What percentage of forex traders quit? (2024)

According to research, the consensus in the forex market is that around 70% to 80% of all beginner forex traders lose money, get disappointed, and quit. Generally, 80% of all-day traders tend to quit within the first two years.

While one may argue that the failure rate in the forex industry is very high, with many new traders dropping out within their first few years of trading, this doesn’t mean that you should not start trading.

Trading is surrounded by many misconceptions and myths, and many traders tend to start trading for the wrong reasons. Basically, getting into trading to become rich quickly is one of the main mistakes and one of the key reasons that traders become frustrated and quit trading. Having the wrong expectations and starting forex trading for the wrong reasons will lead any trader to quit. But trading is not like a hobby and takes patience, love, passion, and dedication. Again, lacking the perseverance and passion for the game will also lead many traders to quit.

Mistakes that lead many forex traders to quit

But let’s see in more detail some of the most common reasons or mistakes that lead many traders to quit. What’s interesting to note is that the majority of these mistakes can be easily avoided.

What percentage of forex traders quit? (1)

What does the market tell you?

One of the most common mistakes made by forex traders who quit is that they ignore the market and don’t listen to what it says. While it may be easy to develop and enhance your trading skills, traders also need to have the intuition and sensitivity to adapt their knowledge to the real conditions of the market. In other words, put their knowledge into practice. Many traders, when they first start, seem to be unable to apply their knowledge in the proper context, ignoring the market and what the market is showing or telling them.

For example, if you are buying a forex pair with the expectation that its price will increase, but you see that there are various fundamental factors and too many buyers pushing its price lower, maybe you need to assess the situation and take a step back. The market is dynamic, and while you may follow a plan, sometimes the market will tell you to take some time, reassess the situation, and make a decision to respond to the new market conditions. Remain alert and always monitor the markets to stay ahead of unexpected market moves.

Avoid stubbornness and persistence, and don’t increase your position based on emotion. Instead, take your time, research, and analyze any new information that may influence price action.

Very often, you will hear experienced traders emphasizing the power of the market and saying that the market has rules, and if you disobey them, it will take what belongs to it. Well, the market is unpredictable and can take your funds just like that, so learning to listen to the market, being open to new information, and being adaptable to new situations will help you remain flexible and grasp opportunities when they arise.

Are you stubborn?

Connected to the above, but a big issue altogether is the insistence on being right all the time. Many forex traders hate to be wrong and end up making huge mistakes. In forex trading, sometimes traders focus on a specific currency instead of looking for opportunities in other currency pairs. So whatever they do, they remain focused on trading that currency the way they always do, and when the trades don’t go as planned, they don’t change but stick to them, refusing to exit their losing positions.

While commitment is important in many things in life, when you trade, you should always keep an open mind and avoid being too invested in one single trade. Great traders know when to exit a losing position and they do so quickly.

To be consistently profitable, you should accept the fact that you cannot be in control all the time have great results, and look to make good trades despite the outcome. Learning from previous failures and avoiding falling into the same old habits will keep you flexible and ready to adjust and make corrections.

What percentage of forex traders quit? (2)

The difference between having or not having a passion for trading

Every trader out there has made mistakes. But sometimes, the ones who stay in the game are the ones who remain faithful to trading out of their love for it and dedication. If you enjoy trading and have a genuine desire to learn and improve your skills, you may be one of those traders who won’t quit and won’t give up that easily. While quitting may be an emotional decision, very often those who quit may not have a passion for trading and lack the desire to persist.

Deciding to continue despite the difficulties and to give it another try is a decision driven by will and determination. Without the will, enjoyment, and strong interest to learn and do better, it is hard to continue when trading becomes harder or you get disappointed. You need this unending flame and motivation to pursue trading, enjoy practicing, and develop your skills.

When traders lack any love for the game, conducting the necessary market analysis, and putting in the extra hours, trading will end up being like a boring task, something they have to perform and which they do not enjoy.

What percentage of forex traders quit? (3)

Forex traders do not have the right expectations.

Not everyone is a profitable trader from the start, and it usually takes time and a lot of mistakes and disappointments until you get it right, and even then, there are no guarantees.

Egos may get crushed, trades may exit in disappointment, and money may be lost. But you get up and do it again, not only because you love it but also because you know the risks and understand that gains are not guaranteed. Young and inexperienced traders make the mistake of thinking that they should never incur any losses.

They add more pressure on themselves and take it very hard when they fail. Accepting that there may be losses and that you will experience good and bad trades, losing and winning streaks, undergo drawdowns, and feel bad, and that all these are part of the game, will keep you focused.

Being kind to yourself and having realistic expectations is paramount. It’s okay to be wrong and mistakes do happen. Even the best forex traders experience these things. Being patient and respecting the process, with all that it involves will make you stronger and wiser.

Not everyone will make it big. But you have every right to give it your best and try to become the best trader you can be. No one can take that away from you. And this is why some traders quit and others don’t.

Become an IronFX forex trader

When it comes to trading, choosing the best CFD broker will help you reach your goals and remain focused. IronFX is a broker who will be by your side no matter what and will provide the necessary support to get you to the next level. Work hard, dream big, and the rest will follow. With a great broker who has all the right tools and amazing trading conditions, you will get access to trading tips and insights and develop your skills so you can take on the markets with determination.

This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked in this communication.

Sign up to our newsletter

Please note that your email will be solely used for marketing purposes. For further information, please read our Privacy Policy

What percentage of forex traders quit? (2024)


What percentage of forex traders quit? ›

According to research, the consensus in the forex market is that around 70% to 80% of all beginner forex traders lose money, get disappointed, and quit. Generally, 80% of all-day traders tend to quit within the first two years.

