What Percentage of New Traders Fail? (Part 5)

Today I continue with excerpts from a Forex website forum discussion in 2013. The initial post, which tries to rebuke traditional wisdom, is Post #1 here. Forum content is unscientific and open to scrutiny. Do your own due diligence and buyer beware.

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• Post #47, 4xp

     > The simple fact is that more traders have to lose than win
     > in order for the winners to make money… we are able to
     > have leverage because of so many losers in the market.
     > IMO, I believe the number is closer to 90% failure rate
     > than 99% that many have already espoused.
     >
     > The reason forums like this one are so popular is because
     > there are so many losers. Most people are not making any
     > money trading, so they come here looking for and hoping to
     > find something they can learn from. By the time you get
     > here, you have the blind leading the blind. Many admit
     > they are newbies or learning. Others want to pose as
     > experienced traders because of an oversize ego, but they
     > are really losers. Others come here because they have a
     > web site, but they do not know how to trade, so they
     > beguile newbies to head to their site. When it is all said
     > said and done, it can be hard to discern the very few that
     > are good traders because they are hiding behind the guise
     > of their computer screen.
     >
     > When someone says you cannot beat the market, that is all
     > rubbish. The reason the ~10% beat the markets is they are
     > armed with and trade their methodology so they can beat
     > the markets. The few that win consistently take personal
     > responsibility for their actions rather than blaming the
     > markets. The markets can only go up or down. You just
     > have to have a methodology that discerns which direction
     > it is going then jump on board.
     >
     > It is also no such thing that the markets are a zero-sum
     > game. All of us can be winners, or all of us can be losers.
     > I don’t concern myself with newbies coming up through the
     > ranks becoming winners and then rob my pot. No chance!

Lots of good ideas here! Some are speculation (e.g. paragraphs 1 and 4), but they are interesting nonetheless.

In another post, 4xp goes on to write:

     > People lose because they do not take time to learn. When
     > I first started in 2004, I was working in a factory. I’d
     > get home, then start learning about the markets. It took
     > much experimentation and labor. I failed many times. Was
     > it worth it! Well, let’s see. I wake up in the morning,
     > go through my morning routine, which includes some quiet
     > time and a trip to the coffee pot, then I make the long
     > walk down the hallway to my home office, and report to
     > work. Ahh, yes. It was worth it.
     >
     > Simply put, if you were training to be a doctor, you
     > would have to go to school for 8 years, and pay all that
     > money. Here, it depends on your learning curve and does
     > not have to cost what a doctor pays. When you are
     > finished and ready to enter the markets, you make more
     > than the average doctor. But, yes, it take work and
     > lots of time.

Five stars on the first paragraph!

With regard to the second paragraph, I disagree with making more than the average doctor. Not only does 4xp suggest it’s guaranteed, whether it’s even possible is highly dependent on starting capital level.

To be continued…