Retail FX Trader Survey Results

14 Pages Posted: 17 Jun 2016

Date Written: June 15, 2016

Abstract

Between the 29th November 2015 and 25th April 2016, 133 Retail FX traders responded to a request to take part in an anonymous online survey, which asked 14 questions about the way they trade. The purpose of the survey was to inform research looking at effective ways to help improve the profitability and reduce the risk of the Retail FX trader.

Over fifty percent of the respondents stated they had been trading for more than four years. The survey found that more than half of the traders had experienced account-closing losses with nearly 40% have experienced this at least twice. The most common cause of these losses were the use of trades sizes that were too large, with nearly half of all traders stating this was the cause of their worst trade. Additional ‘worst trade’ factors were identified as allowing losing trades to run for too long and the lack of automated stop loss levels. Less than a quarter of traders identified their ‘system’ as being the cause of either their best or worst trades, with ‘best’ trades being attributed to significant market moves over 40% of the time closely followed by allowing winning trades to run for a long time. Only a third of traders said they regularly checked the bid-ask spread before placing a trade with only a quarter ever checking the interest swap charges, despite nearly half of all traders saying they kept trades open overnight. When asked what single area a trader would like to improve, most traders focused on physiological issues rather than system ones.

The purpose of this paper is to share these results with the Retail Trader community and to seek further input as to the best way to help address some of the identified issues.

Keywords: retail, fx, trader, foriegn exchange, survey, results, trading, risk, physicology

JEL Classification: F31, N20, I22, G29

Suggested Citation

Davison, Chris, Retail FX Trader Survey Results (June 15, 2016). Available at SSRN: https://ssrn.com/abstract=2795927 or http://dx.doi.org/10.2139/ssrn.2795927

Chris Davison (Contact Author)

Nottingham Trent University ( email )

Burton Street
Nottingham, NG1 4BU
United Kingdom

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