I've heard that 90% of retail investors in FX lose money. I want to analyze this in more detail.

Question: Is there some literature that describes the statistics of profit/loss for retail traders in FX?

  1. I would be interested to see the distribution function - i.e. how many clients gaining how much money.

  2. How stable it is - with respect to time and other things e.g. country, currency pairs?

  • 3
    $\begingroup$ What is the reason for downvote ? $\endgroup$ May 12 '13 at 12:19
  • $\begingroup$ Here's a related post: quant.stackexchange.com/questions/1383/… $\endgroup$
    – bill_080
    May 12 '13 at 14:46
  • $\begingroup$ That "90% of retail investors" lose money in FX markets seems a bit anecdotal to me. I haven't seen any literature on this and I don't think you would easily be able to find it because it would either have to come from the investors which would introduce a multitude of biases in the data or their brokers which I would imagine is illegal in some way or another. $\endgroup$ May 15 '13 at 18:05
  • $\begingroup$ @user2183336 I believe that "statistic" relates to "bucket shops" and investors under 100k $\endgroup$
    – pyCthon
    May 17 '13 at 3:09
  • $\begingroup$ +1, but unlikely such statistics exist due to the reasons mentioned by @user2183336. What I've seen is mostly purely empirical estimates in introductions of books on technical analysis, together with reasons why so many people fail. In such a case, perhaps Taleb's book is worth reading. $\endgroup$
    – Ilya
    May 21 '13 at 11:41

The NFA member brokers report retail account profitability figures quarterly. There is a site that aggregates this data to facilitate comparisons. You can look back at the last several reports. You'll see that the correct figure is closer to 65% and that it's quite stable through time.


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