We already know how much a futures account last in average.
I know there is people that think that the results of that speculation are not right and that a there are lots of traders who beat the futures markets and should make the result better in terms of duration.
They say: “well, there is a 95% of traders that lose but we are the 5% that win, so statistics should show a slightly better average”.
I still doubt that 5% of traders win doing day trading. Perhaps depending on the time frame they use to measure “win”.
In a way it is truth.
It is possible that 5% of traders doing day trading in a particular market win one particular year. Although it is truth that 95% of them will lose the next year, and so on until eventually the rate of successful day traders is virtually zero.
There are always people with a touch of luck.
Forex markets are not different to other markets, really.
These kinds of things happen here also.
You win for a while but eventually things back to normal.
We have people who discovered certain trading patterns and apply extreme scalping thinking that they can win 500% a month all the time.
The problem, as usual, is that the pattern disappears completely not long after.
You have to constantly look for patterns, and it is not easy to find good ones, still less to find one that will make you rich by “trading”.
One thing is trading on paper and another thing is trading for real.
Let us say that a typical Forex account has 2.000 GPB or USD.
Contrary to the futures markets, Forex offers a lot more flexibility and allows us to trade micro lots, which is much better for our money management.
It is not a good idea to try futures trading with a USD 2.000.
Example of a typical Forex account
Suppose that you want to trade the GBPUSD or EURUSD and open a 1.000 USD account.
That person should start trading with mircolots or mini lots, which would be 10.000 units contracts.
Althoug most traders, at least the novice ones, will try to trade whole lots of 100.000 USD.
They will therefore use a lot of leverage.
Imagine that the trader will pay 3 USD per side considering he is using an ECN broker.
The total cost will be 6 EUR plus the spread, which in this case would be from 0.3 for the EURUSD to the 0.7 for the GBPUSD.
Imagine that the average spread is 0.5 (we are optimistic here).
That is equivalent to a 5 EUR every time we trade.
So adding the commissions plus the spread we should have something like 16 EUR, or suppose USD for the sake of making it easier to see (it will depend on the rate exchange of the EURUSD but that is not really relevant here).
Well, considering that and assuming that the trader wins half of the times we should consider that a typical Forex account should last around 62 days in average.
Suppose that a monkey starts throwing darts to a buy and sell button using a Forex broker. That monkey will finish the Forex account after around 60 trades (actually, before he would need to reduce the size of the trade since a smaller account could not support a 100.000 contract).
Of course, there will be people who last more and some people who last less. But this is basically what the duration of a typical Forex account should be considering those conditions.
If the account is 3.000 USD then the duration should be 186 trades.
Those 186 trades could be accomplished in 3 months or 3 weeks, or even in 3 days.
There are bold people out there.
The amount of people trading 5, 10 or 20 times a day the Forex markets is staggering.
They think they can become the new masters of day trading but that is, of course, a chimera.
The vast majority of people who try that do not last more than one month trading. This is due to the fact that Forex is not a market where people trade modestly. It is a market where people use a lot of leverage.
The illusion of day trading is a good business for other parties, though.