US Forex brokers profitability report for Q2 2011

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 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 during the quarter. Yes, retail 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 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.

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.

Grab your latest copy of the Forex Magnates Retail Forex Industry Report for Q1 2011.