What is the percentage of profitable traders?


#1

Authentic data from EU based forex brokers about % of winning traders with them. This data is required to be submitted by brokers as part of new EU regulations (European Securities and Markets Authority (ESMA).

The data does not look all that bad. 25% success rate looks in line with many other trades/business. CAN ZERODHA TELL US WHAT % traders stay profitable with them @nithin

Also look at the difference between European regulation and Indian style babudom. Europe want to educate investors/traders about risks. Here babudom wants to strangulate traders.


What is the approximate success percentage of people in stock market?
#2

I think we should be able to share this. Will speak to our team. @siva can you add it on your list of things to do.

This 25% and over number seems ridiculously high though. Reading the original article, don’t see how is this calculated (is it per day/month/year, amount of profits/losses etc). Let me know if you find that detail.

Btw CFD markets don’t have any overhanging issues like us, no taxes on a trade (apart from brokerage commissions) and almost unlimited amounts of liquidity (no impact cost).

As Zerodha we collect and pay more than Rs 3.5 crores as STT, Exchange charges, GST, Stamp, etc daily. That means in a year over Rs 700 crores. Liquidity in contracts outside Nifty and Bank nifty is really less. We had done an experiment where we figured that conservatively traders lose almost as much in impact cost additionally to the taxes. So over Rs 1500 crores, just from clients at Zerodha. Unless the other charges come down, impact cost is going to keep increasing over time, assuming product suitability framework does come up sometime reducing retail volumes.

So net off charges, the number of profitable vs losing traders in a yearly period, I think in India will be not more than 1 to 2%.


What is the approximate success percentage of people in stock market?
#3

haha so maximum number of traders just provide liquidity to investors.


#4

And what about 3 to 5 years period ?


#5

@nithin 1-2% OMG. Shocking!!. I dont know if this is due to impact cost as you mentioned.

But this is not the first time I have come across this 25-30% figure. Please see the citi bank research done sometime back which available on European Central Bank website.

Again this reports speaks about 30% trader being profitable. Also note higher profitability for IB and Citi where the minimum deposit is higher. This also shows the brokerages with more experienced/serious traders do well.

One thing is for sure, I always felt I am better with Currencies than with stocks or Nifty, Bank Nifty.

I am not sure if many other traders felt this way.


#6

Dear @nithin Can you please throw some light… What is the %age of retail traders in India who trades only in FNO with just few lacs rupees (active retail derivative traders). May be from 2 lac rupees to 40 lac rupees of trading capital.


#7

We will soon put out a detailed report on this.


#8

Thank you so much for the reply @nithin


#9

If the percentage of successful forex tradrers is 25%, then it is a very good ratio. Forex trading is one of the most complicated place to invest in. If one out of four trader sees success in it, then they should be very grateful. I hope that this percentage will rise in the upcoming time.


#10

@nithin @siva would like to see the report


#11

@nithin


#12

This is very useful info to estimate the hidden impact costs. Thanks Nithin!


#13

I have lost more money to theta decay in options trading rather than a position going against me…


#14

This statistics is not going to help in anyways ,boldly we can say 1of 2 percent and focus on investing


#15

True currency is quite easy and accurate to predict and catch the direction


#17

I am still looking and looking and looking at that. If all that is true it’s really motivational. Especially liked to see stats from eToro cause will use them a lot, just created the acount cause heard many real positive reviews and now I see it’s really true. It means market is still there as well as money to be made.


#18

yes as commonly known …99% traders lose money but still keep trading ! ofcourse that may be one of the reason why zerodha is no 1 :smiley: