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Forex multi-account manager Z-X-N
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In the field of forex trading, the behavior of successful traders often differs from the perceptions of the majority of the market. One typical characteristic is that forex traders who truly achieve stable profits generally do not establish communication groups, participate in group discussions, or respond to other traders' emails seeking advice.
This choice is not driven by "stinginess" or "arrogance," but rather by the core attributes of forex trading: independence and anti-consensus. It also reflects the inefficiency and risks of market communication groups (especially free ones), and serves as an important warning for novice traders on their growth path.
From the perspective of the core needs of successful traders, "rejecting group communication" is a necessary choice to maintain the stability of the trading system and the independence of decision-making. Forex trading is essentially a game between personal perception and market dynamics. Successful trading strategies often rely on a deep understanding of the market, strict risk control, and precise emotional management. Group communication (such as group discussions and frequent responses to inquiries) can lead to two core issues: first, cognitive interference. Different traders have different analytical logic and risk preferences. A complex array of opinions within a group (e.g., "Which instrument should I go long on?" or "Which point should I stop loss at?") can disrupt their strategic rhythm and lead to indecisive decision-making. Second, emotional contagion. The frequent boasting of profits and complaints about losses within a group can amplify traders' greed and fear. For example, seeing others post screenshots of their profits can lead to impulsive increases in positions, ultimately deviating from their established trading plans. Furthermore, successful traders focus their time and energy on market analysis, strategy optimization, and account management. Responding to inquiries and maintaining chat groups significantly distract from this core focus and align with the principle of focusing on key objectives for efficiency.
The "free forex discussion groups" often encountered by novice traders reveal significant flaws in their internal structure and information quality. Far from helping new traders grow, they can actually become "risk traps." Based on market realities, the people in these groups can be categorized into four groups, each driven by clear profit motives and offering virtually no positive value to new traders:
The first group consists of "platform salespeople," who comprise over 70% of the free groups and form the core group. Their primary goal is to acquire clients. They typically actively add new traders as "group members" and lure them into opening accounts and depositing funds on their partner platforms by exaggerating the platform's advantages (e.g., "extremely low spreads," "instant deposits and withdrawals," "stable trading with no slippage") while disguising risk information (e.g., "ambiguous regulatory qualifications" and "excessively high leverage risks"). These discussions are essentially "marketing promotions" rather than "professional guidance." If new traders fall for these claims, they risk losing their funds to non-compliant platforms and face difficulties in obtaining genuine trading support.
The second category consists of so-called "teachers or analysts" who attract attention by offering market analysis, trading strategies, and buy/sell signals. For example, they post specific trading advice in the group, such as "Go long on a certain instrument at X price" or "Stop loss on a certain currency pair at X pips," or share seemingly professional market analysis. However, their real goal is to convert paying customers. Information in free groups is often fragmented and low-value, easily overwhelmed by other irrelevant information, making it difficult for newcomers to gain effective insights. Their core strategies, however, can only be accessed through premium membership and exclusive services. More importantly, the expertise of these "teachers" is unverified, and the strategies they offer may be untested in the market. Blindly following them can lead to frequent losses.
The third category consists of "custodial copy traders." They primarily offer "account custody" and "automatic copy trading" services, attracting new traders by displaying screenshots of high-yield historical accounts and officially certified trading records. However, this type of information is highly inflated. Numerous instances of fabricating performance through manipulation of trading data, fabricating profit records, and filtering short-term market trends (e.g., displaying only profitable orders while hiding losing ones) are common in the market. New traders, lacking trading experience and the ability to discern data, are easily misled by these false profits, ultimately falling prey to scams that lead to "managed fund losses" and "copycat trading traps," even risking the loss of principal.
The fourth category is "profit show-offs," often experienced traders who share profit screenshots in group chats and boast about their market judgment accuracy (e.g., "I predicted a certain stock would rise long ago" or "I made an easy profit by predicting the direction"). This type of activity offers no practical value to new traders. Firstly, profit screenshots fail to reflect the complete trading logic and risk control (e.g., whether there are heavy positions or hidden losses). Secondly, post-hoc bragging is not replicable, preventing new traders from learning effective trading strategies. Instead, they may develop a "short-term profit mentality" out of envy of others' profits, leading to high-risk trading.
