top of page
  • Writer's picturePassive Income Forex

Why do most traders lose?

Updated: Sep 3, 2023

Statistical data referenced on March 2021


Most people lose CFD, Forex 70% -80% of traders losing because of broker fees

During the past covid epidemic Small traders lose money on these highly leveraged derivative contracts. more than before

This type of high leverage Forex trading It is completely legal in the UK, EU, Australia, South Africa and other jurisdictions including America. they called “ Contracts for Difference” or CFDs and is designed for retail traders The hope is that you can make a lot of money quickly with little investment. The risk is high In theory, you could lose more than your account value. Therefore, a broker with good capital is very important.

And most traders lose money, with “most” meaning between 70% and 80% depending on the brokerage they trade with. We will go to the list of brokers in a moment. This is a dataset that surprises me that provides an interesting insight into how many traders engage in Forex trading that take advantage of Leverage regardless of spread or fees.

What is CFD and how is it different from futures?

CFD (Contract for Difference) is a contract between a trader and a broker. The security traded on the online platform is calculated by the change in the price of the underlying asset – in our case, the currency pair during the entry and exit of the trade. Unlike futures contracts It has no expiration date, CFD traders do not actually own the asset. It is speculation only.

Most Forex CFDs are regulated offshore, with some rules, European Securities and Markets Authority (ESMA) limits leverage up to 1000:1 for major currency pairs and 2000:1 for non-major currency pairs. may be much higher And just by choosing one broker, IUX Market offers leverage up to 2000:1, which seems common practice for highly liquid brokers.

In other words, CFDs, Forex are highly leveraged derivative contracts designed for individual traders where trading is not related to the exchange. Instead, trading takes place over the counter between the trader and the broker or market maker, including commercial banks.

FCA , FSA , ASIC , CYSEC , IFSC , which is like the SEC of the country that regulates the law in this regard. There was a new rule in the year. 2021 requires brokers to disclose on their homepage that Most of the people who use that service Lose money trading CFDs, Forex through their brokers. what percentage And this is where the information of these losing traders comes in.

He calls the dataset “Traders that Lose Money,” where brokers report truthful information that is traded in their brokers. because it was a very strict rule after this

Here is the chronological list of 36 CFD brokers worldwide, the percentage of their client accounts losing money as reported in the pre-Covid period, February and July, and the difference between the two months. And interesting story: 25 of 36 brokers reported in July that they were larger and in some cases a larger percentage of trading accounts lost more money in that reported month. February revelation And only 5 brokers reported less losing accounts.👇👇👇

Traders that Lose Money

It can be seen that most traders lose more than 70-80% on average.

But it can be seen that the only broker where almost 50% of traders make profits is IUX Market

the reason for this I don't have any clear information as brokers have to declare real Transection figures of all Profit – Loss trades according to their own Regulator rules in order to continue to hold the license.

But we analyze from the picture briefly that Most traders lose because the broker's fees are too high. Or some may give leverage as high as 2000 : 1 even with low spreads. But if the server is unstable and it may be intentional to put traders at a disadvantage in trading for just a second.

Because IUX Market is still not very popular in Thailand. But their system and fees are good and The cost of trading is very low. make traders easy profit Open and almost positive Also their servers are stable if they are actually trading.

🙏Thank you for coming from the article.


bottom of page