How many retail FX traders lose and how many gain? We look at the averages

Regulatory handbooks are long and weighty tomes, to say the least.

During the past few years, along with the numerous operational and infrastructural requirements from some of the world’s most respected financial markets authorities in major jurisdictions has come much transparency, along with equal amounts of confusion and expenditure of effort for them to be met.

In this world of post-MiFID II trading infrastructure, itself something that has been as clear as a foggy day in Manchester, with implementation having been fragmented to say the least, and many institutions, technology vendors and brokerages having done an admirable job of completing what can only be described as a ground-up restructure of the complex infrastructure of all components of the trading world with a very ambiguous definition from the authorities being at the helm of the direction.

Admirable indeed, and a clear demonstration of the mettle of the leaders of this industry.

As was expected, the regulatory wrangling did not stop at the need to adhere to new rulings, we have seen Australia’s highly technologically advanced regulatory authority ASIC attempt to make kneejerk reactive rulings against the CFD industry, and then renege on them very soon afterwards, at one point looking to decimate the leverage and method of sale utilized in retail CFDs, but with no clear indication of how this would work. The jury is still out.

In England, the Financial Conduct Authority (FCA) had gone down the route of making retail OTC derivatives companies with FCA licenses publish the average ratio of traders that lose money with that particular provider.

Whilst this is an attempt at advertorial transparency, it is perhaps tantamount to fearmongering. Regulated companies, especially those with London offices, are notoriously scrupulous and well organized, and often run by experienced professionals with longstanding leadership positions in the FX industry, therefore the British authorities attempt to display what looks like a disclaimer as used on some lowbrow High Street products is perhaps a bit crass.

By all means, point out the risks and give genuine figures, but why not print the winning figure average instead? It still sends out the same warning, but puts our industry in the light that it should be viewed in – as a genuine non-bank route of access to live markets.

Regulators have their gray suits, however and that is how the decision was made.

Thus, it is interesting to look at how each regulated brokerage which is under the MiFID II reporting rulings across Britain and Europe rates its winning and losing trades on the basis of this regulatory requirement.

Here is a table, demonstrating the profitable trading figures for the period from February 1, 2020  until April 30, 2020, reported mid-May, among FCA regulated brokerages: