The REAL Reason 98% of FOREX Traders Are LOSERS! (Truth Hurts)

98% of retail forex traders are losers and it's impossible for them to ever win. They're playing in a rigged game and they don't even realize it. Every system, chart and indicator they use will always result in losses because the market is structured to guarantee failure. It's not that there's a conspiracy against retail traders, it's simply the way that Forex is designed and 98% of people are unaware of it. I promise this video is not like anything you've seen before. It might even be hard to watch. And if you like living in a delusion and the truth hurts, maybe you shouldn't watch. Be prepared for a lot of facts and figures, but trust me, this is worth it. And it may be the most important video on Forex you ever see. Forex is the biggest market in the world with seven and a half trillion dollars traded every day. That's 30 times greater than the entire global GDP and nearly 400 times bigger than the New York Stock Exchange. And that's probably the most misleading statistic in Forex and where all of the problems begin. The Forex market includes spot FX, swaps, forwards, currency swaps and options. We trade the spot market, which is only 28% of the overall market. We may trade this, but it's the least important segment of the market. It's also the simplest. It's a straight exchange of one currency for another at an agreed rate there. And then the forward market is the exchange of one currency for another at a price we agree on today, but don't take delivery of until sometime in the future, usually 1 to 12 months. People use this when they are trying to avoid the risk of currency fluctuations. For example, imagine I was building a new house in the French Alps and the whole thing was going to cost 1 million euros. Right now that's about £880,000. But in the year that it takes for the construction to finish and I need to pay the builder, the exchange rate may have changed and it will cost me an extra £100,000. So I use a forward contract to protect myself. Forwards are a derivative market, meaning it derives its price from the spot market. The option market is very similar, but this time it's the right but not the obligation to exchange at a pre agreed rate on a specified date in the future. So this is more flexible. Using my house building example, again, in a year's time when I have to hand over the money, if the pound has depreciated against the euro, meaning it's now going to cost me More, I would exercise my right on the option. I'd exchange my money at the pre agreed price. I wouldn't lose anything. But if the pound appreciated against the euro, meaning it would now cost me less, I'd let that option expire. I would exchange my money at the current spot rate and I'd have some profit left over. Next we have the FX swaps, which is the biggest segment overall. It's the exchange of one currency for another with two different dates, which means it's a spot transaction and a forward contract taken out at the same time. I may be a UK based online retailer who makes a lot of sales in the US using dollars. If I need cash flow for short term operating costs, I can convert my dollars to pounds in the spot market. But I may have to pay a bill to a US supplier at the end of the month. The exchange rate by then may mean that when I change my pounds for dollars it costs me more. So to protect myself, I execute a one month swap. I sell my US dollars and I buy British pounds in the spot market. And I simultaneously buy US Dollars and sell British pounds on a one month forward contract for exactly the same price. This way I, I get my hands on the money that I need to use now, but I'm also protected for the right price on a deal I know I have to make at the end of the month. And finally you can see a very small segment there for currency swaps. A currency swap is almost identical to an FX swap, but these are more complicated because they include interest rate payments and extend out for up to 30 years. Whereas almost 99% of FX swaps are arranged for less than one year. Stop and consider what understanding of these market segments means. FX swaps and currency swaps account for 53% of all transactions and the whole point of them is to avoid price movement. Forwards and options are hedges designed to protect you from changes in price. In total, that's 72% of the market by structure. That has nothing to do with with speculating. And it's going to get worse when we look at the participants. 42% are reporting dealers, 51% are other financial institutions and 7% are non financial customers. Reporting dealers are large commercial and investment banks. This is the tier one interbank market. The other financial institutions are the non reporting banks which are the smaller banks or the smaller market makers and dealers. Institutional investors which are pension funds, mutual funds, insurance companies and so on. Hedge funds and money managers, which includes commodity trading advisors and principal trading firms. The official sector which are central Banks and sovereign funds and other which are what they call retail brokerages. And finally the non financial customers who are corporations and businesses. Right, let's simplify this. Reporting dealers and non reporting banks are primarily market makers and dealing desks. These are the providers of liquidity or are executing on behalf of clients, which you'll know about if you've watched my previous videos. That's 64% of the market volume that has nothing to do with speculation. Then you have 16% coming from institutional investors. These are pension funds and insurance companies who are used in the forex market to hedge their portfolio risks. Add the 7% from the corporations and businesses in the non financial customers and you have a total of 87% of the forex market volume. And as non speculative, all of these participants ideally wish the price never changes. That leaves US with best 13% of the market participants involved in speculation. But now let's look at the spot market, because that's the one that matters to us. The spot market is 28% forex overall with a daily turnover of just short of $2.1 trillion. That turnover by market participant breaks down as follows. 