All brokers (except Tradestation) have updated their profitability numbers for the second quarter 2011. What clearly stands out is the drop in profitability experienced by clients of all brokers (with the exception of Advanced Markets – but its numbers are insignificant). On average clients’ profitability dropped 4% since last quarter. When talking to brokers most of them stated the same reason for this – increased volatility during the quarter. Yes, retail forex traders don’t cope well when markets are volatile. This of course also has much to do with the usage of leverage as leverage+volatility=almost certain loss.
What’s interesting next is the steep drop in number of accounts of both Interbank FX and FXCM. Both lost over 1,600 accounts while OANDA gained over 1,000. Other gainers were Alpari, GFT and MB. Most other changes were insignificant. It’s interesting to note that Gain Capital was able to almost fully offset the accounts lost to Tradestation through growth and acquisition of dbFX’s clients base.
Without Tradestation numbers the overall number of US retail forex traders dropped by 1,658 but it’ll be on the plus side once these numbers become available.
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The number one ‘profitable’ broker (thanks to GFT’s whooping 10% profitability drop) despite its own 7% drop is OANDA.
Q1 2011 US retail forex brokers report can be seen here.
Q4 2010 US retail forex brokers report can be seen here.
Q3 2010 US retail forex brokers report can be seen here.