Exclusive: Q4 2015 US Retail Forex Profitability Report Shows Improved Trading

Photo: Bloomberg

US retail forex traders were more profitable at the end of 2015. During the final quarter, 37.4% of traders were profitable on a Weighted Average basis compared to 34.9% in Q3 2015. Non-weighted calculations showed average broker profitability of 35% which was a 3.6% improvement from the poor 31.4% figure in Q3.

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While profitability rose, it did little to entice new traders, as total US retail forex traders was at 89.478 active accounts during Q4 2015. The figure was hampered by the exit of MB Trading which had been acquired by TradeKing in August. The figure was a multi-year low in active accounts, with forex traders in the US contracting in 2015 compared to growth in the rest of the world.

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During Q4, TradeKing withdrew its Forex Dealer license that it acquired with MB Trading, deciding to operate its forex business on an introducing broker basis and work with GAIN Capital. Adding to the exit of TradeKing/MB Trading was the decline of active US retail forex accounts at OANDA and FXCM of 5.4% and 8.7% respectively.

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In terms of individual performers, Interactive Brokers once again led all brokers with total active accounts at 32,956, and was the most profitable with 45% of traders achieving profits. Also, OANDA customers recorded a bounce back. After reporting profitability of 31.4% of accounts in Q3 2015 which had been a multi-year low, 37.3% of customers were in the black for Q4.

Finance Magnates Q4 2015 US Retail Forex Profitability and Active Accounts Report

Overall, the profitability increase occurred during a mixed environment for the currency markets. The quarter ended with volatility in December following the FOMC Meeting in the first week of that month. However, activity had been low for October and November.

Previous profitability reports have shown that retail traders have been more successful during low volatility periods. The rationale on improved success is based on a large percentage of retail clients using strategies that focus on buying weak currencies with a goal of rebounds. In slower moving markets, temporary support and resistance levels tend to be stronger which bodes well for price rebounds.

Previous Reports: Q3 2015, Q2 2015, Q1, 2015, Q4 2014, Q3 2014, Q2 2014, Q1 2014, Q4 2013, Q3 2013, Q2 2013, Q1 2013, Q4 2012, Q3 2012, Q2 2012, Q1 2012