Percentage of profitable accounts as reported to the NFA

Discussion in 'Brokers' started by foreigner, Apr 6, 2014.

  1. foreigner

    foreigner Est. 12480 Hours and Counting

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    Percentage of profitable accounts as reported to the NFA

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  2. jack

    jack Administrator Staff Member

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    Oddly not sorted by %, took me a sec to realize Citi is also pretty high on that list.

    Oanda used to score in the low 40's pretty consistently, they've slipped and don't appear to be recovering much.. I wonder if there's any correlation between this and introducing variable spreads (or any of the other changes they've made recently.)

    *ponders*

    And I've always thought it was odd that MBT was in the 20's on a near regular basis. Their offering on paper always seemed pretty decent.. wonder what gives.
     
  3. sqa

    sqa Village Scribe

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    Some of it is just going to be down to the areas they advertise and the people they attract.

    CitiFX's decent % makes sense, as it's 10k to open an account. Though, for that, they're a market maker.

    And, is it weird to say I thought the %s would be lower?
     
  4. slugFX

    slugFX Well-Known Member

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    Yea, what happened to that stat that 90% of FX traders fail?

     
  5. sqa

    sqa Village Scribe

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    Well, all of these accounts should be limited to 50:1 leverage. At 500:1, the odds of bombing out an account on 1 bad trade are really, really high. That might have something to do with it.

    Edit: I don't want to run all of the numbers, but it looks around 1/3rd of total accounts are profitable. So it might be said "go learn to play poker, it's probably more profitable" for most people.

    Still, 1 in 3 means it's quite doable, if you put in the work. Though I'd wager that most of those profitable accounts are the "side accounts" of other asset traders. No reason not to make some side money when you're a competent trader.
     
  6. jack

    jack Administrator Staff Member

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    Keep in mind that it's month to month numbers: meaning 40% profitable in the past month, doesn't mean the account is profitable overall.

    I personally think the failure rate is more like 95%+ on the retail side when you stretch out the timeframe by 5-10 years (..not to discourage anyone.)

    (Another thing to consider is the type of client a lot of brokers try to target; people who simply don't have the staying power or ability to put in the time/commitment it takes to do well in this industry...combined with people who don't have the capital to trade but can afford to open an account with $50-200... in fact, the 95%+ failure rate is not unexpected at all if you look at how low the barrier to entry is in the FX world.)
     

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