The US retail forex industry is now
showing obvious signs of slow down,
the number of non-discretionary retail forex accounts
held with US based reporting brokers
down to record 97,206,
the lowest count reported since Q3 2010
when first such report was released.
The extreme regulatory climate
has made it extremely difficult
for American brokers to attract new clients.
However, out of the top ten forex clients
listed the lowest recorded level of profitability
was circa 32%.
It’s fascinating how many of us would receive
a paradigm lightening bolt to our pre-conceptions
when hit with the kind of figure that led this article.
I’m not alone in taking ‘at face value’
some of the data and assumptions
that come our way as forex traders.
Instinctively I ‘knew’
that the unsubstantiated figure often hurled around trading forums;
that only 10% of traders are profitable, was nonsense.
Go now --> FXCC
Having enquired at director level
and read a comprehensive investors intelligence report,
the reasonable figure for success was estimated at 20%,
double the previous assumption,
but 39% certainly took many by surprise the first time it was published,
even more so that the top ten USA brokers have clients
enjoying a 32% success rate.
There is, however, a caveat, my twenty percent figure
includes spread betters who could in theory
be skewing the data
due to being much worse traders (en masse)
than pure play forex traders,
a theory worth examining at a later date.
Go now --> FXCC
A question often raised by these type of success stats is
“are a tiny percentage of successful traders distorting these figures?”
But generally percentages, averages
and the distribution of random data
doesn’t work like that,
and we should already know this being traders.
If circa 40% of trades are profitable
then the figure for the percentage of actual traders being profitable
will be fairly close to that number.
In the first paragraph we posed the question
why are so many traders unprofitable?
Well armed with this new information
I wonder if that assumption shouldn’t be examined in more detail.
Go now --> FXCC
Firstly, out of the circa 97,000 live accounts held in the USA
roughly one third are profitable,
now not all of these account holders will be full time
dedicated sole occupation forex traders,
some accounts would be used as ‘punting’ accounts,
folk who bet as opposed to trade
(and we can save the obvious cerebral discussion
on the difference for another time).
showing obvious signs of slow down,
the number of non-discretionary retail forex accounts
held with US based reporting brokers
down to record 97,206,
the lowest count reported since Q3 2010
when first such report was released.
The extreme regulatory climate
has made it extremely difficult
for American brokers to attract new clients.
However, out of the top ten forex clients
listed the lowest recorded level of profitability
was circa 32%.
It’s fascinating how many of us would receive
a paradigm lightening bolt to our pre-conceptions
when hit with the kind of figure that led this article.
I’m not alone in taking ‘at face value’
some of the data and assumptions
that come our way as forex traders.
Instinctively I ‘knew’
that the unsubstantiated figure often hurled around trading forums;
that only 10% of traders are profitable, was nonsense.
Go now --> FXCC
Having enquired at director level
and read a comprehensive investors intelligence report,
the reasonable figure for success was estimated at 20%,
double the previous assumption,
but 39% certainly took many by surprise the first time it was published,
even more so that the top ten USA brokers have clients
enjoying a 32% success rate.
There is, however, a caveat, my twenty percent figure
includes spread betters who could in theory
be skewing the data
due to being much worse traders (en masse)
than pure play forex traders,
a theory worth examining at a later date.
Go now --> FXCC
A question often raised by these type of success stats is
“are a tiny percentage of successful traders distorting these figures?”
But generally percentages, averages
and the distribution of random data
doesn’t work like that,
and we should already know this being traders.
If circa 40% of trades are profitable
then the figure for the percentage of actual traders being profitable
will be fairly close to that number.
In the first paragraph we posed the question
why are so many traders unprofitable?
Well armed with this new information
I wonder if that assumption shouldn’t be examined in more detail.
Go now --> FXCC
Firstly, out of the circa 97,000 live accounts held in the USA
roughly one third are profitable,
now not all of these account holders will be full time
dedicated sole occupation forex traders,
some accounts would be used as ‘punting’ accounts,
folk who bet as opposed to trade
(and we can save the obvious cerebral discussion
on the difference for another time).
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