Retail loss percentages: what do they actually mean?

FTC Community TeamStaff17 Sept 202614 views

European and UK brokers publish the percentage of their retail clients who lose money — often 65% to 85%. It's the most honest warning in the industry, and most beginners never look at it.

Retail loss percentages: what do they actually mean? — risk-reward diagram — A risk-reward ratio of 1 to 2

whether you checked your broker's loss percentage before opening an account
what you think drives the number
what it would take for you to end up in the winning minority

Retail loss percentages: what do they actually mean? — candlestick anatomy diagram — The parts of a candlestick: wick, body, open and close

The retail loss percentage guide explains how the figure is calculated.

Background: What the “% of retail accounts lose money” warning actually means

Regulated CFD brokers must publish the share of their retail clients who lose money. How the figure is calculated, what it tells you and what it doesn't.

Why do most retail CFD traders lose money?

CFDs are leveraged, so small price moves cause large gains or losses relative to the deposit, and trading costs add up. Regulators require brokers to publish the share of their retail accounts that lose money for this reason.

Is a broker with a lower loss percentage better?

Not necessarily. The figure depends on the broker's mix of clients and products. It is a reminder of risk, not a measure of the broker's quality or of your own likely result.

Read the full guide

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