How about retail business? 90% fail rate?
Agreed! That’s definitely something to consider as well. 
yeah, If it easy, then most of people in the planet are billionares!
:18:
Im sure most of them in the planet are billionaires,
2012
yeah, show me the $$$$
happy trading!
All you Guys are Awesome! I’m an English teacher in Tokyo. At the moment I’m on my lunch break reading your posts about cars and learning young…
I wanna be a successful trader
So I can understand car talk!!!
you’re very welcome! To me FX is a great investment vehicle to lead you become financial freedom in 7-10 years. Best of luck and happy trading!
Just jumping on late on this thread to have a little bad stats rant. I apologise in advance if I sound rude and even more sorry that this will be a bit disjointed as my writing skills are pretty poor!
This thread is full of bad stats up until page three where someone posted actual stats from Oanda the retail broker.
“95% of traders loose their money” This is said everywhere with absolutely no evidence to back it up at all. Then people go on to say that “Oh its actually closer to 1.5% of people that are making a living!”
These numbers come from nothing.
Remember 67.342% of all stats are made up! 
So KingKaivar came closest to answering the question really. It is not only 5% of traders that are profitable in the retail sector.
There will be traders who make a living trading forex. I’m here just because it seems like a really good experiment. As ClarkFX said earlier he has made some money consistently. I am committing a lot of time and effort to this simply because it is worth a go to potentially make money with nothing but my own handwork and a very small starting cost. It’s a possible low start up cost business and that is why I am interested. In this current economic climate I can’t exactly go and grab a 500K loan to open a bar. This is the safest business to throw myself into.
2 Years ago when I first looked into getting into futures the first thing I went looking for were the statistics from brokers and independent studies on the profitability of traders. I found the results to be very close to what Oanda are presenting. Approximately 1/3 of retail traders are profitable over significant periods of time. This is better odds of starting up your own profitable restaurant or taxi company.
My own opinion is this is a business. I will only succeed if I put in the time and effort. It is just like every other business most people will fail, people will lie and deceive you in forex just as they do in all businesses. (Just check out Wholesalers! Seriously google Wholesalers and see the amount of BS that is online trying to take peoples cash in rip offs.)
I have found that on forums like this people will lie. In this thread there will be multiple people claiming to be making a living most of them will be lying but some will not. Don’t let the liars turn you away.
Do you think Richard Branson would be boasting his record sales when he was starting out? No, the people making the money are making the money not browsing forums and asking people to give them praise. They don’t need praise they just closed a trade making 200%+ profit on their initial risk.
Rather than posting about how they are the new big winner of the year on a forum they will be working hard at their business. They will be reflecting on trades not posting signals on a forum. They will be chilling out rather than charging people to come to their lectures for $500 a person. However there are really successful people that will put themselves out there to help us learners but they are generally buried under mountains of crap threads made to stroke the posters ego.
Take a look on Forex Factory in their systems threads. Nearly every thread will start off with someone saying how much experience and success they have. Then they post there system trading stochastic crosses in time with the moon cycles. They get angry and insult people that ask questions that may bring doubt on their methods. Then they loose big and leave, naturally the egomaniac won’t admit it they will claim the forum is getting to negative and they will take their system where it is appreciated.
Anyway on a more positive note take a look on a site like etoro open book etc. Where traders post their live trades automatically. You will see there are plenty of people that are profitable over periods longer than a year. You will also see the 100%+a month people crash and burn.
Anyway sorry for the rant! Just don’t give up if you want to do this and have the effort and energy to back it up its the same as any other business.
You can be the man with the hotdog stand, the small cafe owner or the founder of a multinational restaurant chain. Time and effort and a bit of luck in finding the right information is what we need.
Woolo,
The problem is you’re working with very vague stats. What defines a profitable trading account? There is no regulation defining how these stats are determined. Some brokers will include inactive accounts, or ones that have just gained interest but haven’t really taken a trade.
I had a friend who worked for Zulu. Their stats on their website claims (last time I checked) a profitability rate of over 50%+ for sure; I think somewhere around 70-80%. BUT talking to my friend, he stated almost NO ONE came out profitable in the long run. Over 90% of the followers lost money in the long run. (I can explain why, but that’s another rant for another time)
Then how could they post a different statistic for public viewing? Easy, by playing with numbers. Now, I’m not an accountant, and I can’t provide the technicals unfortunately. But I have talked to enough “insiders” if you will about performance, and public numbers will vary in the trader’s favour, by a substantial amount.
Consider this, with strict regulations on accounting and book keeping procedures, companies are still able to play around with the numbers enough to turn an unprofitable company into a profitable one. How hard is it, really, for a broker to play around with their numbers so that it favours clients and attract potential clients?
Like you said, time and effort (and resources) are what you need for any business venture. That’s absolutely true. My experience tells me, most traders do not come out ahead after a year of work. I work/study/trade almost 10+ hours a day, and have been for the last 3 years.
But that’s just the thing Woolo, not many people can do that or have the time. And that’s where the 90-95% stat comes from. Not only does this include traders who actually spend time learning. This can also mean someone looking for the holy grail on one of those EA selling websites. Or looking for the perfect combination of Zulu providers. These “traders” might have just opened a demo account after seeing a Google Ad on it and thought it was their way of getting-rich-quick. If you include these kinds of individuals, doesn’t it make 90-95% more realistic?
