Stock market losses in – What are they like now?

Stock Market Losses: The European regulator ESMA requires CFD and Forex trading brokers to report the number of clients who lose money. European brokers therefore report on the level of Clients' stock market losses. Brokers outside the ESMA regulatory framework do not report these losses, as they are not required to do so by their regulator. Here are the stock market loss rates reported by brokers:

Brokers Who Do Not Communicate About Trading Losses

The stock market losses of brokers' clients are around 68 - 85%: Why these figures? Who wins and who loses in the stock market?

In the stock market, the natural rate of gain and loss is 50% / 50%. That is to say the sums earned on the stock market are at the same time lost by another investor. So why are we talking about 68 – 85%? In reality, the stock market is not a game of chance and investing in the stock market requires knowledge. Some investors, like Warren Buffet for example – will outperform the market and make a lot of money in the stock market.

How is the CFD Loss Rate Calculated?

Stock market losses = The number of client accounts that recorded losses / the total number of broker client accounts
This means that in the market there are a large number of investors who make losses, and that a smaller number of investors are winners, but with larger gains. This information is not news for brokers: many people who work in the financial world know that people who win money earn a lot and those who lose are more numerous in number and that the average loss is smaller than the earnings of those who win.

Trading Losses & Fees

Trading fees also come into play when looking at trading losses. The more you trade, the more commissions you will pay and increase your trading fees. Being a winner on a position is very important, but having competitive fees is just as important.

How to Know the Trading Loss Level of a Broker's Clients?

All brokers regulated by ESMA must publish the percentage of retail traders who lose money on their trading site. Thus, there is a percentage of loss on the stock market clearly visible on the site of any regulated and serious broker in Europe.

How Not to Lose Money on the Stock Market?

Train yourself in trading like with FWA Trading, develop a profitable trading plan and strategy with strict risk and money management and always follow this trading plan when investing your money in the stock market. If you follow these tips and put them into practice in the best possible way, you will have a better chance of not losing money in the stock market.

Can You Completely Avoid Losses When Trading?

Unfortunately, stock market losses are not inevitable. There are, however, several ways to ensure that your trading gains are greater than your losses in the stock market and that your final performance is positive. For example, you should always trade with a trading plan and you should always use risk and money management tools. In particular, we will think about adapting the size of your trading position to suit your style, your capital and market conditions, varying the leverage effect or even using a stop-loss.

What is the Best Broker to Avoid Losses?

Choosing a broker should be based on your investment style and your needs. However, we consider that the best brokers to avoid losing on the stock market are those which are transparent and which offer a complete free training offer in order to educate their traders and improve their trading skills.

Have you ever used a broker that did not share information about its losses? Share your experience and leave us a comment!