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Myth 1 of 11 in Myth Busting Series

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The internet is full of statements by so called experts. In this series called Myth Busting we take a look at a number of commonly held beliefs in the market place and query our database to see whether these statements/beliefs are FACT or FICTION.

 

PsyQuation is in unique position to provide a definitive voice on this subject with one of the largest retail FX research databases. We have tried to remain as impartial as possible to the outcome and simply let the results speak for themselves. Let’s get started.

 

DATABASE

DescriptionDetail
Accounts~120,000
Trades~120 million
Date Range20 Oct 2008 — March 2018

 

 

Myth 1.

 

95% of FX traders lose money.

This ubiquitous statement is all over the internet. It is also often quoted when referring to day traders. Before starting PsyQuation we spent days looking for a definitive source on this statement as it was a vital statistic to support the PsyQuation value proposition of making traders more profitable by helping them avoid making trading mistakes.

Try typing the above statement into a Google search and you will get more than 290,000 results. In the next few lines our results will help save you lots of wasted time.

 

 

So in fact its a myth, 95% of FX traders don’t lose money. Yes the majority of FX traders lose money but its not as bad as the myth suggests. In fact there is a small twist in the tail. There is a distinction between traders losing on a % return basis or on a $ basis. We think it is vitally important when measuring performance to work with % return as it allows you to compare traders with different account sizes with one another.  One further point we need to make is that we primarily work with median in our studies so as to avoid the distortion effect of outliers. For those unfamiliar with median it is the midpoint between the top half and bottom half of a series.

 

Myth 2 of 11 in Myth Busting Series Reflections of a 46yr old trader