DislikedWhere does this number of only 1% that are profitable in the long term come from?Ignored
It comes from regulators. As an example, the director of the UK’s FCA, giving evidence last year to a parliamentary committee on financial service industries, reported that among millions of FCA-regulated forex-trading accounts, far fewer than 1% were “net profitable,” according to the standard industry definition forming the basis of the question he had been asked.
Those 75%-80% (losing) figures are measured on a quarterly basis (because that's what the law usually requires) and are therefore desperately misleading.
If about 20% are declared profitable over a quarter of a year on audit (pretty normal), then it’s likely that about 5% will be profitable over a whole year.
The reality is that almost all of those 5% are virtually inactive accounts of people who hardly ever trade unless they’re given a specific “tip” by someone in the know, or whatever. In other words they’re not even “active traders,” almost all of whom are net losers in the CFD world.
A numerical one. Most start-ups are unsuccessful, as you say, but the overall figures are nothing like those for "forex-trading start-ups," for which the success-rates are much closer to zero.
3
