Retail forex trading statistics
One of the things I have always wondered is where this number came from and if there is any actual evidence that backs up this figure. Is there any study that explores retail forex trading statistics trading success? Is there any evidence retail forex trading statistics tells us that the probability of having a long term edge is so low? First of all, let us remember that the above statistics — although used to a very large extent in forex trading — is actually older than this I found books using retail forex trading statistics in futures printed in the early 90s so most likely the above number was derived from observations across markets different than Forex.
Searching for academic articles dealing with retail trading performance is not easy, despite the fact that the topic is rather interesting it is observational at best and therefore not in the interest of most people dedicated to math, trading or statistics. My first piece of evidence comes from the Journal of Financial Analysis in an article by D.
However this is retail forex trading statistics always the case. A study retail forex trading statistics by B. M Barber around Taiwan traders published in SSNR in shows us that the performance of day traders can even be less than that. The evidence we have from these two articles strongly suggests that most day traders in stocks lose money.
Since Forex is a market with higher leverage we would expect the figures to be — as a best case — of the same magnitude. Of course it becomes important to also search for information in this regard about Forex. However since Forex is not traded through a central exchange but through retail brokers, it becomes very difficult to get access to any data and hence there are no studies in this regard because this data is kept private by the brokers.
Although the NFA forced brokers to show the number of profitable and losing retail traders per quarter they are not obliged to say what the turnover is and therefore there is no way of knowing what the long term 2 year for example success rate of forex traders is. After searching for a while I could find some sources which back this theory up.
The first true retail forex trading statistics of evidence comes from Reuters on an article that talks about the banning of retail Forex trading in China. My final piece of evidence comes from the Los Angeles Times on an article published a little bit more than a week ago. The author goes into some of the data provided by US Forex brokers and how this leads to the conclusion that most retail traders lose all their money in the Forex market.
The article makes a good point, highlighting the fact that people usually get into trading with the aims of making large amounts of money with an average starting capital of 3K but the bast majority lose all their deposit. Certainly we will probably never have a decent academic study on retail Forex trader profitability because brokers will never retail forex trading statistics the information needed to carry it out.
Unless retail forex trading statistics government forces brokers to reveal account turnover number and make a difference between inactive, active and margined accounts the actual figure of how many retail traders are profitable will remain obscure.
Now retail forex trading statistics a piece of rogue information more like gossip I can tell you that a friend of mine — working at a large European broker — told me that their 5 year account success rate is less than 0. In the end it seems that the old trader saying is right for the large majority of retail traders: If you want to make a small fortune trading… Start with a big fortune: I hope you enjoyed this article! Thank you for your comment: Thanks again for posting.
Actually my question is… Even if you are looking for long term profitability with realistic return expectations and planing your living from trading in years from now, you still need a fortune considerable amount of money to start?
And do you think the success rate in the conditions above are still 0. Think I can answer that question for you.
It all depends on the income you will be satisfied with. The few people I know in the Forex broker business tell me that customers with larger deposits usually have a higher survival rate although they still fail by large percentages.
I would however encourage you to watch the videos about the Atinalla project, compounding gets a LOT of power when you retail forex trading statistics things like fixed yearly additions for example adding 1K each year to your account. I hope this helps: Mail will not be published required. Mechanical Forex Trading in the FX market using mechanical trading strategies. April 11th, 8 Comments. Posted in Articles Tags: Is One Better Than the Other? The Effects of Increasing System Number: April 11, at 2: April 11, retail forex trading statistics 6: April 12, at 3: April 12, at April 12, at 9: December 29, at 9: Leave a Reply Click here to cancel reply.