Why do 95- 98% of retail traders fail

Piman78

Junior member
12 1
"The same studies show that FXCM client accounts with a balance of $10,000 or more had a profitability rate of 44.09%. The data is in line with quarterly reports that US brokers have to file with the CFTC which show that roughly 30% of retail traders are profitable while over 40% of retail traders are profitable at brokers that have a $10,000 account opening minimum."

It's possible that 30% are successful over a 3 month period of time. That just means that 70% have already failed and the majority of the remaining 30% haven't failed yet.

Over a longer period of time I think the failure rate is more likely to be around 95%
 
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SpreadDoctor

Well-known member
318 59
It's possible that 30% are successful over a 3 month period of time. That just means that 70% have already failed and the majority of the remaining 30% haven't failed yet.

Over a longer period of time I think the failure rate is more likely to be around 95%

ah Piman78 you are spot on there. just a hint of survrship bias is present in the statistics presented. so traders in those stats bust their accounts out and the % of profitable accounts goes up as they are no longer including the busted accounts which are now out of sample!

A simple analogy would be to visit Hiroshima 1 year after the bomb had landed and measure the mortality rate of residents from a sample of those that were still living and excluding the vast majority that were wiped out prior to that date. You could then go on to say that 1 year after the bomb 50% of people are in good health lol. Does that mean your chances of dying in a nuclear bomb are 50%, nope. A simple slight of hand for the naive here.
 
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mitch mconal

Member
93 3
haha you digging up these old threads make me laugh...you are a character but with a good heart (isuspect, don't know for sure)

i wouldn't have it any other way

:)
 
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foroom lluzers

Veteren member
3,611 137
haha you digging up these old threads make me laugh...you are a character but with a good heart (isuspect, don't know for sure)

i wouldn't have it any other way

:)

Funny enough he dissapeared for last 2 years , these failures talk about 95% 98% (themselves) , then they see others in their mirrors.
 

goose4

Active member
205 8
I can tell you the hard facts with betfair. The king of betting exchange. I have a friend who works in accounts for the company.

He said 99.5 percent clients lose.

The 0.5 % takes it all.

I would say similar to financials.

You need the 99 percent losers in this game . As they pay the 1 percent.I paid my dues for years.We choose to give trading a try because if successful its lucrative. Its lucrative because of these stats. So embrace them.
 
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foroom lluzers

Veteren member
3,611 137
I can tell you the hard facts with betfair. The king of betting exchange. I have a friend who works in accounts for the company.

He said 99.5 percent clients lose.

The 0.5 % takes it all.

I would say similar to financials.

You need the 99 percent losers in this game . As they pay the 1 percent.I paid my dues for years.We choose to give trading a try because if successful its lucrative. Its lucrative because of these stats. So embrace them.


just have to look at the evidence available to confirm these figures.If One studies this subject and Human psychology it is most likely true , a full understanding of psychology will reveal the rationale for failures of the 95% .Is It lucrative With 0.5 percent?How?
 
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goose4

Active member
205 8
just have to look at the evidence available to confirm these figures.If One studies this subject and Human psychology it is most likely true , a full understanding of psychology will reveal the rationale for failures of the 95% .Is It lucrative With 0.5 percent?How?

Hi buddy.

Very true about psychology.

Its lucrative because trading is a zero sub game.The money just gets transferred.from the losers to the winners.

So the betfair example.Betfair has more single trades in a day than wall street.Crazy stat yes. So the 99.5 who lose the funds go to the 0.5. hence why if successful its lucrative.
 

foroom lluzers

Veteren member
3,611 137
Hi buddy.

Very true about psychology.

Its lucrative because trading is a zero sub game.The money just gets transferred.from the losers to the winners.

So the betfair example.Betfair has more single trades in a day than wall street.Crazy stat yes. So the 99.5 who lose the funds go to the 0.5. hence why if successful its lucrative.

