Why 98% Of All Day-traders Fail | Forex Factory

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Why 98% Of All Day-traders Fail

  • #1
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  • First Post: Sep 5, 2021 2:29am Sep 5, 2021 2:29am
One thing you will never see from any "day-trading" guru or "expert"...is a three
year independent audit of their trading account.

At least four major unversity studies that either tracked, for example...300 day-
traders or trading indicators (like MACD etc...) over the course of a few years
determined that 98% lose their money over any one year. The 2% that do make any
money one year, will most probably lose their money the following year.

It's hilarical to hear the system-sellers say how much they "love to help people", so
that's why they're spending time "giving away" their system, instead of spending
time trading. If they really loved to help people, why are they CHARGING people for
their "system"???. Not very charitable.

Understand this: On any average day in the market...5% of stocks will trend up. 5%
of stocks will trend down. 90% of stocks will oscillate, rendering any breakouts or
movement false...up or down. That makes the odds 9 to 1 against any day-trade. If
you try to be selective in any way...the best your odds will be is 8 to 1 against you. Would
you walk into a bar and tell eight people you want to fight them? That's your average
day trader.

There are THOUSANDS of hedge funds whose algorithms see any movement in the
market and immediately move against them to take profits. How? Because odds
are...they took a position much earlier because of their massive computer programs
that study price action. Like any casino, a hedge fund's 2% edge will destroy your
trading account.

Their strategy is to buy 2000 stocks long and sell 2000 stocks short each day and
hold one day or two days at most. Odds are...there's always massive money against
ANY position you take, no matter which direction you take. This is why you often
hear, "As soon as I jump on a trend...it moves in the opposite direction".

There is no other way for hedge funds to get IN or OUT. Their algorithms must spot
any volume coming into the market. Day-trading is a sucker's game at best.
  • #2
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  • Dec 16, 2021 1:42am Dec 16, 2021 1:42am
is this good or bad?
  • #3
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  • Dec 17, 2021 7:07am Dec 17, 2021 7:07am
"Understand this: On any average day in the market...5% of stocks will trend up. 5%
of stocks will trend down. 90% of stocks will oscillate, rendering any breakouts or
movement false...up or down. That makes the odds 9 to 1 against any day-trade. If
you try to be selective in any way...the best your odds will be is 8 to 1 against you. Would
you walk into a bar and tell eight people you want to fight them? That's your average
day trader."


This is why you position your trades to profit from the middle range of price movements.
Love to talk on Discord: DividendGamer#1324
  • #4
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  • Dec 17, 2021 5:27pm Dec 17, 2021 5:27pm
An interesting train of thought.
  • #5
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  • Dec 17, 2021 7:34pm Dec 17, 2021 7:34pm
What about those who trade with no indicators ? meaning, a price action traders

For every buyer there is a seller, it's a zero sum game so, eventually there is a winner.
  • #6
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  • Dec 19, 2021 12:12pm Dec 19, 2021 12:12pm
Quoting yanivb
What about those who trade with no indicators ? meaning, a price action traders For every buyer there is a seller, it's a zero sum game so, eventually there is a winner.

As a price action trader myself, having the patience to NOT trade is very important.
Love to talk on Discord: DividendGamer#1324
  • #7
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  • Dec 19, 2021 2:27pm Dec 19, 2021 2:27pm
Quoting Varkeer
{quote} As a price action trader myself, having the patience to NOT trade is very important.
This is also very true
  • #8
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  • Dec 23, 2021 12:09am Dec 23, 2021 12:09am
That is quite a disputable thing described in this article.
I mean that the percentage of individual investors on the forex or stock market is really low, the biggest part of every market belongs to institutions like funds, banks, etc. That is why it is a little bit weird to say that as soon you allocate your order, hedge funds switch on their algos and programs along with analysts in order to get your $100 every time you open a deal. More than that, I never told that as soon as I open a deal, the price moves to the opposite direction of my prognosis. So, come on, it is possible to earn on trading. There are many people on Earth who make their living due to trading. Surely, they are not outstandingly rich people like Warren Buffet or George Soros, but they manage to make quite decent profits with certain consistency.
I feel that the reasons for 98% of traders to fail is pretty simple to understand. Trading is not the easiest task ever, to put it mildly. A successful trader should be good at market analysis, working with trading platform, he should be psychologically stable and self-disciplined. All of these aspects are equally important for achieving success and not many people can be patient enough to acquire these qualities. That is why not everyone can be a success in trading but not because of the fact that hedge funds are eager to get our peanuts.
  • #9
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  • Dec 24, 2021 2:02am Dec 24, 2021 2:02am
I would not bother why 98% of traders fail, I want to know why the remaining 2% are profitable. I make sure to watch the weekly recap from FTMO because successful traders are interviewed and they share their trading journey and strategies.