For novice traders looking to effectively improve their trading skills, they should abandon the notion of relying on free groups for value and instead opt for targeted paid learning. For example, they can seek out market-proven, reputable professional traders and receive customized guidance through one-on-one paid consultations, or join their compliant paid discussion groups. While paid learning still carries the risk of falling into traps (such as encountering fake mentors), the quality of information and professionalism offered by paid learning models far surpass those offered by free groups. Furthermore, the cost of paying a small amount for trial and error is manageable (compared to the potential for large losses later due to misleading guidance from free groups, the impact of a small consulting fee is minimal). More importantly, paid learning allows beginners to directly access systematic trading knowledge (such as risk control, strategy building, and emotion management) rather than fragmented, ineffective information. This helps establish sound trading knowledge and lays the foundation for long-term growth.
In summary, successful forex traders' decision to "reject group communication" is essentially a commitment to trading independence. Novice traders, on the other hand, need to recognize the inherent risks of free discussion groups and improve their skills through a "precise payment and focused focus" approach. Only then can they avoid social pitfalls in the market and embark on a path of steady trading growth.

In the practice of two-way forex trading, traders generally face contradictions and dilemmas stemming from capital size, market characteristics, and strategy suitability. This dilemma is not accidental, but rather the result of the combined effects of the forex market's operating principles, brokers' profit strategies, and the differing goals of traders with different capital sizes. This is particularly evident in the stark contrast and conflict in the strategic choices of traders with small and large capital, profoundly impacting trading results and market survival.
1. The short-term dilemma faced by small-capital traders: the dilemma of stopping losses or liquidation.
The mainstream trading strategy for small-cap traders (generally those with less than $10,000) is heavy short-term trading with stop-loss orders. However, in the current foreign exchange market, this strategy faces a fatal contradiction: "If you use a stop-loss order, you'll lose money; if you don't, you'll get liquidated." Market characteristics and broker profit models further exacerbate this dilemma.
Given the current operating characteristics of the foreign exchange market, the space for short-term trading has been severely squeezed. The global foreign exchange market is experiencing a period of low volatility and narrow consolidation. Central banks in major economies around the world (such as the Federal Reserve, the European Central Bank, and the Bank of Japan) have long implemented low or even negative interest rate policies. Furthermore, the interest rates of major currencies (such as the euro, yen, and pound sterling) are closely tied to those of the US dollar, leading to a continuous narrowing of interest rate differentials. Interest rate differentials are one of the core drivers of exchange rate fluctuations, and this narrowing has directly led to a significant reduction in the price volatility of currency pairs. The daily volatility of most major currency pairs (such as EUR/USD and USD/JPY) has remained within 0.5%-1% for a long time, far lower than the average volatility of 2%-3% a decade ago. Furthermore, the frequency of proactive central bank intervention has increased significantly. When exchange rates reach the policy tolerance limit, central banks will stabilize the exchange rate by selling or buying their own currency, further limiting the formation of trend-based market conditions. Consequently, sustained medium-term trends in foreign exchange currencies are almost nonexistent, with more frequent fluctuations in the range.
This "low volatility, trendless" market environment directly leads to an extremely scarce number of short-term trading opportunities. However, the vast majority of small-cap traders still cling to short-term trading, driven by a "profit anxiety due to limited capital." Even if they achieve an annualized return of 10%-20% if they choose long-term trading, they will struggle to see significant short-term capital growth (for example, a 20% annualized return on a $10,000 capital investment only adds $2,000 a year). This fails to meet their need for "rapid financial improvement," forcing them to rely on short-term trading for the "small-bucks-for-big-win" opportunity. However, short-term trends are inherently chaotic and random. Price fluctuations are significantly influenced by random factors like short-term capital flows and market sentiment, lacking predictable patterns. Even if traders set stop-loss orders, they can easily incur losses due to false breakouts and volatile losses. For example, within the EUR/USD's 0.8% daily range, setting a 5-pip stop-loss can lead to a rapid price correction upon hitting the stop-loss, creating a "stop-loss-and-reversal" situation. Over time, stop-loss triggers become far more frequent than profit opportunities, ultimately leading to a continuous drain on capital.
More importantly, the profit logic of forex brokers is fundamentally at odds with the short-term strategies of small-cap traders. Currently, most small and medium-sized brokers focus on "B-position business" (internal hedging). Their core revenue stream is derived from small-cap traders' stop-losses, losses, and margin calls. Small traders' losses are essentially the brokers' profits. Therefore, the concept of "stop-loss," often viewed by many novices as a "risk control tool," has, within the brokers' profit model, become a hidden tool for exploiting retail investors. However, paradoxically, if small traders don't set stop-loss orders during heavy short-term trades, the leverage amplification effect can quickly trigger a margin call and wipe out their principal if they encounter a negative fluctuation (even if the magnitude is small). Setting stop-loss orders, however, leads to a vicious cycle of frequent losses and capital depletion, ultimately forcing them to exit the forex market.
