossing then such a trader won’t even try trading.
It occurred to me to ask you why you still trade, robotrades?
I mean, I did say why I still trade, but since you are here and interested in trading you surely have your reasons too. Will you share them?
Those who have decided to stay on forex seem to be certain of their powers or are ambitios people. For others there’s nothing to do on forex without those qualities.
I trade because I like it and it’s fun haha and yes who wouldn’t want to become rich from it haha personally my plan is to keep some of my profits to go to building my account from my winning trades and a % to go in to a charity pot of a few charity’s I like.
I guess I don’t have the normal out look on trading but it would be good to get it up to level where it was like a second income but not something I need to depend on if that makes sense but if my account was much bigger then my charity pot would be bigger 
I think most people get into trading naive and you only stay in if you are gutsy enough to take a few punches. People with guts, tend to believe they can beat the odds, 90 - 95% quit. The ones who do not, are not quitters.
Good Question and actually quite a worthwhile one at that. It isnt so much a case of a hard division line between those that are in the 95% and those that are in the 5%, but maybe more along the lines of a math problem that has been handed out. maybe initially only 1% of students get it right. Then you take the same or similar tests every single day. some students study a bit more and pass. Some students refuse to learn - or learn the wrong stuff or whatever. After a week or a month or 5 years 5% of students pass the test or any equivalent problem… and so in this way - those that learn and correct their bad habits and gain years of experience gradually become part of the 5% (and of course it may not really be 5% but that just seems like a nice number to use).
Some traders mean well - but find themselves continually trading against the trend or trading too much or trading more to recover an earlier loss, and so they end up in the 95%, and then try and learn to stop the bad habits.
Yes of course all traders think they will not be part of the 95% and that’s fine, learn from your mistakes, but you will continually remain in the 95% if you continually feel the need to touch a hot stove to find out if its hot. You may not get burned today, or tomorrow, but you will get burned.
Another aspect which may or may not be true, but is worth considering is the strategy. It is very unlikely, that coming into forex trading, and studying it and practicing demo for months, that you are going to develop or stumble on a wonderful strategy, a holy grail, and hence rely heavily on what you believe you have found. But this may very well be true for a few select traders. Maybe the truth lies something closer to the fact that you need to understand the strengths and weaknesses of different approaches, how strategies may work or fail and use them as appropriate. But most of all … stop doing a few key bad habits and you will start having an improved level of success. Apply a few good habits and your success improves a bit more. I am not sure if all the successful traders (and I mean successful for years and years ) regard themselves as always learning. I am not sure if they reach a point where they just trade without anymore learning, but certainly I would imagine that you can only gain by learning long term.
I trade because i’m greedy and ambitious. Maybe i have inferiority complex. I really don’t know. I just want to achieve financial freedom. So that i may have more time with my loved ones and give them a good life?
People who are successful have 2 attribute.
Risk management is essential but too subjective to be quantify
Risk management may be an illusion. I’m not too sure.
Risk reward ratio are different for different win loss ratio.
Get the combo right you make money.
Get the combo wrong be prepared to die and WILL yourself back to life.