Risk disclosure

Nothing here is advice

The Measured Trader is a publication. It is not a broker, an investment firm, an adviser or a trading service, and it is not authorised or regulated by any financial authority. Nothing on this site is investment advice, a personal recommendation, an inducement, or an offer to buy or sell anything.

No article here tells you what to trade, when to trade it, or in what size. Where a figure appears in a worked example, it is invented for the purpose of showing an arithmetic structure and is labelled hypothetical in the text. Those numbers are not suggestions and should not be copied.

What the regulators have measured

Three European supervisors have published their own measurements of how retail clients actually do in leveraged products. Each figure below is cited and sourced in the articles linked beside it, so you can read the original document rather than this summary.

• The European Securities and Markets Authority stated that national regulators' analysis of contract-for-difference trading across EU jurisdictions showed 74–89% of retail investor accounts typically lose money, with average losses per client ranging from €1,600 to €29,000.
• The Financial Conduct Authority's analysis of a random sample of client accounts from eight firms found 82% of clients lose money, with an average result per account of a £2,200 loss.
• The Autorité des marchés financiers studied 14,799 active retail forex and contract-for-difference investors and reported that 90% of clients lost money between 2009 and 2012, with losses deepening the longer clients persisted.

What those numbers are, what population each describes and where each one stops being true is the subject of our investigation into the figures this industry repeats.

What this means in practice

• Leverage multiplies losses as well as gains. A small adverse move can cost a large share of the money committed.
• Costs are charged per trade, not per year. In the largest study of this we have read, roughly two-thirds of individual investors' losses were transaction costs rather than being wrong about direction — see what trading often actually costs.
• Past results do not predict future ones. This applies to markets, to strategies and to your own recent run.
• Only money you can lose entirely. Every figure in the regulatory studies above was a real person's deposit.
• Protections are floors, not plans. Margin close-out and negative balance protection limit how far an account can fall; they are not a view on whether a position was sensible.

What this publication is for

Understanding what has actually been measured about trader behaviour, and being able to tell a sourced claim from an unsourced one. It is not a route to profitability, and no article here claims to be. How we decide what may be published is set out in the editorial policy.

If you are considering trading and are unsure, consider taking advice from someone authorised to give it in your jurisdiction. We cannot give personal financial advice and do not respond to requests for it.