Even more seriously, small traders have virtually no "third option"—if they abandon short-term trading for long-term trading, their tiny capital cannot sustain the profitability required by long-term strategies. Long-term trading carries higher time costs and volatility risks, and profits rely on the formation of medium-term trends. However, small traders have limited capital, so even if they seize a long-term opportunity, the ultimate absolute return will be low (for example, with a $10,000 capital, a 10% profit on a long-term trade will only yield $1,000), far from meeting their expectations for "quick profits." Consequently, they find themselves in the ultimate dilemma of "short-term losses are inevitable, and long-term investment is useless."
II. Long-term strategies for large traders: Resolving the contradictions with a light-weight approach.
In stark contrast to the predicament faced by small-cap traders, large-cap traders (typically those with accounts exceeding $100,000) generally adopt a "light position, long-term, no stop-loss" trading approach. Through strategy design and position management, they successfully resolve the dilemma faced by small-cap traders and achieve a balance between risk and reward.
The core strategy of large-cap traders is to "place numerous light positions along the moving average." The essence of this strategy is "using position diversification to mitigate risk and using time to leverage trend gains." First, "light positions" are fundamental. Large-cap traders typically keep their single-product positions within 1%-2% of their account capital. By diversifying across multiple products and timeframes, they further minimize the impact of fluctuations in a single product on their account. Even in the event of a mid-term trend pullback, floating losses can be kept within a manageable range (usually no more than 5% of the account capital), avoiding "fear-based stop-losses" triggered by short-term fluctuations. Secondly, "following the moving average" is the core of the strategy. Large capital traders use medium- and long-term moving averages (such as the 200-day and 100-day moving averages) as a basis for trend analysis. They enter the market only when prices move in the direction of these moving averages, avoiding counter-trend trades and thus increasing the strategy's success rate. Furthermore, they utilize the moving average's "trend filtering" function to ignore short-term chaotic fluctuations and focus on medium-term trend opportunities.
More importantly, the "numerous small positions" layout effectively resolves the conflict between greed and fear. When the medium-term trend continues to extend, dispersed small positions can accumulate substantial unrealized profits. However, due to the low size of each position, traders will not be tempted to take profits prematurely due to excessive unrealized profits. Instead, they can patiently hold their positions and reap the full benefits of the trend. When the trend experiences a significant pullback, dispersed small positions may incur unrealized losses. However, because the overall position size is controllable, traders will not be tempted to panic and stop losses due to increasing unrealized losses. Instead, they can hold their positions and wait for the trend to return. This strategy design avoids both missing out on trends due to premature stop-loss orders and shrinking returns due to premature profit-taking, effectively managing emotions.
Furthermore, large-cap traders' "no stop-loss" strategy isn't a blind act of holding onto positions; it's based on their capital size and trend analysis. Large-cap traders have sufficient capital to withstand losses from mid-term pullbacks. Their trend analysis is based on fundamental factors like macroeconomic data and central bank policies, rather than short-term technical fluctuations. Therefore, they have greater confidence in the sustainability of the trend and don't need to rely on stop-loss orders to control risk. Furthermore, large-cap traders typically choose brokers offering "A-position services" (direct access to international markets). They don't have a counterparty relationship with their brokers, eliminating the worry that a stop-loss trigger could become a source of profit for the broker, further ensuring the viability of their long-term strategies.
Third, the essence of the dilemma faced by the two types of traders: a mismatch between capital size and market dynamics.
The different situations faced by traders with small and large capital are essentially a mismatch between capital size and market dynamics. The operating principles of the foreign exchange market dictate that low volatility and a lack of trend are the prevailing characteristics, and this trend is unlikely to change in the short term. Therefore, long-term strategies are more suitable for the market environment, while short-term strategies run counter to market principles.
The tragedy for small-cap traders is that their capital size dictates their need for "quick profits," forcing them to choose short-term strategies that contradict market principles, ultimately entrapped in the dilemma of "stop-loss or margin calls." The advantage for large-cap traders, on the other hand, lies in their capital scale, which can support the time cost of "waiting for a long time" and eliminates the need to rely on high leverage and large positions for short-term gains. Therefore, they can choose long-term strategies that align with market principles, resolving this conflict and achieving stable profits.
