Retail forex trader success rates - some real data

As part of my PhD research (yes, I'm doing a doctorate focused on trading) I am looking into retail forex trader profitability. Since the whole question of whether 95% of traders actually fail or not is such a hot button topic, I figured I would take that on as a bit of a side project and share what I find with folks as I work through the numbers. I've posted some initial results on my blog in the post Starting to detail forex profitability data. As the title implies, it is just a start at this stage. There's a lot of data and a lot of ways to slice and dice it. Still, comments are very welcome - here or on the article itself.

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Comment by Francesc Riverola on January 8, 2013 at 5:40pm
Dejar Rhody
Please paste everything you want to share with the community here as blog posts with summaries redirecting readers to 3rd party web sites are considered spam
Your research seems to be very interesting to us all so we encourage you to share it here with us
Comment by Rhody Trader on January 8, 2013 at 5:48pm

Francesc - Just didn't want to duplicate. If I were to repost that piece in every community where I thought it might generate some interest I could spend all day. I might be convinced to author something related (perhaps with a little more depth) for FXStreet.com, though. :-)

Comment by Francesc Riverola on January 8, 2013 at 5:52pm
Dear Rhody
You are perfectly right but we have pretty strict rules in this community in order to keep away traffic hunters that as you know there are thousands around this industry.
Anyway, we at either FXstreet or Forestreet.net will welcome your findings
How do you want to proceed?
Comment by Rhody Trader on January 8, 2013 at 6:03pm

The blog I've done was meant just as a starting point - hopefully to generate a bit of dialog to help me direct future posting - so let me write something a little meatier that I can submit as an article. I just need guidelines on submission length, etc. I can follow up with smaller bits here in future blog posts.

Comment by Francesc Riverola on January 8, 2013 at 6:09pm
I will ask my people to contact you to publish on FXstreet and yes it is a great idea to share here smaller bits and raw data to generate feedback
This is a very participative community when the topic is interesting ;)
Comment by Rhody Trader on January 8, 2013 at 6:36pm

One of these days Francesc I'm going to get to Barcelona and visiting FXStreet HQ will be on my itinerary. :-)

Comment by Indy on January 8, 2013 at 8:25pm

Hello Rhody,

This is a statistic I have wondered about so will be interested to hear further about the topic.

I do have one query about the stats quoted in the article. You state that;

  • Only 1250 accounts were able to have back-to-back winning quarters at any time, so less than half.
  • Among those with at least 2 profitable quarters (950), only 434 were able to have back-to-back profits more than 50% of the time.

It reads to me that there are less traders with 2 profitable quarters than traders with back to back winning quarters, 950 v 1250. How can that be so? if a trader has back to back winning quarters it stands to reason that he has at least 2 winning quarters. Perhaps you can clarify your precise meanings here because this does not make sense to me in its current phrasing.

I look forward to your future posts

regards

Indy

Comment by Rhody Trader on January 8, 2013 at 10:42pm

Hi Indy. Thanks for pointing that out. Right now I can barely see straight, but tomorrow I'll sort it out for you.

Comment by Francesc Riverola on January 9, 2013 at 9:54am

John... If you ever come to BCN, lunch/dinner will be on me ;)

Comment by Rhody Trader on January 9, 2013 at 10:19am

Indy - I've gone back in and reworked the post to hopefully make things a bit more clear, and added a little extra detail. To answer your 1250 vs. 950 question, it comes down to limitations in measuring repeats because of the hard end of the data. I've got 13 quarters of results, which means I cannot test if someone profitable in Q13 was also profitable in Q14. Thus, if someone goes back-to-back in Q12/Q13, that does show as two profitable quarters, but I cannot test to see if it will provide two back-to-backs. I hope that makes sense.

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