Analysis: 75% of Retail Investors Are Essentially 'Capital Donors'

<p>Investing
is a zero-sum game, where one person's win is another's loss. The majority of
retail investors lose money, a fact underscored by risk warnings on nearly
every regulated broker's website. But how many clients are actually profitable,
and which investment firms have the highest percentage of such traders? Finance
Magnates Intelligence set out to find out, and the results are detailed in
this article.</p><p>TeleTrade and Saxo Bank
Clients Show Highest Profitability</p><p>Finance
Magnates publishes
a quarterly list of the largest retail CFD brokers by volume (<a href="https://www.financemagnates.com/intelligence/products/" target="_blank" rel="follow">subscribe to the
Quarterly Industry Report for full access</a>). Based on this list, we selected 20
of the largest retail brokers who publish their clients' profit-loss ratios and
update them monthly. </p><p>From the
gathered data, only one in four investors made a profit (or did not lose)
during August. Nearly 75% incurred losses, indicating that the number of
profitable traders is relatively small, and most investors remain 'capital
donors.'</p><p>The ranking
shows that clients of brokers TeleTrade and Saxo Bank achieved the highest
profitability at 35%. Hantec Markets came in third with profitability of
29.38%, closely followed by Tickmill and OANDA at 29%.</p><p>The data
also suggests that for the vast majority of surveyed brokers, profitability
remained above 25%. For eight firms, however, it was lower. XM Markets had a
profitability of 24.67%, and XTB had 23%. Only three brokers fell below 20% in
the last month: Axi at 17.3%, Plus500 at 18%, and Pepperstone at 18.8%.</p><p>According
to <a href="https://www.financemagnates.com/forex/time-and-diversification-boost-retail-traders-profits-by-60-reveals-capitalcom-study/" target="_blank" rel="follow">a recent study by Capital.com</a>, individual traders looking to boost their
profitability should focus on diversifying their investments and timing them
properly. Most investors concentrate on just a few asset classes, but
diversification across five different significantly increases average
profitability.</p><p>Methodology and Future
Publications</p><p>As
mentioned earlier, <a href="https://www.financemagnates.com/" target="_blank" rel="follow">Finance Magnates Intelligence</a> chose the 20 largest
brokers by volume who publish monthly information on the percentage of
profitability and losses. The list was then sorted by brokers where the highest
percentage of clients were profitable. </p><p>This is the
first publication of this kind of report. In the future edition, we will also compare
dynamics changes between individual months, quarters, and years. The list of
analyzed brokers may also change over time due to fluctuating monthly volumes
among different brokers.</p><p>You can also check <a href="https://www.financemagnates.com/cryptocurrency/bitcoins-summer-slump-why-august-was-a-nightmare-for-crypto-exchanges/" target="_blank" rel="follow">our recent report</a> describing the change in monthly spot volumes of the most popular centrlized crypto exchanges.</p>

This article was written by Damian Chmiel at www.financemagnates.com.