Client Profitability Statistics: Choose a Forex Broker Where You Are More Likely to Succeed

Choosing a right forex broker is key for investors to start a successful trading career. It's easy to find articles on how to select brokers, from which you can learn about useful information for comparing forex brokers, such as license, spreads, swap fees, deposit and withdrawal methods, minimum deposit, account types, leverage, and trading instruments.

In addition to these conventional ways, traders can also take a look at the broker's client profitability. The United Kingdom's Financial Conduct Authority (FCA) requires firms that offer CFDs and CFD-like options to retail consumers to provide a standardised risk warning, telling potential customers the percentage of the firm's retail client accounts that make losses. Since July 2021, Fazzaco has been releasing monthly clients profitability data of brokers regulated by the FCA.

Fazzaco has collected a total of 28 retail brokers' data in the past 12 months and calculated the mean and variance of these data.

As you can learn from the chart, Saxo Bank enjoys a relatively lower loss ratio among these brokers for the past 12 months, with an average losing rate of 63.75%. That is to say, 36.25% of retail investor accounts make profits when trading CFDs with this provider. By contrast, the highest loss ratio falls on Capital Index, where nearly 85 out of every 100 clients made losses and only 15 were profitable.

Moreover, we also calculated the variance of each broker over the past 12 months. It can be seen from this table that among the 28 brokers, eToro has the lowest variance of 0.44%. 67.67% of the broker's retail investor accounts lose money over the past 12 months.

Of particular note was the change in the data for blackwellglobal whose variance for the past 12 months reached 12.66%. Its lossing ratio improved the most, from 80.84% in July 2021 to 43.33% in June 2022. 

In order to get more clients, brokers can make more traders profitable by providing a good trading environment, continuous investment education and timely risk warnings. This is because by trading with them, traders will have a much smaller loss rate. Therefore an analysis of each broker's clients profitability data can make a difference in picking a good broker.

Forex trading comes with a high risk of losing money rapidly. As you can see from the above data, a minimum of 60% of traders are losing money. Please note that, all data come from the official website of each broker, and are for reference only.