Exclusive: Q2 2013 US Forex Profitability Report – 35% of Retail Clients Gain

Second quarter 2013 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 profitability and account figures are out. During the quarter, brokers reported that 35% of US retail forex traders made money, with 65% experiencing losses. The 35% figure was slightly below Q1 data, as weighted averages were lower by 0.3%. Also reported was an increase of 1,336 total active retail accounts in the US to 100,543, the second straight quarter of overall customer growth.

While the overall results showed only slight changes, in individual names there was greater variance, as brokers reported between 28% to 46.5% profitability rates (see below). Once again, InteractiveBrokers reported the most profitable traders, with clients profitability rising 3.2% to 46.5% during the second quarter. On the other end of the spectrum, at 28%, FXCM had the least profitable traders, despite reporting record trading activity during the quarter. Also notable was the advancement of MB Trading, which was last quarter had the most unprofitable clients at 26.9%, but improved 5.1% to 32% in the second quarter. Overall, figures were mixed as 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 swings appeared to be both a blessing and curse to traders.

In regards to total accounts, the 1.3% increase in US customers was mainly the result of InteractiveBrokers reporting a rise of 2474 accounts. The 12.6% growth to 22,140 total forex customers nearly put InteractiveBrokers as the top US forex broker, only slightly below FXCM’s 22,196 figure. The gains from Interactive contrasted to notable US contraction taking place at GAIN Capital, FXDD, OANDA, and IBFX/Tradestation.

Among surprises, ILQ increased its account base 40.3% to 1432. The performance was eluded to earlier this week when we reported that the firm looks poised to enter the futures market with an equity stake acquisition of Velocity Futures.

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