Hello everyone,

Is this this percentage real? Only 5% of the traders are making money on the Forex market and 95% losing? Wow

Does anyone has an explanation? Or anyone knows the causes for this?

Look forward to hear your opinions.

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  • Planetary cycle - loooooooooooooooooooooool

    U made my day Romano :)))))))))

    Anyway interesting point of view. I partially agree with you on what you said. Thanks for your thoughts.

  • Hello Arenoosh!

    fighter with a "good chin" refers to a fighter with tremendous ability to absorb punishing blows to the head without being struck unconscious, which can also be called "having a beard", "good whiskers", "granite chin" or "iron chin".

    Although such fighters have been knocked out, it is rare. There is a dispute as to the physiology of having a "good chin". Some believe that a strong neck that resists a sudden angular acceleration of the head is what makes a "good chin". Supporters of this belief point to S.G. and PeterJCP, both of whom are strong and had large muscles around the brain and neck. Others believe that it is genetics that decides whether a fighter will have a good chin or not.

    A fighter with a "bad chin", "china chin", "suspect chin", or "glass jaw" refers to fighters with limited ability to absorb punishment to the chin or jaw. Many forexstreet clubfighters and journeymen may have glass chins, although it may depend on weight class or sometimes "shoulders". Some forex experts, believe it to be a mindframe.

  • I ask again how many Try with H.E.A.R.T & S.O.U.L. I mean commit them selves to perfecting their chosen craft what ever it may be ? ;-}}}

  • Hi Arenoosh,

    Here's my thruppence worth. Firstly, I would want that statement to be backed up  by proper statistical data, which nobody who has made that statement (that I know of) has yet been able to provide. So, IMHO, thus far it's a myth. It may be true and it may not be true. However, the closest that I personally have been able to get to an understanding of that statement came up recently when FXCM (I think) provided an interesting interraction with their clients with a set of purported data on how their thousands of clients trade. If you can get hold of that info, you'll find it very interesting indeed. I am not a client of FXCM and to be honest the only broker on the planet I trust is where I hold my account, which is at Dukascopy.

    But lets get down to the heart of the issue which is successful trading. There are some undisputable facts about trading and the most scientifically prevalent ones and opinions have already been expressed in print by one Benoit Mandelbrot, the father of Chaos Theory. Even with his brilliant mind, he never went so far as giving us the Holy Grail formula for consistent success in the markets. You will find his book "The (Mis) Behaviour of Markets ~ A Fractal View of Financial Turbulence which he co-authored with Richard L. Hudson. His mathematical formula which he called the Mandelbrot Set, gives us traders vital clues on how the market operates, which is by fractal growth, and this gives us a pretty good framework on which it create a successful trading strategy. We need to take note of the unavoidable phenomenon of "streaks"  as he calls them, but the market usually provides these for us at news times. Occasionally also, we get one of the banks deciding to heavily trade the market, and this will provide us with a streak. Fortunately, they dont occur that often.

     I wouldnt be too concerned about the 5% / 95% myth if I were you, and just have the mindset that it IS possible to make money consistently in the market, a long as you realize that losses are part of the game,and our job as traders is to use statistical data wisely and cleverly to stack the odds in our favour, which is more than do-able and fun in the process! (And lastly, if you use stats,

    you dont need to worry about low lilquidity, summertime trading patterns, quants, robot trading, etc etc etc etc because these factors are ALL factored into the stats. But realistically, even at best, the stats only give us a statistical "edge" when trading the markets, so it's our job to use those stats with canny eyes and hearts!  :-) 

    Hope this helps!

    Richard. 

     

  • Hi Romano....try this .........http://www.dailyfx.com/forex/publisher_blog/2011/12/26/what_are_the...

    Am replying here because I dont know how to reply to you directly...so would appreciate your enlightening me as I am unaccustomed to this format of "bulletin board" or blog or whatever it's called!.....

