Exclusive: Win-Loss Ratios of 33 Retail Brokers in July 2020

Source: Fazzaco 2020-08-07

According to the European Securities and Markets Authority (ESMA) new measures conducted in 2018, brokers must perform a standardized risk warning, including indicating percentage of losses on retail investor accounts.

Every EU-regulated broker is now visibly displaying such figures, so we collected a set of latest data from June, 2020, which provides valuable insight into the dealings of brokers.

Average Losing Rate Ups to 74.89%

We have collected a total of 33 brokers’ data. As you can see from the chart, the average winning rate is 25.11% and the average losing rate 74.89%, which improved a little compared with the win-loss ratios in June, 2020.

The losing ratio of Darwinex increased by 12%

It can be seen from this table that among the 33 brokers, 16 brokers keeps the the same losing ratio, 10 has higher, and only 6 brokers has lower losing ratio.

FX Primus is not included for lacking of win-loss data of July.

Of particular note was the change in the data for Darwinex and GKFX. The lossing ratio of Darwinex was 61 % in June, an increase of 12 % compared with 73 % in July,. By contrast, GKFX's losing ratio improved the most, from 81% in June to 73% in July.

Are ESMA’s Win-Loss Ratios Useful?

ESMA requires brokers to show win-loss ratios with the purpose to increase market transparency and alert traders to risks. But some people are skeptical on the rationality of mixture those lost one dollar with that lost over ten thousand. They think, it is entirely unreasonable for those people to be classed together.

This percentage doesn’t capture the intricacies of a client’s life-cycle, trading activity and losses.

The primary goal of this new regulation was to put a halt on misleading advertising, but the supranational regulator’s decision to put a spotlight on client losses also provides traders and brokers themselves with precious information.

But there is no denying that the win-loss ratios provides traders and brokers with precious information.

ESMA

investment

forex

forex brokers

Europe

Exclusive: Win-Loss Ratios of 33 Retail Brokers in July 2020

Subscribe to Our Newsletter!

Subscribe to Our Newsletter!