In summary, the dilemma faced by forex traders isn't a result of "mistaken strategy selection" but rather a fundamental conflict between "capital size and market principles." To overcome this dilemma, small-cap traders must first abandon the illusion of "quick profits" and instead focus on "lowering expectations, controlling leverage, and learning long-term strategies," gradually accumulating capital and experience. Large-cap traders, on the other hand, must adhere to the core strategies of "light positions, diversified strategies, and a long-term approach," avoid expanding positions out of greed, and maintain a constant respect for market principles. Only by achieving a perfect match between "capital size, strategy selection, and market dynamics" can one truly overcome this dilemma and achieve long-term, stable profits in forex trading.

In the financial investment sector, the varying difficulty levels of different trading categories stem from their underlying market characteristics and profit logic. However, two-way forex trading (specifically trading major currency pairs) is far more difficult than trading stocks and futures. This conclusion requires a thorough understanding of the nature of volatility, the certainty of opportunities, and the risk-return ratio.
Many investors mistakenly believe that the ease of forex trading stems from "high leverage." In reality, the opposite is true. The core difficulty of forex trading lies in its extremely small volatility, which results in a scarcity of certain trading opportunities. The threshold for stable profits is much higher than in the stock and futures markets. This cognitive bias is a major reason many new investors suffer losses.
The core difficulty of forex trading: the scarcity of opportunities amidst extremely small volatility. The difficulty of foreign exchange trading (taking the mainstream EUR/USD pair as an example) is primarily reflected in its low volatility and narrow trading range, which directly compresses profit margins and the certainty of opportunities. From a data perspective, the EUR/USD, the world's most traded currency pair, has an average daily volatility of only approximately 0.7%, and an annualized volatility as low as 10%. Even gold (XAU/USD), which commands high market attention and exhibits relatively high volatility, has an average daily volatility of only 1.5%, with most trading days fluctuating less than 1%. In stark contrast, in the stock market—taking A-shares as an example, individual stocks generally experience daily volatility of 3%-5%. It's common for stocks on the ChiNext and STAR Markets to experience daily limit-up (or limit-down) fluctuations of 20%, and some theme stocks can even experience daily fluctuations exceeding 30%. Futures markets (such as commodity futures) also experience significantly higher volatility than foreign exchange. For example, crude oil futures, influenced by geopolitical factors and supply and demand fluctuations, often experience daily fluctuations exceeding 5%.
The direct impact of this "extremely low volatility" on trading is the scarcity of certain opportunities. Within a narrow range, prices tend to exhibit "random walk" characteristics, significantly influenced by random factors such as short-term capital flows and market sentiment fluctuations, lacking predictable trend opportunities. For example, a 0.7% daily fluctuation in the EUR/USD pair corresponds to only approximately 70 pips (based on an exchange rate of 1.0800). After deducting transaction costs (spread + commission), the actual profit margin is less than 50 pips. Within this range, traders seeking to capitalize on short-term trading opportunities must precisely determine entry and exit points. However, due to the random nature of price fluctuations, most trades ultimately become "gambling on the direction," with the probability of long-term stable profits almost zero. In contrast, in the stock market, even without factoring in hype, relying solely on company fundamentals or technical trends, a single trade can yield returns of 10%-20%, offering far greater opportunity certainty and profit margins than forex.
Imbalanced risk-reward ratio: the "price-performance trap" of forex trading. From the perspective of the "return-to-risk ratio" (i.e., the potential return per unit of risk), forex trading offers a far lower price-performance ratio than stocks, futures, and other commodities, further increasing its trading difficulty. In the investment world, the return-to-risk ratio is a core metric for measuring strategy effectiveness. An ideal strategy should achieve "1 unit of risk for at least 1.5 units of return." However, the return-to-risk ratio in forex trading is generally below 1, and some established strategies only reach a ratio of 0.7, meaning "1 unit of risk for only 0.7 units of return." This imbalance of "risk outweighs reward" means that traders must tolerate a higher probability of loss to achieve profitability.