    And no. your supposition isnt necessarily correct in regard to increased probability of correction or reversal. What I mean by stats is e.g. knowing over lets say 1000 past bars, how many times the wicks or tails of a Daily bar fluctuated within a certain range. So, lets say that if you only had 2% in that 1000 data series that had 10 pip wicks, and 28.345% had 30 pip wicks, then that information is valuable and can be used for deciding on when to trade and how to pick up nice profits on wicks. If, lets say, the % of wicks that were 60 pips on a Daily bar was inly 0.5% and occured in x number of bars, you dont want to wait until you think you going to get a 60 pip wick cos the probability of that happening is slim. (not impossible, but slim! statistically. This is the kind of approach broadly speaking that actuaries use when assessing risks in the insurance business. It means that a young person, who doesnt smoke, has no life threatening illness history and doesnt involve himself in dangerous sporting activties like bungee jumping etc, is a very good "risk" for the insurance company who provide him with a $1m life insurance policy. But if he walks out the door with his shiny new policy and gets run over by a red bus as he crosses the street, that eventuality will have already been taken into account by their actuaries and the "loss" wont bankrupt the insurance company. Sorry to labour the point....

     To get your  stats is a simple matter to have a programmer for your platform provide you with an indicator which will enable you to trade the stats way. So by now you probably realize I dont use any MACD/STOCHS/Moving AVgs/BOLLINGER BANDS etc etc etc etc etc on my charts....at most I use three lines and my own trading invention which I call data angulation. The angulation is a line which is based on statistical analysis and calculus. The biggest tip I can give you is to use the 50% point on a Daily bar and trade from one 50% point to the next, because price ALWAYS returns to the prior 50% point. Like magic. However, I use my data stats and angulations to give me very accurate predictions of WHEN that event will take place. It's really not complicated at all. I use MT4 for my data and charting and I trade on DC.

    You should avoid pairs that are trending because you need a big account if e.g. the trend lasts an extended period  before coming back to prior 50% "points". But there ARE ways to get round that problem!

    hope this helps!

    Richard.

    oh, and one last thing, its absolutely essential to be know and understand how to hedge trade, which is part of my strategy...but unfortunately, the powerful broker lobby got that banned in the States, simply because it works and the brokers there dont want their clients to learn how to hedge trade because it takes money out their pockets and levels the playing field!  They also dont like hedging because it keeps traders in the market for long periods, and they want you taking trades as often as possible which is where they make their money if they arent cheating you in any way whatsoever. Be VERY careful about broker choice because find honest ones is a VERY hard job, esp in countries where their activities arent regulated. 

  • Romano,

    I read the  Paul Barsch article. He's a marketer and not a trader. Clearly he doesnt understand that ALL of life's phenomena can be reduced to mathematical formulae. Life is about maths! and Maths is about life! The fact that Mandelbrot got as far as he did and gave us the wonderful world of fractals is evidence of that fact! But Mandlebrot couldnt crack the "code" that traders need to trade the markets with mathematical accuracy that would equate to the Holy Grail. But it doesnt mean that it wont be cracked, its just that it hasnt happened YET! In 1900 who knew about DNA ? Now we can analyze DNA easily and understand more about genetics than was ever dreamed possible way back in the day! The Mandelbrot Set is a very simple equation waiting for the likes of Newton, Einstein and Hawking to come along and add to and improve on the equation. Even mathematicians pooh poohed Mandelbrot's maths until they saw it in action, now they're no longer sceptics.......cos Hollywood came along and used the equation to give us Star Wars and all the wonderful newgen films that have changed tinseltown forever.....

    x Richard. 

  • Hi Romano,

    Great reply, thanks. The question I have in regard to your liquidity comments is...how do you determine liquidity? The 1929 Crash showed clearly where there was no liquidity at the top of the stock market only because traders could see the volume drying up, then a few cogniscenti screamed Get Out the market! but very few listened ....those who did, didn't lose their wealth, so didn't need to think of jumping out the windows. But I trade the Forex markets, because it's a multi-trillion dollar daily market,  and in spite of that fact, there simply isn't any way we humble traders can get accurate forex volume analysis, because that data is hidden from us (known only to the banks)  and the volume information on FX platforms is tick data and nothing more. (which is almost useless to us). Thomson Reuters has excellent data for forex traders but their platform is extremely complicated to use and the info we need is extremely expensive to get from them. Naturally!