Of course, if you were grab the stats on “serious” traders, 1+ years of solid, 2-3 hours a day, I’m sure the stats will look much more ideal. Probably sitting in the 50-70% range. BUT that fact is the majority of people still look at Forex like a game, and are hardly putting in the effort to even go through the Babypips School, before overleveraging their account (without knowing) and getting a margin call (what’s that?).
if 95% traders lose where their money goes? to banks? or to market makers?
It goes to the person taking the other side of the trade.
If you are long GBP/USD someone must be shot it, or there would be no trade.
If you win they loose, if you loose they win.
The 95% figure is completely inaccurate as further demonstrated by these stats. Brokers have to publish this quarterly, and the stats show around 27-35% are profitable.
Now when those figures are broken down, about half of them (13-17%) are profitable for an entire quarter, and from them, about half (7.5-8.5%) are profitable on back to back quarters consistently, so this 95% number is a perpetuated myth and misinformation.
Hope this helps.
Kind Regards,
Chris Capre
This is also not true in the spot market as sometimes, your mini lot order is absorbed by a large player who buys in large blocks, so while you may take a standard lot short, they may take 1000 standard lots long, with a 300 pip target, while your’s is 30. Both can make profit as you hit your 30 pip target, but then it reverses long term and hits the other 300 pip target.
Many times, you are being matched against larger block orders, so this idea that one has to win, and another loses - is not accurate.
Kind Regards,
Chris Capre
You have given the stats that half of them are profitable for a quarter (13-17%) then about half are profitable on back to back quarters (8%). That’s 8% profitable back to back quarters and 92% losing. Quite close to the 95% figure. And when you consider year on year…
Judging by stats on babypips, I’ve only seen 1 real account that is profitable on a real account of a member that posts that has been traded over 6 months profitably. I’ve seen 40+ losing real accounts from people who post on babypips, most members are 1 yr+. Seen plenty of accounts that stop being updated or the profitable at the nth attempt (but overall unprofitable including previous blown accounts) I think 95% is accurate - it might even be generous.
Hello Jack,
I think there is a confusion here and you’ve misunderstood the stats. On any given month, its 27-35% are profitable. The back to back quarters is a repeat stat, meaning can they be profitable consistently on any series of back to back quarters.
But that doesn’t track equity curve or starting balance. Meaning, they could be profitable quarter A, not profitable quarter B, but still up in overall equity from their starting balance. Then in quarter C, they could profitable again, thus ever further higher then their starting equity.
So to assume traders having a losing quarter = non-profitability of their overall trading, or are in the negative is an incorrect assumption of the stats.
Hope this clarifies the difference, but the 95% stat is simply inaccurate, and there were some brokers that were showing 40% of their clients were profitable on given months.
Food for thought.
Kind Regards,
Chris Capre
A month is pretty meaningless… With only 27% profitable over one month, the graph of traders being able to maintain profitability the next (notice I said “maintain” and not “make”… As you pointed out they don’t have to make a profit the next month to maintain profitability)… And then the next and then the next… For a series of 12 months (year) would show a very strong down trend. I don’t think it would be un reasonable at all to assume that only a third of traders who can maintain profit on any given month can maintain that for 12 months… So a third of 27% is 9% … Meaning 91% are unprofitable over a year assuming they actively trade each month for a year… The very fact that the percentages are so low for only one month is proving the general accuracy of the 90ish percent failure rate over a longer time period.
Seems like a lot of assumptions you are making here, and again, its not 27%, its 27-35% on average, with the avg. across all brokers being around 32-33%.
But it should be noted…profitability is actually increasing over the years, not decreasing. Back in the early days of my trading (2001, 2002) the numbers used to be 95%, literally that amongst brokers, only 5 to maybe 10% were even profitable. However, this number has increased tremendously over the years to what it is today, so I think this communicates a lot about profitability and that the 95% statement doesn’t really apply, and anyone stating this is just making assumptions.
But enough said - I have nothing else to say on this.
Kind Regards,
Chris Capre
Lol ok so 33% … So assuming a third of the 33% who can be profitable over one month can maintain it over 12 months is still only 11% … So 89% un profitable.
Too many assumptions…? The only assumption is the fraction of the profitable 33% that can maintain the profit over 11 more months… Given that only a third of traders can make profit in a month it’s pretty reasonable to assume that only a third of those can do it for a year.
Either way, unless you have broker data for a straight year, assumptions have to be made because a month or quarter is way to small of a time interval to qualify a trader as “profitable” in the sense that most here are thinking of… It’s just as assumptive to say 30% are profitable over a year.
I have a hunch that brokers wouldn’t be interested in releasing long term profitability information as its in their best interests to not discourage new traders from opening accounts with gloomy statistics.
What percentage of traders are long term, day traders,scalpers, swing? I’d like to see these statistics and profitability over a year for each one.
Well I might as well state my assumption lol.
Most traders are shorter term. Day/scalping. And a majority if those are unprofitable. As you move up the time frames. There are less traders there and a higher percentage are profitable.
It seems to make sense to me. A month is a sample size of approx. 10% of a year.
If we sampled 10% of a population and found that 30% are colour-blind, it would seem fair enough to say that approximately 30% of the [I]entire population [/I]is colour-blind.