Forex traders are profitable

39.1% of the Forex traders are profitable

Why so many lose in Forex and what adjustments the losers traders have to do in order to be among the select group of traders who consistently earn Forex?

Well, until we deepen more in the theme, first we will analyze the claim that 39% of Forex traders are profitable. The information was provided by the Forexmagnates site through a report on the profitability and performance of Forex brokers. The most prominent figure was 39.1% of profitability for customers of a broker who had around 24,000 active accounts.

There are also other interesting snippets of information that are worth noting before going ahead.

There was a sharp drop in the number of accounts and levels of activity in 2011, while the percentages of profitable traders increased. This could suggest a couple of points of interest, firstly, traders may be improving collectively in their activities in the market or (and is not mutually exclusive) many beginner traders have simply abandoned the market, returned to work 5-9, leaving the field open more competent traders whose superior results have improved the statistics data. We have also seen a reduction in the number of Forex brokers, which has caused that only the fittest traders supported by brokers to better comply with regulations regulatory end up prospering, when before many traders operated with deficient brokers services that ended up cause them losses.

Forex brokers industry to the United States retail is showing clear signs of slowing down, and in fact these companies report that the number of trading accounts has been backsliding. The extreme regulatory climate has made it extremely difficult for U.S. brokers to attract new customers. However, many customers of these companies show a high level of benefits and are cost-effective in the long run.

It is fascinating to see how many can find this fact quite striking and contrary to some of the most common preconceptions about the Forex. To my and many others claim that only 10% of traders are profitable is nonsense. Although most traders end up losing in the market, there is a lot who operate responsibly and with a sensible and well thought out trading plan, and therefore profit more or less regularly.

A question often posed by this type of statistics of success is "Are the figures by a small percentage of winning traders distorted being?” However, overall percentages, averages, and the distribution of the random data do not work that way, a basic knowledge every trader should have. If around 40% of the operations are profitable then the number of the percentage of traders who have a positive return should be fairly close to that number.

In the first paragraph we raised the question of why are so many losing traders in the Forex market? Armed with this new information one might wonder whether that assumption should not be examined in more detail. If we listen to the data, about one third of United States Forex trading accounts is profitable, or at least was in 2011. Certainly these statistics indicate most traders lose money in Forex, although not 90% catastrophic stating above. In these data, the distinction between full-time and part-time traders is not although we could dare to say that operators presenting best results are those who dedicate more time to this activity, as opposed to traders who enter the market from time to time to bet.

This assumption seems logical if we think that to be trader in time full (at least for a period), the person must have profits, i.e. which has to be profitable over time, otherwise could not engage in this activity 100%. Probably traders today are educated more than before and in addition, some of these people may be traders who started his career years ago and persevered despite initial losses.

Turning to the question posed in the initial paragraph; "Why so many lose in Forex and what adjustments the losers traders have to do in order to be among the select group of traders who win consistently in the Forexs?" Then we leave them with the six main reasons and please feel free to join this blog with your own suggestions or additions. Now we will not investigate the reasons or to provide solutions, is a simple and more complex list, the answers are there, the solution is obvious.

But first, let's recapitulate: If about forty percent of traders succeed in the Forex market, this means that this objective can be more within reach than many have foreseen. This is an important stimulus for novice traders.

The six main reasons why traders fail

1.    Low initial capital

2.    The lack of risk management

3.    Greed

4.    Indecision - doubt plan

5.    Try to choose maximum or minimum

6.    You refusing to accept losses