    So, as a trader, my conclusion is that what we need to trade with successfully is staring us in the face, namely the bars/candles self presenting data. I don't know the time frame on your chart, but if it is a Daily or lower TF, I would have traded this and made a boatload of money on this chart just using the 50% rule. Obviously, the market was trending downwards (and there are easy ways to determine this) so when it hit the bottom of the trend I would have dropped a vertical from top to bottom and pinpointed the 50% mark as my profit target which was hit!  Predictably, after such a long downtrend the market on this chart is now in a sideways range and there will shortly follow either an upward break of the range or a downward continuation of the price. (Once again there are easy ways to determine when and how price will breakout of the range). In this case I would need to see more of the price action to get an idea of whether price is going to break upwards or downwards......

    When tracking trends I use the Nicholas Darvas Box method which works extremely well on Forex as well as stocks, which it was designed for. It's easy to trade the DBox method. Most traders hate trading ranges, but I love a ranging market because its very easy to make money over and over again in a ranging market. Btw, notice that there are also SEVEN streak bars on your chart, in the range area.Your chart has great potential for my data angulation analysis and its a very easy chart to make a huge amount of money with. :-)  My DA analysis then segues into determining the issue of WHEN market is likely to hit my targets, and to assist me in that I use the principles l outlined , or to a large extent, is based on the ideas of John Crane who wrote a brilliant book called Unlocking Wealth~the Secret to Market Timing. You might also want to ref  William Garrett's book > Investing for Profit with Torque Analysis of Stock Market Cycles, and the other classic, Profits in the Stock Market by HM Gartley. But be forewarned, both of these books  aren't easy to come by, and you will have to use all your analytical skills to sort out the wheat from the chaff in their content! But it was hugely interesting  to me that these early trading pioneers who had limited maths skills, were proven to be brilliantly on track by Mandelbrot the mathematician, who has proven to be light years ahead of his time.   

    Lastly, you are very much on track by your HH/HL or LH/LL comments but only the prior stats give me the statistical data to provide the edge as to which direction to trade...then your'e on your way! However, do keep in mind that around 58% of the Forex  volume is traded daily by only 5 of the major banks. You can check that stat out on Wiki. So it means that it doesn't take much effort for "them" to fake a breakout then fade the market after 20 pips or so....so our protection, once again, are the stats which they cant fake. Thats where WE the pilot fish have the advantage!! :-)  

    (If you trade on MT4 I can do some short term predictions and analysis for you to demonstrate my point.(By short term I mean either an Hourly or Daily chart.)

     x Richard

  • Interesting Discussion and I must say I am more with Romano on this matter

    If life is "purely about maths " - then no one would ever buy a lottery ticket ;-)

    FX trading is not a pure science - manipulation - deception - false moves are all part of the game to ruin pure maths formulations

    Game play theory I think is as important as technical analysis - and of course the other most important factor is the time of the session and the day

    Too many Bank bots nowadays are readable and to me any system / method produced pre internet is totally "old hat" - it still might work - but whats the good of of only 50 -60% win ratios and less than 100% returns per annum to a retail trader with an account under $100k - ie 95% of all retailers

    Regards

    Peter

  • Good Evening Gentlemen,

    A fine gathering of traders and open discussion across this table. Welcome Richard and Welcome back Peter. I would tend to go with Goldfingers idea on what life is all about, "Life is a Journey and not a Destination - Trading is a journey and not a Destination."

    Nota Bene, The thing which tends to drive most mathematicians absolutely insane is the idea of infinity and not getting to the last number in PI. So for us mere mortals and to avoid those minor hurdles and complications throughout life, we have to cut off the corners like a master craftsmen and say "near enough is good enough"

    Well done for pointing out the traps and ambushing moves in the market as well Peter and Richard. Thanks for your insight and videos Romano.

    Best Regards,

    Sir Gissachance (PPND)

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