What is the current Forex OTC / CFD statistical trader?

What does the statistical Polish Forex trader look like? They are connected by gender, age, passion for technology and investment. Only a few years ago, the forex and CFD investor was associated mainly with a young man looking for quick profit and a thrill. Today, it can be seen that the market is more regulated, and the average Polish trader is a man, usually over 30, with higher education who values ​​independent financial decision making. He is an increasingly active mobile person who enjoys the idea of ​​freedom of trading in various financial instruments in a decentralized market. He is closely watching technological innovations, because mobile trading is a binding trend when it comes to this way of trading.

- What does not change on the forex market is the fact that mainly men invest in it. Often from large agglomerations, but not necessarily from big cities. We can see that many of the clients are people who have achieved professional success and either moved to the outskirts or live in medium or small towns. Thanks to the process of penetration of the world of investments and mobile technologies, however, the average age of an investor operating in the forex market and CFD contacts is decreasing. Currently, young people constitute an increasing group, but still the majority of investors are people aged 30-50. These include people working in managerial positions, entrepreneurs and freelancers. They invest in their spare time, more and more often through mobile applications.  Currently, more than half of traders use this kind of solutions - says Piotr Adamczak, Sales Department Director at TMS Brokers and adds: "People living exclusively from trading do not constitute more than 5 percent of all investors".

Extremely mobile market

The profile of the Polish trader has changed over the years not only because of technological changes and the fact that modern investing is largely mobile trading or trading stocks in the application, but also because of market regulations and slowly growing consumer awareness that this way you can invest your free funds.

Be sure to read: Comparison of Forex mobile platforms

What do brokerage house statistics show? Marta Klepka, Marketing Director at TMS Brokers:

“From the beginning of 2019, the TMS Brokers mobile application was used mostly by men (82%). Thanks to the availability of the trial version of the brokerage account and the opportunity to try their hand at virtual capital, younger and younger decide to do so. The age of beginners is lowered - people in the 18-24 age group are already playing the test version. However, the most active on the application are those who already have their own funds and earn their living, i.e. men aged 25-45. They account for roughly half of all users. It is interesting, however, that the number of mobile investors in their 50s is growing. Marketers noticed the strength of this target group for a reason. On the one hand, older investors, due to their longer life expectancy and professional activity, have more capital, and on the other hand, they are more and more aware of new technologies and are not afraid to use computers and mobile devices, which cannot be said about their parents. By analyzing data from systems that are able to assign probable interests to the profiles of our application users (based on online and mobile activity), we see that mobile investors are mostly people interested in new technologies and e-commerce customers. More than half of them are also interested in entertainment - for example, they use applications with games or light lifestyle content, on the other hand - they follow key political and market events from the investor's point of view. "

Trading is becoming more and more popular

Today, trading is not only about investing in forex. In recent years, this market has changed a lot in terms of the product offer. Currently, good brokerage houses offer hundreds of products, where currencies constitute a significant part of the turnover, but not as crucial as it was a few years ago. Many investors trade contracts for difference (CFDs) on DAX, S&P 500 or other indices from global exchanges. Instruments based on changes in the prices of ores such as gold and silver are very popular, and there is also a strong interest in trading in oil, natural gas or other raw materials. Traditional forex brokers also offer their clients contracts for the difference in the exchange rate of shares (American, German, Polish and others) or CFDs on cryptocurrencies, mainly Bitcoin. Thus, they enter other market segments previously reserved, e.g. for cryptocurrency exchanges.

The multitude of offers and good mobile channels mean that despite changes in the market in terms of leverage, the mentioned trade in contracts for exchange rate differences is interesting for investors. The Polish regulator made sure that traders did not look for alternatives outside European jurisdiction. In August 2018 The Polish Financial Supervision Authority has introduced the status of an experienced customerthat retail clients who meet the conditions of market knowledge and practice (including trading) may apply for. This means that higher leverage is available to those who are able to skillfully use it and manage their capital and risk. This is a positive change for clients and local brokerage houses.

- There is a great interest in the status of an experienced client, which is unique on a European scale - says Adamczak.

