As ESMA forces brokers to display the percentage of their winning clients, the competition heats up
Transparency has been a key issue for foreign exchange and CFDs brokers in recent years. When it comes to EU-regulated brokers, the beginning of August was supposed to be the start of a new era. European brokers were forced to make some dramatic changes to their offerings, and some key aspects of the broker-client relationship are now out in the open.
While some traders are scratching their heads and contemplating how to get higher Leverage, firms now have to disclose what percentage of their clients are losing money. In an extensive effort, the Finance Magnates Intelligence department has collected a set of data which provides valuable insight into the dealings of several brokerage companies.
Every EU-regulated broker is now visibly displaying figures which the ESMA considers valuable to retail investors. The primary goal of this new regulation was to put a halt on misleading advertising, but the supranational regulator’s decision to put a spotlight on client losses also provides traders and brokers themselves with precious information.
Not only can brokers compete to attract the most-successful traders, they can also smartly use their percentage of winning clients as a reputational edge.
Win-Loss Ratios
The Finance Magnates Intelligence Department included a total of 30 brokers in its sample. While the charts are certainly comprehensive, we must stress that these figures are in no way representative of the quality of the service of the mentioned brokers.
Trading is a zero sum game and as such, there will always be more losers than winners. The goal of the new regulation is to better inform retail investors that the winners are in the minority. The days when regulated brokers were able to advertise aggressively are long gone.
I remember the years when a crystal ball banner with a message “guess where the EUR/USD is going” would appear. An enticing message that you can make money by trading Forex was designed to appeal to the most primal instincts of competitive humans. After all, competition is in our very nature and making money by beating our peers in a game is one of the most satisfying feelings one can experience.
With this long disclaimer, let’s move on to the data. Below you will find a complete list of the biggest brokerages. They are sorted by the number of most winning clients, which are represented as a percentage of the total clients of the brokerage.
Social Trading Actually Works
If there has been any doubt that social trading or copy trading works, the data provided by brokerage companies shows that there are some merits to it. Two of the top 5 brokers which are home to the largest number of winning clients offer a social or copy trading product.
A whopping 35 percent of clients of eToro have made money. Darwinex is the other firm on this list that offers clients to follow trade leaders. This has proven to be good for its customers, with 31 percent them being in the black.
Other brokers in the top 5 are also notable: AETOS, GBE Brokers, and XM Markets. Looking at the biggest brokerages, Saxo Bank comes close to the 30 percentile with about 29 percent of its clients making money.
The Red Line is Above 80%
We certainly don’t want to single out any brokers for not having enough profitable clients. What we can say is that 70 to 80 percent losing clients appears to be the norm. There is little brokerage companies can do to stop their clients from losing money. What they can do is make sure that their clients have the necessary tools to make informed decisions.
The chart below shows that the profile of brokerages which house mostly losing clients is rather broad. Only Vestle (formerly iFOREX), HYCM, and EasyMarkets have an unusually high percentage of customers which are in the red.
Competing for Smarter Clients
If any trend emerges from this data forced upon us by the ESMA, it is that brokers should race to build up a client base which is better informed. The number of additional tools and tools that actually work and provide insight will be crucial. What will be even more crucial is education: brokers with the least educated clients will always house more losing clients. If they want to use their win/loss ratio as a clever marketing tool, they should commit more resources to that.
With the new leverage rules in force in tandem with the win/loss percentage disclosure, brokers who are in this business for the long haul should focus on bringing in clients that stay with them for long. The days of churn and burn are behind us, and so are the days of reckless advertising. It is time to adapt and focus on a tactic that will bring long-term benefits to clients and brokers alike.
Transparency has been a key issue for foreign exchange and CFDs brokers in recent years. When it comes to EU-regulated brokers, the beginning of August was supposed to be the start of a new era. European brokers were forced to make some dramatic changes to their offerings, and some key aspects of the broker-client relationship are now out in the open.
While some traders are scratching their heads and contemplating how to get higher Leverage, firms now have to disclose what percentage of their clients are losing money. In an extensive effort, the Finance Magnates Intelligence department has collected a set of data which provides valuable insight into the dealings of several brokerage companies.
Every EU-regulated broker is now visibly displaying figures which the ESMA considers valuable to retail investors. The primary goal of this new regulation was to put a halt on misleading advertising, but the supranational regulator’s decision to put a spotlight on client losses also provides traders and brokers themselves with precious information.
Not only can brokers compete to attract the most-successful traders, they can also smartly use their percentage of winning clients as a reputational edge.
Win-Loss Ratios
The Finance Magnates Intelligence Department included a total of 30 brokers in its sample. While the charts are certainly comprehensive, we must stress that these figures are in no way representative of the quality of the service of the mentioned brokers.
Trading is a zero sum game and as such, there will always be more losers than winners. The goal of the new regulation is to better inform retail investors that the winners are in the minority. The days when regulated brokers were able to advertise aggressively are long gone.
I remember the years when a crystal ball banner with a message “guess where the EUR/USD is going” would appear. An enticing message that you can make money by trading Forex was designed to appeal to the most primal instincts of competitive humans. After all, competition is in our very nature and making money by beating our peers in a game is one of the most satisfying feelings one can experience.
With this long disclaimer, let’s move on to the data. Below you will find a complete list of the biggest brokerages. They are sorted by the number of most winning clients, which are represented as a percentage of the total clients of the brokerage.
Social Trading Actually Works
If there has been any doubt that social trading or copy trading works, the data provided by brokerage companies shows that there are some merits to it. Two of the top 5 brokers which are home to the largest number of winning clients offer a social or copy trading product.
A whopping 35 percent of clients of eToro have made money. Darwinex is the other firm on this list that offers clients to follow trade leaders. This has proven to be good for its customers, with 31 percent them being in the black.
Other brokers in the top 5 are also notable: AETOS, GBE Brokers, and XM Markets. Looking at the biggest brokerages, Saxo Bank comes close to the 30 percentile with about 29 percent of its clients making money.
The Red Line is Above 80%
We certainly don’t want to single out any brokers for not having enough profitable clients. What we can say is that 70 to 80 percent losing clients appears to be the norm. There is little brokerage companies can do to stop their clients from losing money. What they can do is make sure that their clients have the necessary tools to make informed decisions.
The chart below shows that the profile of brokerages which house mostly losing clients is rather broad. Only Vestle (formerly iFOREX), HYCM, and EasyMarkets have an unusually high percentage of customers which are in the red.
Competing for Smarter Clients
If any trend emerges from this data forced upon us by the ESMA, it is that brokers should race to build up a client base which is better informed. The number of additional tools and tools that actually work and provide insight will be crucial. What will be even more crucial is education: brokers with the least educated clients will always house more losing clients. If they want to use their win/loss ratio as a clever marketing tool, they should commit more resources to that.
With the new leverage rules in force in tandem with the win/loss percentage disclosure, brokers who are in this business for the long haul should focus on bringing in clients that stay with them for long. The days of churn and burn are behind us, and so are the days of reckless advertising. It is time to adapt and focus on a tactic that will bring long-term benefits to clients and brokers alike.
Interactive Brokers Settles Nasdaq Charges, Agrees to $475,000 Fine
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/company/financemagnates/
👍 Facebook: https://www.facebook.com/financemagnates/
📸 Instagram: https://www.instagram.com/financemagnates_official
🐦 X (Twitter): https://twitter.com/financemagnates/
📡 RSS Feed: https://www.financemagnates.com/feed/
▶️ Telegram: https://t.me/financemagnatesnews
Don't miss out on our latest videos, interviews, and event coverage.
🔔 Subscribe to our YouTube channel for more!🔔