The question of merit or loss in Forex trading is the most discussed, emotionally the hardest loaded question at all, which is why the following statement is to initially start with facts that completely come from the trader in the world. After that, the editorial staff is dedicated as usual to the delight of the audience some general considerations.

Merit specifications of German and international traders

The German Trader  Simon Betschinger , born in 1980 and qualified economist, puts his performance open, he occupied them with bank statements, which is not at all unusual in the Trader world.

He started a real trading account (after several preliminary experiments with losses and stagnation phases) in April 2006 and began 100,000 euros. Its certified merits were:

  • 2006: +58,377 €
  • 2007: +367,000 €
  • 2008: +140,000 €
  • 2009: +362,000 €
  • 2010: +236,800 €
  • 2011: +70,000 €
  • 2012: +130,000 euros (preliminary results)
cumulative extent to Betschinger, that started higher sums than the initial 100,000 euros, it does not occupy in detail, but it is due to the performance of at least the years 2007 to 2010 suggest. It is by no means obvious to cumulate, even most stock brokers do not cumulate complete.

The American Trader Joe Ross, born about 1938-1940 and still active trader, author and instructor, mentioned in one of his books ( "day trading") expressly states that it leaves no more money on the trading account etoro doesn't seem like a scam right when he needed to trade. The argument against a permanent accumulation, but Ross started at a young age of 23 with borrowed from his relatives 5,000 US dollars and generated in the first six months, 43,000 dollars, which is only possible with cumulation.

The traders of the German Trading Services  not make clear with their platform magnificent money, but with their private trading. Who opened a fee-based customer access, should the accounts of the Chief Harald Weygand, see (a learned doctor), whose performance was in 2009 at around 90%, he had almost all his capital (originally 20,000 euros) destroyed.

The American trader Richard Dennis (born in 1949) was known for his Turtle Trader experiment. He trained young traders in the 1980s with a certain strategy that still is used as Turtle Strategy trailers, and pressed each of the 10 selected participants a starting capital between 500,000 and two million dollars in the hand because he wanted the aspirants trade with real money. They were allowed to do what they want, and it was Dennis' private money. That can only afford someone who earns real money in trading. So much for the facts.

Reflections on statistics

Basically Trading begins just as any economic activity that is always associated with speculation, gains and losses. This can be traced on the smallest and most private life. You are a housewife or house husband and calculate your weekend shopping:

You can go to Aldi or purchase land around the corner. Aldi to take a bit longer, also do not know if there is anything there. You might have to end up yet again to purchase land and have therefore spared nothing at Aldi detour, but lost a few cents on fuel costs in the end. You can also from gas station is plus500 a legitimate website to gas station go to look for the best prices, find the offer with two cents on savings and have this process half a liter of fuel unnecessarily, but this is not bad: You have just speculation.

Independent traders can sing a song about it, they speculate in every handshake, which they do: Should I turn this or that advertising? Should I switch suppliers? What could it bring? So it goes in trading, but highly compressed, and that's the problem, because of which Jesse Livermore shot. It is so simple to reserve a security tightened a stop and cut once just 1,000 euros to the head, it does not hurt, only the money is gone.

The problem goes much deeper than most people think, because it is a question of our perception of statistically detectable probabilities . The mathematician Carl Friedrich Gauss (1777 - 1857) invented the bell curve that determines our statistical understanding today. Accordingly, it is very likely (the dome of the bell) and less likely (the edges) events, and so we look at the world today, whether as a housewife, motorists or trader.

But this model is highly imperfect, the world is with our current statistical understanding - beware Marxists! - NOT visible. Why a process takes place, knows in truth no one, there are altogether improbable events like a tsunami Fukushima, together with subsequent stock market crash, an American sub-prime crisis and subsequent halving of global stock market values or Islamist Spinner flying into the World Trade Center - Crash. There are also many bubbles and mini-events that can foresee no man, and indeed every day.

The stock market events are not predictable. The math genius Benoit Mandelbrot has toiled all his life so used fractal geometry and this and that, he came to the same conclusion. You can still make money in the stock market? - You can, for example Betschinger proves.

Capital curves and the accumulation of capital Trading

The traders who make profits on the stock market, a set of rules for different stock market conditions have increased, the
  1. is well founded and that they
  2. adhere strictly.
To comply with these rules include the  strict money management , which requires each trader, never more than to risk one to two percent of its total available capital for a trade. This capital is the one that you have planned for your trading activities and can lose theoretically.

but change the situations, some rules work one year or two years, then for a while and then not again. You need to apply different rules, and here you may use the Gaussian bell curve statistics certainly use: If your old rules have been enough for a positive performance, which in a capital curve including drawdowns (decline) can be read, you can keep them.

- Lucia