Compared to the stock market, high-quality strategies generally have a return-to-risk ratio exceeding 1.5. For example, a stock trading strategy based on moving average trends, with a 5% stop-loss (risk) setting, offers a potential profit margin of over 7.5%. Furthermore, due to the high volatility of stocks and the greater likelihood of trend continuity, both the strategy's win rate and profit potential are guaranteed. Some high-frequency trading strategies, such as quantitative arbitrage, even boast a return-to-risk ratio exceeding 3, meaning "1 unit of risk for 3 units of return," offering significant cost-effectiveness. The core reason for the imbalance in the risk-return ratio in forex trading remains "excessively low volatility." To cover transaction costs and generate substantial returns, traders are forced to increase leverage (some platforms offer leverage up to 1:500). However, this amplifying effect of leverage also increases risk. For example, with 1:100 leverage, a mere 1% negative fluctuation in the EUR/USD pair can result in a 100% loss (a margin call). In contrast, even with 1:1 leverage in the stock market, a 5% negative fluctuation only results in a 5% loss of principal, making the risk tolerance much greater than in forex. III. Prerequisites for Profiting in Forex: High, "Inhumane" Requirements
Although forex trading is extremely difficult, it's not completely impossible to achieve long-term profitability. However, profitability requires meeting a series of "inhumane" and strict conditions, which are difficult for most investors (especially newcomers) to meet.
First, strict position control is a core prerequisite. Due to the low volatility and low risk-return ratio of the forex market, heavy trading inevitably leads to "little fluctuations leading to margin calls." For example, if a person has $10,000 in their account and holds a large position of 1 standard lot of EUR/USD (a contract value of $100,000) with 1:100 leverage, a mere 0.1% (10 pips) reverse movement will trigger a forced liquidation. Therefore, experienced forex traders should limit their single-asset positions to less than 1% of their account balance (e.g., a single trade of no more than 0.1 standard lot for a $10,000 account), mitigating risk through "light position diversification." However, this type of position management contradicts the "quick profits" pursuit of most investors and can easily lead to anxiety caused by "slow profits," ultimately leading to the abandonment of the light position strategy.
Secondly, extreme patience is essential. Trending markets in the forex market are extremely rare, with most periods spent in range-bound fluctuations. Traders must wait weeks or even months to capture a valid trend opportunity. For example, medium-term trends in the EUR/USD (volatility exceeding 5%) occur only two to three times per year, each lasting one to two months, during which time they must withstand the pressure of multiple pullbacks resulting in unrealized losses. This "long wait" and "tolerance for unrealized losses" requirement places a significant challenge on traders' mental stability. New investors often lack patience and enter the market frequently, leading to accumulated losses.
Third, the ability to withstand long-term unrealized losses is crucial. Profits in forex trading aren't "instantly realized" but rather "accumulated over time." Even high-quality long-term strategies can experience unrealized losses for months. For example, a long-term EUR/USD strategy experienced three months of unrealized losses (up to 8% of account capital) during the 2023 Federal Reserve rate hike cycle, ultimately achieving profitability amidst the anticipation of rate cuts. This "loss-first, profit-later" model requires traders to possess sufficient financial reserves and a strong mental fortitude. New investors often "cannot tolerate unrealized losses" and prematurely cut losses, missing out on subsequent profit opportunities.
Fourth, risk management in extreme market conditions is a bottom line requirement. Although daily foreign exchange fluctuations are small, black swan events (such as sudden central bank interest rate hikes or geopolitical conflicts) can still trigger extreme volatility. For example, when the Bank of England urgently intervened in the British pound exchange rate in 2022, the GBP/USD exchange rate fluctuated by over 4% in a single day. Without risk mitigation measures, even a lightly-weighted account could face losses exceeding 20%, and heavily-weighted accounts could even face a margin call. Therefore, traders need to manage risk by diversifying their portfolios, setting up extreme market alerts, and reserving sufficient margin. However, many new traders lack risk awareness and ultimately lose their principal in extreme market conditions. Newcomer Warning: The Hidden Risks of Leverage. Despite the extreme difficulty of forex trading, a large number of new investors still choose to enter the market. The core reason is the illusion of short-term high returns brought about by high leverage. The forex market generally offers leverage ranging from 1:50 to 1:500. In theory, a $10,000 principal can be traded into contracts worth $500,000 to $5 million. With the right trades, returns exceeding 100% can be realized on a single trade. However, many new traders overlook the double-edged sword of leverage: while leverage amplifies returns, it also amplifies risks. Furthermore, due to the low volatility of the forex market, the "risk-amplifying effect" of leverage is even more pronounced. With a leverage ratio of 1:100, a 0.5% adverse fluctuation can result in a 50% loss of principal, and a 1% adverse fluctuation can lead to a liquidation. This "high risk" is far beyond the reach of new traders.
