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The Myth of 99% Trader Failure: The Facts You Need to Know

Many individuals enter the forex world with hopes of making significant profits, often without fully realizing the accompanying risks of losses. Many are tempted by enticing profit promises, but the reality is not all traders achieve the dreamed success. The news that 99% of forex traders fail is often a common topic of discussion and can demotivate many. But how accurate is this figure?

Uncovering the Facts Behind the Assumption

The main question that arises is whether it's true that 99% of traders fail.

To get a more accurate picture, it's important to look at relevant data and regulations. ESMA (European Securities and Markets Authority), a leading forex regulatory body, has imposed certain policies on forex brokers, such as the obligation to present the percentage of clients experiencing losses. As a result, the percentage of forex trader failures under ESMA regulation ranges between 65-89%, with an average around 77%.

Risk Management for Trading Success

Although the failure rate is not as extreme as believed by many, forex trading still carries high risks. Therefore, it's important to manage risks wisely to achieve long-term success. Some steps that can be taken include:

  1. 1. Be Prepared to Lose Capital

    • The main difference between amateur and professional traders lies in their ability to protect capital. By implementing proper Money Management and Risk/Reward Ratio, the risk of loss can be minimized.

  2. 2. Wisely Utilize Leverage

    • Wise use of leverage is key to protecting trading funds. Understanding how to calculate margin and leverage, as well as paying attention to associated costs, can help avoid trading failures.

  3. 3. Use "Idle" Funds

    • Avoid using funds allocated for daily expenses or loans. Forex trading should be considered a side venture, and the capital ready to be risked should be carefully considered.

  4. 4. Utilize No Deposit Bonuses for Learning

    • For beginners, using a No Deposit Bonus from a broker can be an effective way to start real trading without significant financial risk. This also aids in skill development and psychological trading control.

  5. While the assumption that 99% of forex traders fail can be too dramatic, the reality is the failure rate is still high. However, with a prudent approach, proper risk management, and sufficient knowledge, you can increase your chances of success in forex trading. Don't be too influenced by dramatic figures, but remain vigilant to the risks inherent in the trading world.

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