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FXCM's Profitability Report!!!

  • #1
  • First Post: Oct 17, 2010 7:16am Oct 17, 2010 7:16am
Source: Michael Greenberg (FXMagnet)


Just got these numbers below from FXCM’s new risk disclosure (not released officially yet). If the numbers are correct this is quite a big surprise for two reasons:
1. FXCM always claims to be NDD and is proud of its agency model, however its traders are less profitable than IBFX’s.
2. FXCM only shows about 15,000 accounts in Q3 which is 1/10 of what it typically reports. I always was sure that FXCM has a very significant presence in the US but apparently it’s only 10% of its customers base. I wonder then who is the biggest broker in the US? Perhaps it’s OANDA or Gain, we’ll see this Monday.

What’s even more alarming is the that the number of accounts is actually decreasing. I assume that some of them moved overseas due to last year CFTC’s anti-hedging rules, but perhaps some of them were wiped out.
This coming Monday all US brokers will have to disclose this data to new customers so we will be able to better compare accounts profitability and see whether all brokers used same methodology to calculate these numbers.


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15,000 account only?!!!
  • #2
  • Oct 17, 2010 6:33pm Oct 17, 2010 6:33pm
Last year Oanda was reported as the biggest retail broker in the world. Almost double the monthly volume of FXCM.

It is no surprise that they are shrinking. No good thing lasts forever if you know what I mean.

Also, you may want to be careful with various sources. Sometimes competition owns the source.
  • #3
  • Oct 18, 2010 6:38am Oct 18, 2010 6:38am
many brokers issued it's report and here is the comparison

look at Oanda 50% profitable accounts (about 45,000)


Attached Image (click to enlarge)
Click to Enlarge Name: quarterly.jpg Size: 89 KB



source: FX Magnet
  • #4
  • Oct 18, 2010 7:07am Oct 18, 2010 7:07am
The Oanda numbers dont make sense. I have nothing against them (i even have an account there), but i dont believe the average Oanda customer is 2x better than the avg customer of the others. A case of creative counting?

Cant find the report on the Oanda site too.
  • #5
  • Oct 18, 2010 7:31am Oct 18, 2010 7:31am
So many ways to read data, so I'll comment first at "data".

Oanda has a LOT more clients listed than other brokers. Is it easier to make 50% when you have 50,000 or when you only have 2000 people?
What type of people are these? Does one broker attract people who have a clue and does another attract people who don't? What are any possible outside correlations?
Are the brokers with a higher success rate ones with micro accounts or not?

Why are there no quantifiers in what data gets used at all? What is the success rate of SERIOUS traders versus someone who flipped around for a week with 200 dollars? What is the success rate of people with previous trading experience versus those who just started? I'm sure most of those failed accounts are also mostly inactive accounts. One would have to wonder if the size of the account was an issue, therefore making leverage reductions a big FAIL(or success if you believe how it was really intended, to shut people out). What is the percentage of the total accounts that are ACTIVE traders? Do brokers clear out inactive accounts or shut them down at some point? Does Oanda close/deactivate accounts quicker than other brokers? If you are gone in 90 days and other brokers want business so they keep your open forever, that makes a big difference. Yet if this were true, then Oanda would have a real LOT of accounts, so that would be odd.

90% of restaurants fail. 66% of college students if you go by the look to your left and look to your right speech at orientation. The numbers aren't good anywhere, so considering the success rate in the real world, those numbers look ***really good***.

but I'm tired of mandated numbers that show me no information at all but is only there to elicit a dictatorial response of fear and panic. It's like reading a newspaper, every story is like reading an inside joke now. Nothing is specific, there's one last week where the article didn't even say what it was about or the point! I imagine it had something to do with zombies possibly, since I know the template they used, but they didn't fill in the why of the story anywhere.
  • #6
  • Edited 8:02am Oct 18, 2010 7:49am | Edited 8:02am
Quoting shrike
The Oanda numbers dont make sense. I have nothing against them (i even have an account there), but i dont believe the average Oanda customer is 2x better than the avg customer of the others. A case of creative counting?

Cant find the report on the Oanda site too.
Have you read the stupid non-sense on this forum with regards to Oanda?

It makes perfect sense that all the losers with their conspiracy theories trade elsewhere.
  • #7
  • Oct 18, 2010 7:50am Oct 18, 2010 7:50am
Quoting techno79
So many ways to read data, so I'll comment first at "data".

Oanda has a LOT more clients listed than other brokers. Is it easier to make 50% when you have 50,000 or when you only have 2000 people?
So you're saying the 95% failure rate in trading is a myth?
  • #8
  • Oct 18, 2010 8:05am Oct 18, 2010 8:05am
Quoting bugscoe
Have you listened to the stupid non-sense on this forum with regards to Oanda?

