Why 99% of Traders Fail – The Truth No One Tells You

It’s not really an “obscure statistic,” Franziska: among other very reliable and objective sources, it’s what the Director of the FCA said, when giving evidence to the UK’s Parliament, last year (he said the proportion of long-term profitable retail traders of spot forex is “under 1%”).

And the FCA are supervising probably the world’s best-regulated accounts (hundreds of thousands of them, because they’re not limited to either UK-residents or British citizens), so that figure can surely only be even lower anywhere else, and among brokers offering higher leverage.

So it’s pretty much factual, really, unless one thinks he was perjuring himself for some unknown reason! :smiley:

I think the reason for all the misunderstandings about this issue relates to the way that brokerages publish the winning/losing numbers of accounts they have. They publish it the way the law tells them to (in jurisdictions that have laws about this) but it’s a dreadfully misleading way. They give the proportions of winning/losing accounts measured over a 3-month period. What they don’t tell you is that most of the 15-20% of “profitable accounts” belong to investors who have done “about 1” trade during the period concerned. In other words, they’re not really “traders” at all, as you and I would understand the word.

As the FCA guy explained, in his evidence, if you look at active traders and take a 1-year period instead, the number of profitable accounts is very tiny!

Hope this helps to clarify it. :slightly_smiling_face:

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