What other changes can you see on the CFD contacts market? The statement of the Polish Financial Supervision Authority published on April 2, 2019 shows, among other things, fromin 2018, the percentage of profitable customers increased when investing in "OTC derivatives". However, the total value has decreased compared to 2017Æ realized customer loss and average loss per customer.

The number of active customers who closed the year in plus increased from 2018 by over 2017 people. However, this caused the statistics to deteriorate  regarding the average profit per client by almost 3 zł. The average loss per trader also decreased by a similar value, but there were more such clients - by over 2400 people. This means that there were about 3400 people more active traders in brokers regulated by the PFSA compared to the previous year. This shows that the popularity of this market is growing. The KNF statement did not include a group of clients that showed neither loss nor profit.

Do Poles Know the Forex Market?

According to the Kantar Public report, commissioned by the Office of Competition and Consumer Protection, published at the end of September 2019 - only 29 percent of Poles know what the term forex means. At the same time, 51 percent. believes that this is a risky market. Only 5% of the respondents say they know and know how investments in the currency market work. Such a picture is painted against the background of uncertainty about risk and little theoretical knowledge and practice in this market.

Lack of practical financial education and the emergence of companies in Poland over the past few years that, without being regulated, promised quick profits to customers quickly disappearing from the market, does not help build confidence in the industry. This may be surprising, since currency brokerage houses have been on the Polish market for over 20 years. TMS Brokers was the first individual player on this market.

- The level of knowledge of financial products is influenced by the age and level of education of the respondents. Younger and oldest people (60+) know the products the least, and more often, despite the knowledge of some products, they do not understand what they are. Also, less educated people do not have knowledge about financial products - comment the authors of the quoted report. This confirms the client profile of the brokerage house outlined above.

A similar investor profile regardless of the market

Results Polish Investor Research conducted annually by SII (Association of Individual Investors), which collects data from both stock market and OTC / CFD investors, also show that the statistical Polish investor is a man (85,8% in 2018, 90,8% in 2019) at the age of about 36- 45 years old, with higher education, investing independently, after business hours.

Since 2002, that is from the moment when the Association of Individual Investors began to conduct cyclical research until 2017, the average Polish investor was slightly "aging". The percentage of respondents aged 46 and over increased, and the share of investors aged 25-45 decreased. As the market grew, it seemed, those who stayed in it gained experience. However, in 2018 a trend reversal is visible - the largest increase was recorded by the group aged 36-45 (from 27,6% to 32,3% of all participants in the survey), while in 2019 the group of investors aged 25-35 grew the most dynamically years (they were already 1/3 of the respondents).

The 2018 National Investor Survey indicated that the value of portfolios also grows with age. Among the youngest people, investment portfolios up to 10 thousand. PLN. Men over 36 invest the most. SII did not publish such data for individual age groups for 2019. On the other hand, another result from 2019 is interesting, which showed that almost half of investors (47,3% of respondents) spend relatively little time trading - from a few hours a week to an hour a month. In order to increase the effectiveness of their activities, they most often analyze instruments using both fundamental and technical analysis. However, every tenth respondent declares that he is unable to analyze financial instruments and, interestingly, this percentage does not decrease much in the group of people with capital above PLN 10. Another interesting conclusion from the SII survey is the motivation of modern investors - they more and more often invest in the long-term and more and more to build their retirement capital (as many as 500% indicated that this is their main motivation).

The results of research and analyzes show how dynamically the investor's profile in Poland is changing, regardless of what he trades and how the role of brokerage houses evolves. While focusing on the most attractive group of clients, brokerage houses must also work on an offer for young people entering the market with less funds, but with a greater potential for quick implementation in mobile trading. The latter allows you to track the market and investor sentiment. It gives the possibility of convenient trading with one tool in which - thanks to recommendations and push notifications - investment signals can reach clients exactly at the moment when an opportunity arises. This is a response to the problem of the lack of time for analysis, with the simultaneous desire to keep your finger on the pulse and choose yourself whether the type of experts is something we want to invest our own money in.

source: DM TMS Brokers press material