It makes perfect sense that all the losers with their conspiracy theories trade elsewhere.
Nop, i didint listen to this nonsense. I just think it would make sense that Oanda should be closer to the rest. Possible explanation: Oanda is - afaik - the only one on that list that pays interest on account balance, which makes inactive accounts profitable through interest revenue alone, wheres at the competition inactive accounts are breakeven (and thus - according to cftc regs - counting as unprofitable).

On the other hand, a profit is a profit, and be it only interest, which makes at least inactive oanda customers smarter than the rest.

Does any firm on that list other than oanda pay interest?
  • #9
  • Oct 18, 2010 8:17am Oct 18, 2010 8:17am
Quoting shrike
Nop, i didint listen to this nonsense. I just think it would make sense that Oanda should be closer to the rest. Possible explanation: Oanda is - afaik - the only one on that list that pays interest on account balance, which makes inactive accounts profitable through interest revenue alone, wheres at the competition inactive accounts are breakeven (and thus - according to cftc regs - counting as unprofitable).

On the other hand, a profit is a profit, and be it only interest, which makes at least inactive oanda customers smarter than the rest.

Does...
IBFX didnt include inactive accounts :

http://www.ibfx.com/Corporate/post/2...Explained.aspx
  • #10
  • Oct 18, 2010 8:18am Oct 18, 2010 8:18am
Quoting bugscoe
So you're saying the 95% failure rate in trading is a myth?
ofcourse
  • #11
  • Oct 18, 2010 8:28am Oct 18, 2010 8:28am
Quoting tar
IBFX didnt include inactive accounts :

http://www.ibfx.com/Corporate/post/2...Explained.aspx

Alright. I think they should include them tho, if you read the wording from this (last paragraph):

http://www.cftc.gov/ucm/groups/publi...efactsheet.pdf

Seems they are omitting break-even accounts completely.
  • #12
  • Oct 18, 2010 8:30am Oct 18, 2010 8:30am
Quoting shrike
Nop, i didint listen to this nonsense. I just think it would make sense that Oanda should be closer to the rest. Possible explanation: Oanda is - afaik - the only one on that list that pays interest on account balance, which makes inactive accounts profitable through interest revenue alone, wheres at the competition inactive accounts are breakeven (and thus - according to cftc regs - counting as unprofitable).

On the other hand, a profit is a profit, and be it only interest, which makes at least inactive oanda customers smarter than the rest.

Does...
Unlikely. Interest is to damn low. You'd have to assume some 25-30% of accounts are inactive with no prior losses at Oanda.

My account collects approx $0.18 cents a day in interest. One loss is all it takes.
  • #13
  • Oct 18, 2010 8:32am Oct 18, 2010 8:32am
Quoting shrike
Alright. I think they should include them tho, if you read the wording from this (last paragraph):

http://www.cftc.gov/ucm/groups/publi...efactsheet.pdf

Seems they are omitting break-even accounts completely.
"Break even" not "inactive accounts" ....
  • #14
  • Oct 18, 2010 8:38am Oct 18, 2010 8:38am
Quoting tar
"Break even" not "inactive accounts" ....
Which would be the same for firms that dont pay interest. There is nothing in the cftc docs that says you can just leave out inactive accounts.
  • #15
  • Oct 18, 2010 8:41am Oct 18, 2010 8:41am
Quoting shrike
Which would be the same for firms that dont pay interest. There is nothing in the cftc docs that says you can just leave out inactive accounts.
Also it didnt say u should include them ...
  • #16
  • Oct 18, 2010 9:25am Oct 18, 2010 9:25am
Quoting shrike
The Oanda numbers dont make sense. I have nothing against them (i even have an account there), but i dont believe the average Oanda customer is 2x better than the avg customer of the others. A case of creative counting?

Cant find the report on the Oanda site too.
H ha ha ha think about the amount of leverage that's available with Oanda mate.....
  • #17
  • Edited 10:27am Oct 18, 2010 9:28am | Edited 10:27am
Most likely it's interest on the dormant accounts at Oanda.
  • #18
  • Oct 18, 2010 9:41am Oct 18, 2010 9:41am
Quoting >Apocalypto<
H ha ha ha think about the amount of leverage that's available with Oanda mate.....
Less maximum leverage, larger accounts on average?
Less script kids with parents money but more experienced traders with better or more advanced trading techniques there?
  • #19
  • Oct 18, 2010 9:51am Oct 18, 2010 9:51am
Quoting benssol
many brokers issued it's report and here is the comparison

look at Oanda 50% profitable accounts (about 45,000)


Attachment


source: FX Magnet
Simple answer for the higher number of profitable accounts at Oanda : HONESTY , no stop running and other typical bucketshop games.
  • #20
  • Oct 18, 2010 9:54am Oct 18, 2010 9:54am
So does that mean MB Trading is dishonest, since they only have about 25% ?
Im with TraderKGB on this one.
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