KNF report: In 2020, 77,7% of investors lost on Forex

Polish Financial Supervision Authority published a report on the losses and profits of Polish investors on Forex market in 2020. It shows, among others, that nearly 80% of people last year suffered a loss, which on average amounted to 19 thousand. PLN per person. Although the document itself has only two pages, it contains a lot of additional, interesting information that is worth analyzing.

Nearly 18 traders made money, but ...

It sounds pretty good, especially since in 2019 only 11 traders made a profit and earned a total of PLN 605 million. In 119,5, exactly 2020 ended the year in plus, and the total profit amounted to PLN 17 million. But unfortunately, in percentage terms, the profit was recorded by over 914% fewer people, with a simultaneous, devastatingly greater total loss (in 277,4 it was PLN -397,8 million; in 2020 it was -1 189,9 million PLN). The average profit increased, the average loss increased, but ultimately the report was strongly negative.

Source: elaboration of the UKNF on the basis of data provided by supervised entities

Where did such disastrous data come from? First of all, with "Investment boom"caused by the Covid-19 pandemic. The above-average volatility and the vision of quick, substantial profits attracted crowds of new investors, often inexperienced and without sufficient preparation. Compared to 2019, the number of active investors practically doubled last year (a jump from 32 people to 194 people). Looking back even more, you can see that it was a real sensation and it is in vain to look for other reasons here, e.g. "Dynamically developing industry" or "Increase in the wealth of Poles".

Stock markets flying headlong, record cheap oil reaching even negative prices, and then a crazy boom, these are the conditions in which even more experienced traders had to face the problem.

Incomplete statistics

The data presented above include only traders who use the services of Polish brokerage houses under the supervision of the Polish Financial Supervision Authority. We do not know anything about the situation of Polish investors trading with foreign entities, whose services are usually used by people with some experience in trading.

At the end of March this year. we published an article with data on the percentage of earning peoplewho also use the services of several foreign brokers. And these figures seem to be more optimistic. Out of 10 companies, the last two were taken by the two largest Polish Forex brokers. In the case of foreign brokers, the percentage of earners was clearly higher and even reached 35%.