Even more alarmingly, new traders have a serious misconception about the difficulty of forex trading. They mistakenly believe that "low volatility equals low risk," overlooking the fact that low volatility leads to fewer opportunities and a lower risk-return ratio. They also mistakenly believe that "high leverage equals high returns," failing to realize that "high leverage also means a higher probability of liquidation." This misconception leads many new traders to experience liquidations shortly after entering the market. Even if some investors choose to defend their rights, they face difficulties obtaining effective compensation due to "own operational violations (such as heavy positions and high leverage)" or "platform compliance flaws (such as offshore regulations)," ultimately becoming "leeks" in the market.
Rationally consider the "difficulty level" of forex trading. Overall, the difficulty of two-way forex trading far exceeds that of stocks and futures. The core reasons are "minimal fluctuations leading to scarce opportunities," "unbalanced risk-return ratio," "strict profit requirements," and "high leverage" further amplifying the risk. For new investors, the forex market is not a "blue ocean of wealth," but rather a "high-risk trap." Even without considering platform compliance risks, the forex market is not an ideal investment option simply based on trading difficulty and risk-return ratio. If investors still insist on entering the forex market, they must first abandon the illusion of "quick profits" and start by learning the basics, practicing simulated trading, and trial and error with small positions, gradually establishing a trading system that suits them. They must also clearly understand that the long-term profit probability of forex trading is far lower than that of the stock market, and avoid cognitive biases that could lead to irreversible losses.

In two-way forex trading, small-capital forex traders tend to engage in short-term forex trading, primarily due to the market's lower entry barriers and the relatively low capital investment required.
Many investors seek to achieve large returns with a relatively small investment, and therefore have a particular preference for leveraged instruments. In contrast, the stock market's relatively high account opening threshold makes the forex market more attractive to small investors.
However, the difficulty of achieving profitability in short-term forex trading should not be underestimated. This sector is aptly described as "easy entry, hard exit." Small forex traders have limited funds, and short-term market trends often lack clear direction, exhibiting a high degree of randomness and arbitrariness. This makes the probability of profit from short-term trading extremely low, perhaps as little as 1% or even less. Under these circumstances, it is difficult for investors to achieve stable profits through short-term trading.
So, why can't short-term traders adopt long-term trading strategies? The key lies in the difference in position holding time. Short-term traders typically hold positions for very short periods, perhaps only tens of minutes or hours. After entering a position, they often face the reality of floating losses very quickly. Lacking the time and patience to wait for market trends to fully develop, they often cut their losses shortly. As a result, they struggle to grasp the essence of the classic trading strategy of "buy low, sell high." Ultimately, most short-term traders are forced to leave the forex market. Only those who truly understand and can apply these strategies can survive in the market over the long term.
In contrast, long-term forex investment is relatively easy to achieve profitability, but this requires investors to possess substantial financial resources. Traders who adopt a light-weight, long-term strategy are more prudent. They avoid rushing for quick results and patiently wait for favorable market opportunities. When the market experiences unrealized gains, they gradually increase their positions, achieving long-term wealth growth through the accumulation of small, steady profits. This strategy not only effectively mitigates the fear of unrealized losses but also curbs the greed that arises from unrealized gains. In contrast, heavy-weight short-term trading not only fails to mitigate these emotional disturbances but can also lead to frequent misjudgments due to short-term market fluctuations, exacerbating the risk of losses.
In summary, in the two-way nature of forex trading, small investors must fully understand the high risks and low probability of profit when choosing short-term trading. While long-term investment is relatively stable, it also requires investors to possess sufficient financial resources and patience. When choosing a trading strategy, investors should make informed decisions based on their financial situation, risk tolerance, and investment objectives.

In the forex two-way trading market, the difficulty of generating profits is directly correlated with the volatility of the underlying asset. The narrow range of fluctuations in forex currencies (especially major global currency pairs) is the core objective factor that makes it difficult for most traders to achieve profitability.
This conclusion is not subjective but based on the operating principles of the forex market, long-term data statistics, and a horizontal comparison with the stock market. It also effectively addresses the objection of some traders that "forex trading offers stable profits" and reveals the true picture of market profitability.
The difficulty of generating profits in forex currencies stems primarily from their inherent characteristics of "low volatility and narrow trading ranges." These characteristics directly compress traders' profit margins and increase profit uncertainty. From the perspective of global major currencies volatility data for current currency pairs shows that the average daily volatility of core currency pairs like EUR/USD and USD/JPY generally remains between 0.5% and 1%, with an annualized volatility of less than 15%. Even during the release of major news (such as the Federal Reserve's interest rate decision or non-farm payroll data), daily fluctuations rarely exceed 2%. In contrast, the average daily volatility of individual stocks in the stock market can reach 3% to 5%, with some theme stocks or growth stocks experiencing daily fluctuations exceeding 10%. Futures markets (such as crude oil and gold) experience even greater volatility. This difference in volatility directly determines the profit potential of different markets.