You have only 0.5% chance of going into the 0.5% ,trading is a probabilities games , unless you are BETFAIR spread earner.
 

goose4

Active member
205 8
I will tell you a little gossip.I found the most interesting thing I encountered with trading.

Several years ago I was considering using pro spreads as a broker.

Prospreads had a seminar of how to use there platform and products in London.It was at bloomberg.

I attended. They had technical problems there,so they decided to take a taxis back to por spreads office to continue. We all took taxis, by luck I was in the same taxi as the CEO of prospreads. So I was curious to ask him how successful traders were there. He said at pro spreads you have more pros but still most lose ,he did not give any number. Now this is the interesting part.He said the biggest account they had was a guy with 27 million pound. But he mentioned the best trader he had ever seen. It was this guy that deposited 50 K. In 8 months he turned it to 950K. He said he was remarkable. He had more losing trades than winners,trading hundreds trades per day. I asked him was it luck? The look in his face,told it all. He said no,this guy was a machine,best trader he had seen ever at pro spreads. The funny thing is once he got to 950K he withdrew the funds,he did not go for the million ( you would of thought he would) and he never heard from him again. This is why forums can be dangerous. people parrot information. The notion that its impossible to make over 20 % per year from trading is impossible,for example is common. Electronic trading has made this a lot easier,and in terms of history of trading,its fairly new tool for day traders.
 
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foroom lluzers

Veteren member
3,611 137
I will tell you a little gossip.I found the most interesting thing I encountered with trading.

Several years ago I was considering using pro spreads as a broker.

Prospreads had a seminar of how to use there platform and products in London.It was at bloomberg.

I attended. They had technical problems there,so they decided to take a taxis back to por spreads office to continue. We all took taxis, by luck I was in the same taxi as the CEO of prospreads. So I was curious to ask him how successful traders were there. He said at pro spreads you have more pros but still most lose ,he did not give any number. Now this is the interesting part.He said the biggest account they had was a guy with 27 million pound. But he mentioned the best trader he had ever seen. It was this guy that deposited 50 K. In 8 months he turned it to 950K. He said he was remarkable. He had more losing trades than winners,trading hundreds trades per day. I asked him was it luck? The look in his face,told it all. He said no,this guy was a machine,best trader he had seen ever at pro spreads. The funny thing is once he got to 950K he withdrew the funds,he did not go for the million ( you would of thought he would) and he never heard from him again. This is why forums can be dangerous. people parrot information. The notion that its impossible to make over 20 % per year from trading is impossible,for example is common. Electronic trading has made this a lot easier,and in terms of history of trading,its fairly new tool for day traders.

Indeed a very good customer , who paid a lot of spreads and rebates , they were all making a killing by him overtrading.
 
G

Guest36985

0 0
I will tell you a little gossip.I found the most interesting thing I encountered with trading.

Several years ago I was considering using pro spreads as a broker.

Prospreads had a seminar of how to use there platform and products in London.It was at bloomberg.

I attended. They had technical problems there,so they decided to take a taxis back to por spreads office to continue. We all took taxis, by luck I was in the same taxi as the CEO of prospreads. So I was curious to ask him how successful traders were there. He said at pro spreads you have more pros but still most lose ,he did not give any number. Now this is the interesting part.He said the biggest account they had was a guy with 27 million pound. But he mentioned the best trader he had ever seen. It was this guy that deposited 50 K. In 8 months he turned it to 950K. He said he was remarkable. He had more losing trades than winners,trading hundreds trades per day. I asked him was it luck? The look in his face,told it all. He said no,this guy was a machine,best trader he had seen ever at pro spreads. The funny thing is once he got to 950K he withdrew the funds,he did not go for the million ( you would of thought he would) and he never heard from him again. This is why forums can be dangerous. people parrot information. The notion that its impossible to make over 20 % per year from trading is impossible,for example is common. Electronic trading has made this a lot easier,and in terms of history of trading,its fairly new tool for day traders.

It took me 5 years to make that first £50k though!
 
 
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