FX Retail Traders - 2016
% Breakdown of those who make it and those who don’t
Estimated % of Winners –
Minimum consistent winners who manage to make profits both monthly and yearly -
3 -5% - (Independent estimates)
Maximum number of consistent retail winners who make profits monthly ongoing -
22 – 28% - (Broker / trade estimates )
My own personal view based on other independent statistics and spreadbetting stats –
11 – 15% of all retail FX Traders may be profitable on a consistent basis
Why do so many traders – ie estimates from 72 to 97% of retail traders never make trading profits on a consistent basis ongoing over months – quarters and yearly ?
Out of every 100 new retail FX traders
30% approx should never really even start to FX trade – ie due to personal circumstances – ie below average intelligence levels ( 1Q ) – mental illnesses – total lack of personal focus and disciplines etc
The other 70% who maybe do have a chance to make it - out of those retail traders -
High percentage – ie over 75% believe that its possible to be consistent and profitable within 1 year of part time trading – ( actual times vary from 2 to 7 years to make the consistent level) . This results in many giving up between 6 and 12 months after starting – either through losing too much money or other interests etc. FX Trading is pressurised and can be stressful when trading with real money . Many traders never realise they cannot handle pressure.
Of the rest – ie 25% of the 70% of newbie FX retail traders – ie approx 17 -18% do their best to become consistent and go over 3 years and get to a stage that they are progressing continually.
Less than 10% of these 17 -18% of newbie traders – ie approx 1 to 2% end up working for themselves and earning their main source of income from retail FX traders .
The other 16 to 17% remain part time and supplement their main income from other work with the returns they make from part time FX trading – whether they spend just 3 hrs a week trading or even 15 hrs a week - with a plan to grow their Capital base and their annual profits
If you do make it and become a consistent profitable FX retail trader – can you make a good return and earn enough money to make it a full time position?
ABSOLUTELY 100% YES
Retail FX trading is totally different to commercial / Hedge Fund/ Bank FX trading. Don’t compare the results as its like comparing apples with oranges etc.
Good consistent retail FX traders on accounts under $100k can make anything from 15 to 40% + per month returns – ongoing – although it’s not possible to continually compound as size comes into play . I have personally witnessed retail FX Traders on live accounts make over 5000% gain on small size capital account under a month – but again this is not sustainable over longer periods and with of course larger capital bases
What you put in to retail FX trading does correlate to what is possible to get out from it.
The higher the skill level and the longer the devotion and time spent does result in higher returns
All Forexmospherians know this - the trading journey is always ongoing
I disagree with a point, "Mental Illness". I don't think its mental illness, term is called EQ level, Emotional intelligence (EI) or emotional quotient (EQ), for trading it required above the average.
Mental illness sounds very odd..
Maybe it's terminology - but this link will help with the definition
In the UK and the developed countries of Europe - we are fortunate to have a National Health Service and so people can be treated with the necessary cures etc - whether that might be drugs and support etc.
Unfortunately in other areas of the World - including the USA - there is a higher percentage of people suffering from the stresses of modern life - where in the UK it can easily effect 20 -25% of the population - in the US its over 30%
This is a separate issue to pure emotional intelligence - that is a different subject all together
I think I need to clarify more about my use of "mental health" issues - or mental illness.
It can cover a multitude of situations - ie the sudden unexpected death of a close relative - can place people under tremendous stress and pressure and in situations like these - those people employed by a caring company would be given some "compassionate leave". During periods like this they may take unusual decisions - they may be depressed or very frustrated and angry - and of course the last thing these people should be doing is looking at trading the markets. Similar people who have gone through difficult divorces or have had their homes burgled - or they have been physically attacked - they should not even think about taking up trading whilst they are not in their normal state of mind.
Normally, most people will overcome periods of depression or anxiety - etc - but not everyone.
Unfortunately - at any one time of the month - there will be a percentage of new traders who just should not be even thinking of trading - never mind actually carrying it out. The results can lead to further stress and anger and can have a long term effect. The fact that FX Trading has been sold to newbies in the past as being an easy way to make quick money - its encouraged many people to try it out - who really should not even be even allowed to open an account.
Its like giving a person who is well and truly drunk the keys to a car and saying - you carry on driving - you will be OK.
You can actually see this on many trading forums - ie when traders lose their "rag" and end up arguing and cursing etc etc- hardly a good sign. If not "revenge" trading they end up trying to pick an argument with anyone who they think might be doing OK or successful - Ok we all suffer at times from jealousy or envy - but some unfortunately let it go to far.
Hope that goes some way to further clarification of the breakdown of people who should not even think about taking up FX Trading