We asked a few brokers about the widely circulated statistic that you hear everywhere saying that 95% or 80% or whatever very high percentage of retail Forex traders lose money.

The answers we got, and what I have read elsewhere from reputable sources, suggest that indeed most retail Forex traders are losing money consistently, though it is not as high as 95% or 80% of traders. Of course, nobody really knows except the brokers themselves.
I personally believe that most are losing money and the real question is why.

The reason why is that the system is designed for the retail trader to fail, and most retail traders are not knowledgeable and disciplined enough to do what is necessary to move the odds in their favor.

Here are the things you can do to put the odds in your favour:


1. Be properly capitalized. This is probably the root cause of most failure. If your account is too small you have to risk too much on each trade and then you can't cope emotionally with the losses, which destroys your trading intelligence and discipline, which leads you to blow your account.


2. Keep your risk even and have a volatility based formula for calculating how much you risk per trade. Something like 0.25% of your account is great. The end result needs to be that you dont care about losing a trade. I repeat, you need to be a in a position where you dont care whether an individual trade wins or loses. Otherwise, your judgement will get screwed up.
3. Use a good strategy that you have actually tested and that has proved to be robust.


4. Worry more about letting the winners run and cutting the losers, than about trying to win all or most of the time.


5. If you are down at the end of a day, week or month, don't worry about it, as long as you are acting correctly. Soon enough the market will give you some winners.


Most retail traders are unable or unwilling to implement this 5 point plan. This is why they tend to lose. You don't have to lose, you can teach yourself to do it the right way. But first of all, forget about finding a magic system that will make you rich overnight. It does not exit. What does exist, is a market that regularly gives opportunities where the odds are in your favour to make more money than you risk. Here at the FX Academy we teach you how to spot these opportunities.

more reasons is mostly greed and impatience.making millions overnight, day dreaming of buying farari within a month of trading.this is one of the major reason why they loose.learning is not in their dictionary,what they think of is to buy a house in a week.due to the way people paint forex as means to make unending cash like there is no tommorow makes the beginners to have misconception about the whole thing and not willing to learn the in and out of it before going live.forex is not a childs play.top banks,hedge funds etc employs traders with displine.learn it even if it takes years because the market is always there but traders are always running

I guess education is the key here, as in every profession. Imagine a doctor operating on a patient!

The quality of your broker can affect your results, certainly. To what extent your results can be affected depends upon your style of trading.
If you are doing lots of short-term trading, such as day trading, then the quality of execution that your broker gives and the spreads they charge will affect your results.
If you are trading long-term, then the overnight financing charges they impose can make a big difference to your results.
Remember also that most brokers want their clients to lose, so they design the trading platforms to encourage you to trade as often as possible, the same way casinos try to get you to keep gambling by using bright flashing lights and free drinks.
Unscrupulous brokers can also try a few tricks, but it is hard to prove them.
It is best to use brokers that have no dealing desk and so are not incentivized to want to see you lose.

FXCM also published a study showing that most traders are winning most of their trades, but are losing more on the losers than they are winning on the winners combined. I think a lot of the problem is that the finger itches to take a profit when the eye sees it floating there. One of the most challenging parts of trading is having the discipline to let winning trades run.

Just some statistics (US Retail Forex Profitability Report)
% of US retail account holders who registered profits:
2013 Q3: 33.4%
2013 Q4: 33.6%
2014 Q1: 35.4%