What is 90% rule in Forex? ›

The 90 rule in Forex is a commonly cited statistic that states that 90% of Forex traders lose 90% of their money in the first 90 days. This is a sobering statistic, but it is important to understand why it is true and how to avoid falling into the same trap.

Why 90% of Forex traders lose money? ›

The reason many forex traders fail is that they are undercapitalized in relation to the size of the trades they make. It is either greed or the prospect of controlling vast amounts of money with only a small amount of capital that coerces forex traders to take on such huge and fragile financial risk.

How many percent of Forex traders are successful? ›

They may also be overtrading or taking on too much risk. According to research, only about 20% of forex traders are consistently profitable, and the remaining 80% struggle to break even or lose money.

What is the stop out percentage in Forex? ›

For the MT4/5 platforms a margin call occurs when equity on the account falls below 90% of the margin required for maintaining your positions and an automatic stop out will occur when account equity falls below 50% of the margin required for the trades.

Why do 95% of forex traders lose money? ›

Poor Risk Management

Improper risk management is a major reason why Forex traders tend to lose money quickly. It's not by chance that trading platforms are equipped with automatic take-profit and stop-loss mechanisms.

What is the 5-3-1 rule in forex? ›

Clear guidelines: The 5-3-1 strategy provides clear and straightforward guidelines for traders. The principles of choosing five currency pairs, developing three trading strategies, and selecting one specific time of day offer a structured approach, reducing ambiguity and enhancing decision-making.

What is the dark side of forex trading? ›

Forex trading risks include: Market risk: Volatility in currency exchange rates – the biggest Forex risk. Leverage risk: Potential for amplified losses. Operational risk: Failures in trading platforms or execution.

What is the number one mistake forex traders make? ›

The Bottom Line

Averaging down, reactive trading to market news and volatility, having exceedingly high expectations, and risking too much capital are common mistakes.

Why do so many people fail in forex? ›

Lack of Discipline

Successful forex trading requires discipline and adherence to a well-defined trading plan. However, many traders fail to develop or stick to a trading plan. They may deviate from their strategies, chase after quick profits, or make impulsive trades based on short-term market fluctuations.

Has anyone gotten rich from forex? ›

One of the most famous examples of a forex trader who has gotten rich is George Soros. In 1992, he famously made a short position on the pound sterling, which earned him over $1 billion. Another example is Michael Marcus, also known as the Wizard of Odd.

Has anyone become a millionaire from forex? ›

The answer is yes! Forex can make you a millionaire if you are a hedge fund trader with a large sum. But forex from rags to riches for the majority is usually a rocky and bumpy ride which often leaves some traders in their dreams.

What is the average income for a forex trader? ›

As of May 6, 2024, the average hourly pay for a Forex Trader in the United States is $48.81 an hour. While ZipRecruiter is seeing hourly wages as high as $94.23 and as low as $25.48, the majority of Forex Trader wages currently range between $27.64 (25th percentile) to $87.02 (75th percentile) across the United States.

What is exit strategy in forex? ›

Popular exit strategies include stop-loss orders to limit losses, take-profit orders to lock in gains, trailing stop-losses to capture profits in trending markets, using technical indicators to identify reversal points and time-based exits.

What is the 2 percent rule forex? ›

The 2% rule is an investing strategy where an investor risks no more than 2% of their available capital on any single trade. To apply the 2% rule, an investor must first determine their available capital, taking into account any future fees or commissions that may arise from trading.

What is a good margin level in forex? ›

Good Margin Level in Forex Trading

A good margin level is typically considered to be above 100%. A margin level of 100% indicates that a trader's equity equals the used margin, which is the minimum level required to keep positions open.

What is the 80 20 rule in forex? ›

80% of your portfolio's returns in the market may be traced to 20% of your investments. 80% of your portfolio's losses may be traced to 20% of your investments. 80% of your trading profits in the US market might be coming from 20% of positions (aka amount of assets owned).

Is $500 enough to trade forex? ›

Yes, $500 or $1000 is enough to get involved in forex. Well, this depends on how much you're risking per trade. If you risk $1000, then you can make an average of $20,000 per year. If you risk $3000, then you can make an average of $60,000 per year.

Can I trade forex with $200? ›

Trading forex with a $200 budget is feasible, but it comes with its unique challenges and limitations. Effective risk management, education, and a well-structured trading strategy are key to achieving success. While your budget may be small, your potential for learning and growth as a trader is not.

What is the golden rule in forex? ›

Let profits run and cut losses short Stop losses should never be moved away from the market. Be disciplined with yourself, when your stop loss level is touched, get out. If a trade is proving profitable, don't be afraid to track the market.

Top Articles
Latest Posts
Article information

Author: Nathanial Hackett

Last Updated:

Views: 5329

Rating: 4.1 / 5 (52 voted)

Reviews: 83% of readers found this page helpful

Author information

Name: Nathanial Hackett

Birthday: 1997-10-09

Address: Apt. 935 264 Abshire Canyon, South Nerissachester, NM 01800

Phone: +9752624861224

Job: Forward Technology Assistant

Hobby: Listening to music, Shopping, Vacation, Baton twirling, Flower arranging, Blacksmithing, Do it yourself

Introduction: My name is Nathanial Hackett, I am a lovely, curious, smiling, lively, thoughtful, courageous, lively person who loves writing and wants to share my knowledge and understanding with you.