Exclusive: Q1 2014 US FX Account Profitability Report, Less Traders but More Profits

US retail forex brokers have issued their figures of client profitability and active account numbers for Q1 2014. During the quarter, 37.6% of traders were profitable, a 4.1% increase from Q4 2013.

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(Final results updated)

US retail Forex brokers have issued their figures of client profitability and active account numbers of non-discretionary accounts for Q1 2014. During the quarter, 37.6% of traders were profitable, a 4.1% increase from Q4 2013. The advancements in client performance occurred across the board, with Interactive Brokers being the sole broker to report its Forex customers having experienced a decline in profitability.

US Q1 2014 Forex Profitability and Active Account Report
US Q1 2014 Forex Profitability and Active Account Report

The more positive climate in trading though did little to help brokers expand their customer numbers, as the amount of non-discretionary traders placing trades during the quarter contracted by 1.8% to 94,869. The figures represent a multi-year of active retail Forex traders in the US. Some would consider this not surprising given restrictions that have been placed on brokers in the country causing the exodus of numerous firms such as GFT and Alpari. In addition to brokers, increases in regulatory reporting and fees have also made it more difficult for introducing brokers to actively market their services in the US, which in turn reduce marketing efforts to new forex customers in the country.

Active US Forex Non-Discretionary Accounts
Active US Forex Non-Discretionary Accounts

Among individual performers, Interactive Brokers (IB) once again took the top spot among major brokers as it had the highest amount of active traders as well as accounts being the most profitable. However, unlike previous quarters when IB outperformed other firms in account growth, its lead was cut in Q1, as active trader numbers declined by 3.6%.

Closing the gap to IB was FXCM and OANDA. With its slight gain of 95 accounts, OANDA registered the largest gain in active customers, as its total US non-discretionary traders grew to 20,341. OANDA’s traders also rebounded in terms of profitability, as 42.2% of account holders registered gains, versus 32.5% in Q4 2013. The Q4 2013 marked a multi-year low at OANDA, which representatives of the firm attributed to unique market conditions which affected their US customers adversely. Also rebounding was FXCM where profitability of US clients rose to 33% after being below the 30% market throughout 2012. However, like the majority of brokers, US client levels at FXCM contracted by 2.0% to 22,226.

Also of note, before deciding to exit the US market, ILQ ended Q1 2014 with 921 clients, 3.9% below the previous quarter. The exit of ILQ and its client base could cause further contraction of overall US active trader numbers during Q2.

(Author’s note: CitiFX figures are based on Q4 2013 results as the firm has yet to update their Q1 2014 figures. Due to Citi’s minor impact on overall averages, we went ahead with publishing the report before they filed and will update results accordingly)

Previous Reports: Q4 2013Q3 2013Q2 2013, Q1 2013, Q4 2012, Q3 2012, Q2 2012, Q1 2012

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  1. Retail Chump

    IB – Lowest costs & best product offering on this list (so not surprisingly has the most profitable clients). On the downside, a horrible platform, which puts many people off.
    Oanda – At a multi year low because retail chumps dislike: its increased spreads (Oanda was more competitive a few years ago), and several platform stability issues in 2013. To be fair, Oanda have addressed some of these issues – but not all.
    FXCM – Way too expensive (very wide spreads) & not impressed with their execution. They’re quite good on marketing though (and more popular in the US which has less choice of fx brokers) – which I guess explains some of their client growth.

    Overall, retail fx brokers still suck. If the institutional world opened up to the retail base, they would take all this flow & clean up. Total (hedged & unhedged) retail flow is circa 6% of the spot market, forecast to be 20% in a few years. The first mover will take (and likely keep) it all.

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  2. Retail Chump

    LMAX are fantastic – quite simply the best fx ‘broker’ available to the smaller capitalised trader. Love the MTF concept, and their platform stability, execution etc are superb. (Disclaimer – I am an LMAX customer).

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  3. Andy

    Agreed about lmax. Its probably the best sort of market access an individual can get at the moment, and it even has very low minimums compared to their direct competitors.

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  4. Michael Greenberg

    what do you think of the likes of LMAX as a rather institutional attempt at retail fx?

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