This has really helped me as a trader.
  • #10
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  • Dec 28, 2021 6:31pm Dec 28, 2021 6:31pm
Quoting toncuz
One thing you will never see from any "day-trading" guru or "expert"...is a three year independent audit of their trading account.
just because you didn't see them, that doesn't mean they are not there.
If u luv happiness, start w/ discomfort, make friends w/ pain and failure.
  • #11
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  • Jan 2, 2022 8:11pm Jan 2, 2022 8:11pm
Trading is a lot about controlling yourself.
Risk Management is of utmost importance!
  • #12
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  • Jan 4, 2022 4:17pm Jan 4, 2022 4:17pm
I think day trading mostly depends on technical analysis. If a trader has good technical analysis skills, he can easily make money in day trading. But most people who fail at day trading either lack the required skills or just trade with luck while skipping risk management. This lack of skill and luck in the game results in huge losses for them.
  • #13
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  • Jan 6, 2022 6:46pm Jan 6, 2022 6:46pm
hello
What is the benefit of a market maker bank for providing leverage?
Given that a high percentage of Forex traders are losers
Does it take advantage of traders' risk?

or

Or market maker bank changes prices

That is, it transfers the rate in the interbank network to the broker and eventually to the traders with a slight change
  • #14
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  • Jan 14, 2022 3:34pm Jan 14, 2022 3:34pm
@Epeolatry
Successful traders have expertise in technical analysis. And most traders who fail in trading are either because of lack of trading skill/strategies or bad psychology. Apart from that, risk management is important, once traders focus on controlling risk, winning trades become easier.
  • #15
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  • Jan 14, 2022 5:57pm Jan 14, 2022 5:57pm
Quoting louiseking
@Epeolatry Successful traders have expertise in technical analysis. And most traders who fail in trading are either because of lack of trading skill/strategies or bad psychology. Apart from that, risk management is important, once traders focus on controlling risk, winning trades become easier.
Also, it's designed for fail
  • #16
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  • Jan 18, 2022 10:06pm Jan 18, 2022 10:06pm
If this offers anyone encouragement.. I'm going to add my two cents.

I admittedly haven't been trading for long. I'm not going to try to go against the idea that many 'studies' have been made about this high percentage of so-called 'losing traders'. It's true, many fail.

However, I've spoken to a few long-time traders, and brokers who have been practising for a very long time. I asked them the question.. WHY, and WHO is failing?? Numbers mean nothing, and only serve to discourage potentially would-be traders (and very good ones at that) from ever pursuing this in the first place.

Now here is what he said, and it really encouraged me. Don't misundestand, I'm not trying to say that there aren't a massive amount of rookies who fail.. but listen carefully. This particular broker (a world recognised one) told me that MOST of that percentage (more than 78-80%) who are failing.. give up within the first 2 months!

No, this isn't a long term study, and I'm sure we could debate figures. But this actually encouraged me greatly. It wasn't high-level pro's that were just seemingly dropping out of the air after a successful trading career.. only to lose it all. Nope, it was lazy ass people who for the most part couldn't be bothered asking the most basic questions about trading, and had barely taken the first step in asking the right questions, actively researching and learning every day.. none of that. I found it absolutely stunning.

Those are the ones that apparently this broker was seeing fail.

Forgive the somewhat scattered nature of my post, but I hope the message gets across. DO NOT give up on your journey, or dream of doing this because someone told you that 'most' people fail. For the most part, it's bullshit. If you are pro-active, are in it for the long-haul, know how to ask better questions, study this every day and week, aren't afraid to really dig deep and ask yourself why your trades have failed when they have, take notes, journal, find a MENTOR, and just keep getting back up, no matter what, and in the meantime use strict risk management and don't just mindlessly blow $50,000 (there's no need.. just put 100 in a live account). You WILL and you CAN succeed.

I promise.
  • #17
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  • Jan 18, 2022 11:42pm Jan 18, 2022 11:42pm
Does this tell us， that trading should actually choose the direction of the trend, rather than day-trading?
  • #18
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  • Jan 20, 2022 9:26pm Jan 20, 2022 9:26pm
System sellers don't make money trading. Why would they sell a winning system
  • #19
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  • Feb 8, 2022 6:36pm Feb 8, 2022 6:36pm
Quoting louiseking
@Epeolatry Successful traders have expertise in technical analysis. And most traders who fail in trading are either because of lack of trading skill/strategies or bad psychology. Apart from that, risk management is important, once traders focus on controlling risk, winning trades become easier.
controlling risk is a great trading skill , no doubt . but to be skilled about this habit is a very long time issue , for that reason beginners fail to keep interest after passing sometime.
  • #20
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  • Feb 11, 2022 5:19pm Feb 11, 2022 5:19pm
Day trading can be really profitable because it抯 easier to predict the price movements in the short term than predicting it in the long time frames. Also, there are no overnight fees involved which can eat up a lot of profits. However, to master the day trading strategy one should be really good with technical analysis and should devote enough time to trading.
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