ForgeXWhat the research says
What percentage of traders lose money
Europe's regulator made brokers hand over their numbers. Between 74 and 89 percent of retail accounts lost money, and the average loss ran into thousands.
You have probably seen the figure that ninety percent of traders lose money. It gets repeated everywhere and almost nobody says where it came from. There is a real number, though, and it comes from the people who can compel brokers to hand over their records.
The number regulators found
In 2018 the European Securities and Markets Authority looked at what national regulators had found when they examined contract for difference trading across the European Union. Their conclusion was that "74-89% of retail accounts typically lose money on their investments", with "average losses per client ranging from €1,600 to €29,000" [1].
That is not a survey and it is not an estimate from a course seller. It is what came out of the brokers' own account records.
What the same rules changed for retail clients
The figure sits inside a wider set of measures the regulator brought in for retail clients trading CFDs. Leverage was capped. Every broker was required to show a standardised risk warning, the line about the percentage of accounts that lose money, on its own marketing. And negative balance protection was made mandatory, so a retail account cannot be pushed below zero and leave the client owing the broker after a violent move.
None of that changes the base rate, but it is worth knowing when you read the number. The investor protection rules exist precisely because the outcomes were this lopsided. The percentage is the reason the risk warning is there, not a separate fact.
Why the range is so wide
Seventy four to eighty nine percent is a big spread. It varies by country, by broker and by what is being traded. Higher leverage pushes the number up. So does trading products with a wider spread.
The honest way to read it is not as a precise figure but as a floor. Whichever end of that range you look at, most people lose.
What it does not tell you
It does not tell you the losses were unavoidable, and it does not tell you the winners were lucky. It is a snapshot of outcomes, not an explanation of them.
It also covers contract for difference accounts specifically, which are leveraged products. That is a harder game than buying shares outright, and the numbers reflect that.
What it is genuinely useful for is calibration. If you are deciding whether to fund an account, the base rate is that most people in your position lost money. Anything you plan to do differently has to be something you can actually name.
Sources
- European Securities and Markets Authority, "ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors", 27 March 2018. https://www.esma.europa.eu/press-news/esma-news/esma-agrees-prohibit-binary-options-and-restrict-cfds-protect-retail-investors