Process and psychology
How most retail accounts do
Regulators found that most retail leveraged accounts lose money.
Well documented
Found repeatedly in peer-reviewed work or regulator data.
Regulator data. The French figure comes from a trade-press summary of the primary report.
What it is
European regulators reported 74 to 89% of retail CFD accounts typically lose money; the UK regulator found 82% in a sample; a French study of forex accounts found about 89% lost; a Brazilian study found 97% of persistent day traders lost.
What it suggests
This is the base rate the plan is up against. It is a reason to take costs, size and discipline seriously.
How to check it
Judge a plan by its full record after costs.
Common mistakes
- Assuming the numbers are for someone else.
Sources
- ESMA (22 March 2018), ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors: 74-89% of retail CFD accounts typically lose money (abstract or primary page read)
- FCA (December 2016), consultation on stricter rules for contracts for difference: 82% of clients in a representative sample lost money (abstract or primary page read)
- AMF (France), study of 14,799 retail forex accounts 2009-2012: about 89% lost money (trade-press summary; primary report not opened) (citation and headline finding only)
- Chague, De-Losso and Giovannetti (2019/2020), Day trading for a living? SSRN 3423101 (Brazilian index futures; 97% of those who persisted 300 days lost money) (citation and headline finding only)
Related lessons
Written in our own words. Education only, not financial advice.