that old adage that 90 or 95% of traders lose must be another chestnut from brokers â 'give Us your money, WE won't lose it, but You will' the attached is a report compiled I presume by Forex Magnate's Michael Greenberg http://forexmagnates.com/us-forex-brokers-profitability-report-for-q1-2011/ who compiled the aggregated results from individual brokers the report is presumed accurate, broker reporting is a requirement of CFTC regulations: "Regulation 5.5 requires RFEDs, FCMs and IBs engaging in OTC retail forex transactions to provide customers opening an account with a prescribed written disclosure statement and its profitability report for most recent four calendar quarters, during which the RFED or FCM acting as the counterparty, maintained retail forex accounts (prepared pursuant to Regulation 5.18(i)(1))." 11 US-only forex brokers are listed, GFT has client accounts which are 39.9% Profitable and 60.1% Loss, then Oanda, and FXDD, Alpari and Interbank FX all at 30%, Gain Capital FXCM, MB Trading, FX Solutions, FX Club with an oddball Advanced Marekts who have 50 accounts: "In February Advanced Markets reported $3.4 million in client capital which divided by 50 accounts results in an astonishing average $68,544 balance per account â 18 times higher the US industry average of $3800" incidentally Oanda's drop from their previous 50% Profits is a result of Not including accounts that weren't trading, but were being credited/debited with interest paid on the account balance, Oanada remains the leading ? broker with the 25% of the list's total clients ok, so the 90/95% losers is a fallacy, or, is it only fx traders who are so profitable ? it would be very interesting to have similar reports from futures, stock etc brokers and compare results, but even at 23.5% it's a pretty good return, and although an average of all accounts, it would also be interesting to know the Big winners % Profits
Thanks for sharing. From here, it is so easy to know which posters are "broker sponser" , see how quiet the thread can be when it is conflict with the broker's interest
I think a large percentage of people fail at any endeavor that requires some quick critical thinking and logic without the safety net of a locked in salary. Carving out a life as a trader has the same challenges of carving out a life as an independent contractor or suchlike. Even if you are really good at one aspect, you will not succeed unless you are able to step back and manage the bigger picture effectively. I dont think its a 95%/5% split. A good chunk of people will succeed, an even bigger chunk will go back to whatever they were doing before.
V interesting. Emg will have to change his slogan to "23.5% of small traders lose! They lose in a spectacular fashion!"
Did this report consider only active accounts or also those accounts that are liquidated or ruined and finally terminated?
EMG IS BEING PAID BY BROKERS TO SCARE US!!! It all makes sense now. Emg is simply a mole for the full service brokerage industry intended to bring down the elite here. Shame on you emg.
I think the 90% rule probably applies to small intraday traders. Those who trade 10+ trades a day. If you include those who do very little "trading" and more holding, then those numbers above are believable.
Successful accounts keep going, but 90% unsuccesful are churned newbies. That's the discrepancy. The statistics lie in this case.
The report shows percentage of profitable accounts after 1 quarter. Looks like the average percent of profitable accounts around 30%. What is it going to be after 4 quarters? About 5% to 10%. No fallacy here.