The biggest trading study ever (43M trades) EXPLAINS WHY most traders lose money. The lesson is also valid for algo traders.
u/Money_Horror_2899 ·
Reddit — r/algotrading
· July 07, 2026 at 14:32
· ⬆ 27 pts
· 💬 22 comments
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Summary
The post summarizes a large-scale FXCM study of 25,000 retail traders (43M trades) showing 62% winning trades but overall losses because average losers are nearly double average winners.
The author’s thesis is that human loss aversion – cutting winners early and holding losers too long – is the core reason most traders fail, and algo traders must avoid coding these biases.
Quality assessment: This is well-researched DD, referencing a real broker study with statistically significant data; it’s educational rather than a direct trade call.
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A huge study by FXCM tracked 25,000 retail traders (their own clients) over 15 months. In total, they took a staggering **43 million trades.**
The study found that:
These traders won 62% of their trades… but still lost money overall.
Why? Because their losses were MUCH bigger than their wins.
Examples from the study:
\- Average EUR/USD winners: +65 pips
\- Average EUR/USD losers : -127 pips
Yep, never forget that you can win 7 trades out of 10 and still blow your account if you let losers run and cut winners too early.
**This study reveals the REAL problem: pain avoidance**
Human instinct does the opposite of what trading requires:
\- When losing, these traders held, hoping it comes back to their entry
\- When winning, they "panic closed", fearing profits will disappear
In both cases, they were trying to avoid pain.
This is classic loss aversion. Our brain are naturally built for survival, not markets. "Rewiring" it requires tremendous discipline and perseverance.
We all know the famous stat "85% of retail traders lose money". I find it fascinating how this study managed to reveal the real reason behind this very high failure rate, **with genuine data** (43 million trades is insane statistical significance).
So even though you do algo trading, beware not to implement these bias into your code (especially the cutting or protecting winners early).
I also found another similar study done by the CFTC on futures accounts.
Cheers!