37% by reporting dealers. Remember, these are the largest tier one banks that form the core of the interbank market. These are the biggest market makers. 21% are the smaller non reporting dealers, which are the smaller commercial and investment banks or the smaller market makers. 18% are the institutional investors, pension funds, insurance funds, etc. Hedge funds and principal trading firms make up 12%. The official sector central banks are 1%. The others, which are the retail brokers, make up 4%. And finally the non financial customers, corporations and businesses account for 7%. Looking at that, you can see that 83% of the turnover volume in the spot market is non speculative, with 17% at best being considered speculation. If we compare the spot market to the entire market, spot is slightly more speculative. But regardless, it's still a small minority of total market turnover. It's almost a 5 to 1 ratio of non speculative to speculative. Retail trading accounts for only 3.6% of the spot market. This is a very different reality compared to what most retail traders have been taught. But the next part is going to shatter every belief you have about Forex. When we say that 87% of all forex trading is non speculative, carried out by people with with no interest where the price goes next. We're talking about real volume. So only 13% of real volume is produced by market participants who are looking at charts and are interested in where the price goes. Next. But as for the price charts, 96% of all price changes have no real volume behind them whatsoever. If you've seen some of my other videos on the channel, you'll know about triangular equilibrium. The price on every pair must mathematically be aligned at all times. If not, arbitrage traders would come in and exploit a glaring inefficiency in the market and make staggering profits. So all price alignments are controlled via an automated algorithm. If you multiply the price of the euro pound by the pound U.S. dollar you get the price of the euro U.S. dollar. If you divide the euro U.S. dollar by the euro pounds you'll get the price of the pound U.S. dollar. And if you divide the euro U.S. dollar by the pound U.S. dollar you will get the price of the euro pound. This is an exercise that you can confirm for yourself on your own charts. So an order on one pair means the price on the other directly connected pairs is instantly changed, even though no orders were placed on those. And every currency in a triangle is at the apex of another connected triangle, meaning every pair in the market is connected via this algorithmic pricing formula. And a real order on one pair results in every other pair's price being instantly recalculated and changed. And 96% of price changes in Forex happened like this. They are ghost moves with zero real order volume. So only 4% of price changes on price charts happen because of real order volume. And we've just seen that only 13% of real order volume comes from speculators betting on price direction. Shockingly, that means only 0.52% of the price moves on your charts are from speculation. 99.48% of price changes are either empty algorithmic adjustments or are from participants who couldn't care less where the price goes next because they are hedged and protected against the move. Forex is not designed nor primarily used for speculation. It is a utilitarian market. You now understand why the trading systems and strategies and indicators promoted on forums and social media and by fake gurus don't work. Why 98% of traders fail and will always fail. One of the most common defenses of technical analysis is with everyone looking at the same charts and the price levels, indicators become self fulfilling as everyone reacts to the same patterns. Almost nobody is looking at the charts. Your indicators don't predict anything. Retail traders fail because they simply have no concept whatsoever about the market they are participating in. The strategies and tools they use were designed for stocks or other speculative markets, not Forex. It's like trying to play football, but using the rules and the equipment for tennis. Now all of this may sound rather bleak, but it's actually really good news. In a non speculative market there is less competition and no manipulation. Trading is a zero sum game. For you to win a dollar, someone else must lose a dollar. If you In Forex, most participants aren't paying attention. Trillions of dollars are put in every day and it's just sitting there for you to collect. It's easy money if you know how the market really works and you know how to exploit the inefficiencies. I work with clients one on one and you wouldn't believe how quickly people can go from total beginner to being able to quit their day job simply because they begin to trade Forex the way Forex was designed. All it takes is an accurate understanding of the real market and hopefully this video has been an eye opener for you. This is the third video in a series, at the end of which you should have nearly all of the information and knowledge you need to be able to start making money as a profitable trader. So be sure to check out my channel and keep looking out for the next videos. If you've enjoyed this video, please leave a comment a like and consider subscribing to the channel as your engagement will help me be able to continue putting content like this out for you to benefit from. So thank you and I will see you next time.