From the underlying logic of profitable trading, "volatility is the source of profit"—only sufficient volatility can provide traders with opportunities to profit after covering transaction costs (spreads, fees, and slippage). Taking EUR/USD trading as an example, if a trader enters a long position at 1.0800, sets a target price of 1.0850 (50 pips profit), and a stop-loss price of 1.0780 (20 pips risk), this might appear to have a 2.5:1 profit-to-loss ratio. However, in actual trading, the spread may increase by 5-10 pips, and slippage may consume another 5 pips, ultimately resulting in a profit margin of only 30-40 pips. If the price fluctuates by only 30 pips before retracing, the trader will be caught in a dilemma: not meeting expected profits but unwilling to trigger their stop-loss. In the stock market, if a stock is entered at 10 yuan per share, with a target price of 11 yuan per share (10% profit), and a stop-loss price of 9.8 yuan per share (2% risk), even after deducting 0.1% transaction costs, there is still a 9.8% net profit margin. The probability of the stock price reaching the target price is much higher than the probability of achieving a 50-pips profit in the forex currency pair.
More importantly, the narrow range of fluctuations in foreign exchange currencies is often accompanied by a high degree of randomness. Due to the small fluctuations, prices are easily affected by random factors such as short-term capital flows and high-frequency market sentiment, resulting in a "back-and-forth" random walk rather than a trend. For example, the EUR/USD may fluctuate repeatedly between 1.0800 and 1.0820 within a one-hour period. Even if a trader correctly identifies the medium- to long-term trend, short-term stop-loss orders may be triggered by random fluctuations, leading to a situation where they "identify the direction correctly but still lose money." This combination of "low volatility + high randomness" means that profiting in forex trading requires not only "correct judgment" but also "precise entry timing," significantly raising the profit threshold.
To refute the argument that "forex is profitable," two core facts must be clarified: First, the notion that "a few individuals profit" is a classic example of "survivorship bias" and cannot represent the overall market situation. Second, long-term, large-sample statistical data can more objectively reflect the difficulty of profiting in the forex market. Actual statistical results show that the loss rate in the forex market far exceeds that in the stock market, and the life cycle of traders is extremely short.
Specific statistics from the foreign exchange market, including long-term tracking data from a large, compliant foreign exchange trading platform, show that over 99% of clients experienced losses over a two-year period. Approximately 85% of these clients lost over 80% of their principal, while less than 1% achieved positive account balance growth. This statistical sample covers traders from different regions and with varying capital sizes (ranging from $100 to $100,000). The statistical period spans two years (including diverse market environments, such as the Federal Reserve's interest rate hike cycle and the Eurozone's easing cycle), thus avoiding the "accidental effects of short-term market fluctuations" and making the data highly representative and convincing. In terms of the causes of losses, in addition to the aforementioned "low volatility and insufficient profit margins," most clients also suffer from "heavy trading," "frequent short-term trading," and "lack of risk control." The root cause of these problems remains the "rush to profit within a narrow range of fluctuations." Due to low volatility and slow returns from conventional trading, traders resort to increasing leverage and trading frequency to pursue gains, ultimately accelerating losses.
Another key piece of data reveals the short lifecycle of forex traders: the vast majority of forex investors only last six months. This means that over 80% of traders are forced to stop trading within six months of opening an account due to losses exceeding 90% of their principal, or exit the market due to a lack of profit prospects. This data, collected from internal client operations reports of multiple forex brokers (independent statistics), encompasses over 100,000 accounts and further confirms the high attrition rate in the forex market. Compared with the stock market, the profit and loss statistics of stock investors in the first half of 2023 show that the proportion of A-share investors who suffered "heavy losses" (losses exceeding 50%) was 58%, the proportion of "small losses" (losses of 10%-50%) was 9%, the proportion of "break-even" was 4%, and the proportion of "profitable" (including small profits and large profits) was 29% - if "break-even" is included in the category of "no loss", the proportion of A-share investors who did not lose money in the first half of 2023 reached 33% (about 1/3), and the investment life cycle of most investors is far more than half a year. Even if they suffer short-term losses, they will choose to continue holding positions or adjust strategies rather than leave immediately.
