Good morning everyone,

The day before yesterday post from Michael Greenberg at Forex Magnates has not passed unnoticed in the retail Forex industry in the US. As you may recall, the profitability numbers (overall) displayed by Michael were quiet poor along most of the brokers of the industry.

US Forex brokers account profitability comparison

Yesterday I had the opportunity to have a nice chat with FXCM and they explained me some interesting information I would like to share here with you.

In speaking with FXCM, using their own words "profitability numbers pertained to just LLC client base including micro accounts which are very small account sizes to begin with and meant for traders to essentially practice their strategies in live trading before upgrading to larger accounts. This would definitely be a reason for lower profitability numbers".

Also, they wanted to show me that the numbers were quite different if we break it down by account size.

Below are the profitability numbers they sent me based on account size. Please, bear in mind that these numbers correspond to the monthly average of the past 12 months:

Equity Range

% Profitable

$0 - $999

27.89%

$1,000 - $4,999

40.52%

$5,000 - $9,999

42.36%

$10,000+

47.74

You'll see that the higher account balance the more profitable the account. It seems that traders with a higher account balance better understand the need for proper money management and thus tend to not over leverage their forex accounts, while those with low equity accounts seem to be burning some dollars if you allow me to use such an expression.

Once again, EDUCATION is the key to profitability not that specific broker you operate through or the guy next door… EDUCATION!

Thanks

Francesc

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