Q2 2012: profitability of forex traders keeps dropping, OANDA back on top

In Q2 2012 profitability of US Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term traders kept dropping albeit the change was less than in Q1 2012: -1.1% and -1.9% respectively.

GFT's profitability 'plummeted' meaning it lost its crown to OANDA again and dropped 5 places in this ranking.

Number of forex accounts dropped by almost 2,000 (excluding Interactive Brokers which still didn't report) and the only ones able to grow were Alpari, ILQ, Forex Club and Advanced Markets. It's possible that May's Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term had something to do with this.

For obvious reasons PFG is excluded from this chart..

• CitiFX Pro, ILQ and Advanced Markets aren’t considered in the accounts and profitability calculations as their account sizes are big
• Weighted average calculates the relative change in profitability to reduce impact of smaller brokers

We now have enough data to show a chart of profitability over time (for the 10 brokers and excluding Citi, ILQ, IB and AM):

Links to previous reports start here.