FOREX TRADING – THE LOSER’S ARENA?

The old 6 month rule of forex market says “90% of traders lose their capital within 6 months.” My personal statistics is worse, I have never met any profitable forex trader when I was working for a broker house with around 12.000 clients.

Honestly, we don’t trade forex, for some simple reasons:

1. We don’t know anybody who has been consistently profitable in forex trading. We do think if you are not an investment banker don’t trade forex. 
2. We are concerned about forex, because there is no major trends really occurs like in the commodity or equity markets. So you have to be on the both side, therefore trading forex is double riskier. 
3. The high leverage 1:100, 1:200, 1:500 is slaughtering the forex traders. 

Recently we found a great statistics from France which shares our concerns about forex investments. The French Finanacial Authority - Autorité des Marchés Financiers – is issued a very sobering report about the French forex industry.

• 9 out of 10 clients lost money – 89% of clients are losers
• The average loss per client was nearly €10,900 (2009-2012)
• During this period 13,224 clients lost nearly €175 million, while the remaining 1,575 clients earned a total of €13.8 million

An other report from UK based forex company Plus 500 states that they are losing month by month huge numbers of clients. They drop out due to their huge losses. They have 67.000 clients, but they need to add each month new 10.000 customers to keep the level of 67.000. All in all don’t believe to the massive marketing hypes that forex trading is easy, that is a lie and try to ignore the forex arena.

The BFM Assets Team.