Regarding the criticism that "stock market data only covers the first half of 2023, making it unscientific to compare with long-term foreign exchange data," we can further explain this from the perspective of "fundamental market differences": the stock market's profit logic is underpinned by "corporate value growth"—even with short-term stock price fluctuations, over the long term, the share prices of high-quality companies will rise as their performance grows, offering investors the possibility of "long-term return on investment and profit." Profits in the foreign exchange market, on the other hand, rely entirely on "exchange rate fluctuations and spreads," lacking the underlying logic of "value growth." If a short-term loss is incurred, the probability of long-term return on investment is extremely low unless a strategy is changed. This is the core reason why forex traders have shorter lifespans than stock investors. For example, if a stock investor holds a high-quality blue-chip stock, even if they suffer a short-term 20% loss, if they hold it for a long time (e.g., 3-5 years), they are likely to recoup their investment or even make a profit as the company's performance grows. However, if a forex trader continues to use their original strategy after a 20% loss, the loss is likely to continue to expand, ultimately depleting their principal within six months, as exchange rates lack the support of "value growth."
Some traders argue that it's difficult to profit in the forex market by citing their own profits. However, this is actually a cognitive error caused by "survivorship bias"—they ignore the proportional relationship between the "few winners" and the "majority of losers" and equate individual experience with the market's general state. From a foreign exchange market perspective, the profitable minority typically possess three core competencies: first, "deep market knowledge," enabling them to accurately assess the medium- and long-term impact of macroeconomics and central bank policies on exchange rates, rather than relying on short-term technical indicators; second, "strict risk control," maintaining a single position within 1% and possessing contingency plans for black swan events; and third, "strong mental management," enabling them to endure months of unrealized losses and steadfastly adhere to a long-term strategy. Most losing traders lack these qualities, relying solely on "short-term luck" or a single strategy, resulting in highly sporadic and unsustainable profits.
From the perspective of the overall market ecosystem, the profit model of forex brokers indirectly confirms the fact that "most traders lose money"—most small and medium-sized forex brokers focus on "B-position business" (internal hedging), and their core revenue comes from traders' stop-losses, losses, and margin calls. If most traders are profitable, brokers will face continuous losses and be unable to maintain operations, which indirectly demonstrates that "forex profits are rare." In contrast, in the stock market, brokerage profits mainly rely on trading commissions and service fees, which are not directly related to investors' profits and losses. Even if most investors are profitable, brokerages can still generate profits through "trading volume growth," which also makes the stock market's profit ecosystem more inclusive.
It should be clarified that "profitability in the forex market" does not deny the possibility of individual profits—there are indeed a few professional traders who can consistently profit in the forex market, but these are "individual exceptions" and cannot represent the overall market level. From a rational perspective, investment decisions should focus on the market's average profit probability rather than individual exceptions. If 99% of participants in a market lose money, even if there's a 1% profit winner, the average investor still faces a 99% chance of losing money, making this a poor investment. On the other hand, 33% of investors in the stock market don't lose money. Through learning and strategy optimization, the average investor's probability of achieving profit is much higher than in the forex market.
Combining the volatility characteristics of forex currencies, statistical comparisons, and market ecosystem analysis, we can clearly conclude that profiting in the forex market is far more challenging than in the stock market. The core reason for this is that the narrow range of forex fluctuations compresses profit margins, the high degree of randomness increases profit uncertainty, and long-term data shows that the loss rate far exceeds that of the stock market, resulting in an extremely short trader lifecycle.
Ordinary investors should rationally understand the difficulty of profiting in different markets and avoid being seduced by the promise of "high leverage and short-term high returns." If they lack professional forex market knowledge, strict risk control, and strong mindset management, they should prioritize markets with more friendly profit ecosystems and clearer underlying logic, such as stocks. If they insist on participating in forex trading, they should be prepared for "long-term learning and trial and error with small amounts of capital." They should start with simulated trading and gradually establish a systematic trading system. At the same time, they should lower their profit expectations, accept the reality that "short-term profits are difficult," and avoid the pitfalls of rushing for quick results and engaging in heavy positions and high-frequency trading.
Ultimately, investment decisions should be based on the compatibility between one's own capabilities and market difficulty. The forex market is not "absolutely unprofitable," but for the vast majority of ordinary investors, its difficulty far exceeds their capabilities. Choosing a more suitable investment category is the rational choice for achieving long-term, stable returns.

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