Poll: Average Forex account size.

[DepthTrade]

Hello everyone, I was curious and assume others are of what the average account size that people trade here on EliteTrader. I have done some google research and found the average account size to be about $8,000. Do not add past blown accounts together, this is for current accounts being traded. This poll will not be public, so we won't know who voted for what amount, even myself. If you have multiple accounts, just aggregate them as if they were one account.
Thanks for your time and have a great day.

 

[DepthTrade]

Just found this on the web.

A. There are about 150,000 forex accounts in the US (US forex brokers profitability report Q4 2010)
B. US Forex Brokers hold $685 million in client funds (Feb 2011 regulatory capital report)

Now we devide $685 million by 150,000 to to see that the average US retail forex account size is $4570.

 

[Robert Morse]

I went to the NY Trader Expo in 2012 for the first time. There were many FOREX brokers and some were big sponsors with large exhibits. The firm I worked for was looking for information to decide if we wanted to get into that business. Two FOREX companies provided us the same metrics. 90% of accounts are opened with $10,000 or less. In 1 year 90% are below $1000 or have closed. We decided not to move forward. There are now very few FOREX brokers at the event and they occupy small booths vs sponsor size exhibits.

Small accounts, trading with excessive leverage and little experiance, IMO, is the reason why regulators have place restrictions on this business.

 

[DepthTrade]

Robert, thanks for the reply.
If anyone sees this poll, please vote.

 

[pipeguy]

I went to the NY Trader Expo in 2012 for the first time. There were many FOREX brokers and some were big sponsors with large exhibits. The firm I worked for was looking for information to decide if we wanted to get into that business. Two FOREX companies provided us the same metrics. 90% of accounts are opened with $10,000 or less. In 1 year 90% are below $1000 or have closed. We decided not to move forward. There are now very few FOREX brokers at the event and they occupy small booths vs sponsor size exhibits.

Small accounts, trading with excessive leverage and little experiance, IMO, is the reason why regulators have place restrictions on this business.

I think they reap juicy returns, but of course for you, potential competitor, they was barely surviving business . The lack of presence is probably due to low popularity of forex in US and tight government controls over their business. But its just my assumption..

 

[Robert Morse]

I think they reap juicy returns, but of course for you, potential competitor, they was barely surviving business . The lack of presence is probably due to low popularity of forex in US and tight government controls over their business. But its just my assumption..

In addition, leverage was higher in 2012 than 2019 for FOREX. People that open accounts with $5000 often only have $5000 and I find smaller accounts gamble more often than larger accounts. While I was at my old firm, we only offered institutional accounts, so retail FOREX only made sense to us as an add-on service to existing futures or equity accounts.
IMO, the forward FOREX business is a great business for the banks and FCMs that offer liquidity but without true price discovery and price protection between markets, not a good market for the consumer. IMO, Futures FX is a better product for the consumer and SPOT FX is better for institutional clients.

 

[Esha.J]

As per mine knowledge, and what I have seen with my friends, the minimum size are between 1000 to 5000. At begin, the size of account is this.

 

[pipeguy]

For forex I usually open positions with 0.1-0.4 lot size, trying to keep risk per trade low, around 0.5% of the account equity. Sometimes I trade 1-2 lots on news can't boast with the results but on Tickmill and IB it works around 60% of cases (based on 50 news-trades on both accounts)

 

[DepthTrade]

Hello pipeguy, thanks for taking the poll.

 

[BaconSandwich]

Agreed that the majority of new FX accounts from new retail clients is on the low dollar side - it's also quite disturbing at times to see such new retail traders opening live accounts and asking questions in a variety of online forums that are so basic that it doesn't even warrant a live account being opened in the first place.

Over the years I've also noticed the online forum activity around FX speculating severely dropping off a cliff, with much much fewer experienced retail traders speaking out, or even taking part. I'd be interested to see the numbers of accounts opened year on year for the past 10 years by unique clients as opposed to the inclusion of duplicate accounts. I can only imagine based on observations that this has also reduced, not to mention the increase in regulation as already mentioned in the above posts.

It's a pity because the FX markets really can and frequently still do offer some real nice opportunities, however as always it comes down to being educated enough to not only spot these but also being able to understand the importance of position sizing, exposure and overall risk. Without this basic understanding, which can seem complex to the noob, accounts are going to get burnt - and as we already know the majority do end up this way.