Forex trading is one of the most popular and accessible forms of trading in the financial market. It attracts a wide range of individuals, from beginners to experienced traders, who are looking to make a profit by speculating on the price movements of various currency pairs. However, the question of how many people succeed in forex is a complex one, as there are many factors that can influence success in this market.
Forex trading is a highly competitive and volatile market, with a lot of risks involved. It requires a lot of knowledge, skill, and discipline to become a successful trader. According to a survey conducted by the Bank for International Settlements (BIS) in 2019, the average daily trading volume in the forex market was $6.6 trillion, making it the largest financial market in the world. With such a large market size, it is no surprise that there are many successful traders in the forex market.
However, the success rate in forex trading is notoriously low. According to a study conducted by the National Futures Association (NFA) in the US, only about 20% of retail forex traders are profitable. This means that out of every five traders, only one is making a profit. The main reason for this low success rate is the lack of knowledge and experience among traders.
Forex trading is not a get-rich-quick scheme, and it requires a lot of hard work and dedication to become a successful trader. To succeed in forex trading, traders need to have a solid understanding of the market, including the factors that influence currency prices and the different trading strategies that can be used to make a profit. They also need to have a disciplined approach to trading, including the ability to manage risk and control their emotions.
Another factor that can influence success in forex trading is the level of capital that traders have available to them. Traders with larger trading accounts have a greater margin for error, as they can absorb losses more easily and have more trading opportunities. On the other hand, traders with smaller accounts may find it more difficult to make a profit, as they have less room for error and may be limited in their trading strategies.
In addition, traders need to have access to reliable trading platforms and tools, including charts, indicators, and news feeds. These tools can help traders to identify trading opportunities and make informed decisions about when to enter and exit trades.
Finally, traders need to have a strong mindset and be able to deal with the psychological pressures of trading. This includes the ability to manage emotions such as fear and greed, and to maintain a disciplined approach to trading.
In conclusion, the question of how many people succeed in forex is a complex one, as there are many factors that can influence success in this market. While the success rate in forex trading is notoriously low, there are still many successful traders in the market who have the knowledge, skill, and discipline to make a profit. To succeed in forex trading, traders need to have a solid understanding of the market, access to reliable trading platforms and tools, and a strong mindset that can withstand the psychological pressures of trading.