When I try open my IB account today, there is large disclosure pop up. Among the iinformation is the following : There's a long pop up on my IB account today when I try to open it, among the information is the following : PERFORMANCE OF INTERACTIVE BROKERS RETAIL CUSTOMER FOREX ACCOUNTS FOR PAST FOUR CALENDAR QUARTERS: The table below sets forth the percentage of non-discretionary retail forex customer accounts maintained by Interactive Brokers LLC that were profitable and unprofitable for the past four calendar quarters. The accounts were identified and these statistics were calculated according to the definitions and interpretations set forth by the CFTC and NFA1. TIME PERIOD NUMBER OF ACCOUNTS PERCENTAGE OF PROFITABLE ACCOUNTS PERCENTAGE OF UNPROFITABLE ACCOUNTS Q4 2011 45053 51.0% 49.0% Q3 2011 45058 51.2% 48.8% Q2 2011 41651 38.8% 61.2% Q1 2011 40370 40.4% 59.6% PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. It looks much better than 5% winners, yet why are they considering only non discretionary forex customers (does that mean only automated ones ? )
At least I have not told IB whether I am automated or discretionary so either they have guessed or I am not included.
IIRC discretionary in this means only individual private traders, no managed accounts or friends&family accounts and so on.
Thanks Pippi, this would make more sense. The results don't look as scary as 90% lose, btw I requested the performance over the last 5 years which are apparrently also available.
Here's what I received (imo it doesn't look nearly as bad as "95 % lose, they just lose " , any comments ? TIME PERIOD NUMBER OF ACCOUNTS PERCENTAGE OF PROFITABLE ACCOUNTS PERCENTAGE OF UNPROFITABLE ACCOUNTS Q4 2011 45,053 51.0% 49.0% Q3 2011 45,058 51.2% 48.8% Q2 2011 41,651 38.8% 61.2% Q1 2011 40,370 40.4% 59.6% Q4 2010 46,643 50.4% 49.6% Q3 2010 44,955 40.2% 59.8% Q2 2010 43,968 52.4% 47.6% Q1 2010 40,474 50.9% 49.1% Q4 2009 37,698 48.4% 51.6% Q3 2009 35,786 42.9% 57.1% Q2 2009 34,656 44.5% 55.5% Q1 2009 33,348 53.7% 46.3% Q4 2008 31,962 52.6% 47.4% Q3 2008 29,127 55.7% 44.3% Q2 2008 26,451 51.2% 48.8% Q1 2008 26,072 46.2% 53.8% Q4 2007 26,629 47.1% 52.9% Q3 2007 24,401 46.6% 53.4% Q2 2007 20,415 47.3% 52.7% Q1 2007 17,204 47.7% 52.3%
These are very high profitability figures for forex. However, IB has apparently not released it's method of calculation. More discussion here: http://forexmagnates.com/interactiv...-largest-and-most-profitable-broker/#comments CFTC guidance on how brokers should calculate forex customer profitability: http://www.nfa.futures.org/news/newsNotice.asp?ArticleID=3746
My guess is IB's customer profile is radically different than your typical forex retail customer profile. Average account size at IB is ~ $120k (per their annual report) and their whole approach to handling forex transactions is different than the bucket shops many use. Spreads, as well, are lower than many bank platforms that allow forex trading. So whether or not their figures have been impacted by their calculation methodology, I'm not surprised that they look better than 95% lose.
Yeah. It looks like the broker with the largest percentage of forex customer losses is TradeStation where 72% lose. http://forexmagnates.com/forex-brok...mber-accounts-increase-traders-profitability/