A commonly known fact, or should we say myth, is that most forex traders fail. This was probably true around 5 to 7 years ago, when retail forex trading was still a vary vague industry and data tools and analytics were not easily available.
Trader mindset over a period of time has gone through an evolutionary adaptation in surviving in Forex markets and over time these traders have matured in both thinking and utilization of analytics to fuel success.
Firstly, hard data is difficult to come by on the subject because of the decentralized, over-the-counter nature of the Forex market, so the 95% to 96% claims of traders losing is inaccurate and cannot be scientifically measured in this way.
The data that is available from Forex and CFD firms suggests that a lot of people are becoming successful traders than they were ever before.
The ones who continue trading persistently with smart tools and first hand knowledge tend to win more often than lose.
The reasons for a successful winning mindset is :-
- The availability of the information is the key factor which is helping forex traders befriend the markets and make money giving them the confidence to trade with accuracy and guidance.
- Cutting edge technology is helping decode the daily currency and commodity moves and helps in identifying critical market patterns.
- Easy transfer of funds has helped traders fund their margin calls and avoid account blow outs with no downtime.
- More trader participation in the markets promote to more liquidity which avoids the erratic moves and tighten the bid/ask spread.
The number of unsuccessful traders slightly outweighs the number of small winners, mainly because of the effect of market spread. So the percentage of successful Forex traders is not substantially smaller than the unsuccessful ones.
Knowledge of disciplined money management skills has overall improved trading styles. This combined with powerful analytic tools and a positive mindset makes for a successful trader.
Share your experience on the markets and how analytics helps shape your decisions in the comments below.