TL;DR: Too much size, too many trades, and costs that eat small edges. Strategy is rarely the main problem. Fix size first.
Every broker regulated in the UK, EU or Australia has to show a warning like "X% of retail investor accounts lose money when trading CFDs with this provider." The figures are commonly somewhere between 60% and 80%. That is not a rumour or a scare tactic; it is calculated from the broker's own client accounts and updated regularly.
So why?
1. Position size is too big
This is the big one. A trader with a 2,000-dollar account opens 0.5 lot of gold. A 10-dollar move against them is 500 dollars, a quarter of the account. A normal day in gold can move 30 dollars or more.
One or two bad days and the account is crippled, regardless of how good the analysis was. Size from the stop, risking 1% or less per trade, with the position size calculator.
2. Too many trades
Each trade pays the spread and sometimes commission. If you don't have an edge, every extra trade is a small guaranteed loss. If you do have one, it is usually small, and over-trading dilutes it with low-quality setups. See overtrading gold.
3. Costs nobody counts
Spread, swap, slippage, conversion fees. On short-term gold trades, costs can take a big share of the average win. Our breakdown of the full cost of one lot shows how quickly it adds up.
4. Cutting winners and holding losers
It feels good to bank a small win and bad to accept a loss, so people do the opposite of what works: close winners early, hold losers hoping they come back. Over time the average loss becomes bigger than the average win.
5. No written plan
Without a plan written before the trade, every decision is made in the moment, under pressure. That is when the mistakes above happen.
6. The wrong broker
Not the main reason, but real: offshore entities with high leverage make it easy to over-size, and bonus conditions encourage more trading. See why regulated brokers can't offer bonuses.
What the minority does differently
- Risks a small, fixed percentage per trade.
- Trades less, waiting for setups they have tested.
- Knows their cost per trade.
- Keeps a journal and reviews it weekly.
- Survives long enough to improve.
None of this guarantees profit. It moves you from "will almost certainly lose" to "has a chance".
Questions traders ask
Is the system rigged against retail traders? Costs and leverage work against short-term retail trading, and some brokers profit when clients lose. That's why the choice of regulated broker matters. But most losses come from the trader's own sizing and frequency.
Do professional traders lose money too? Yes, often. The difference is that they control size so no single loss ends the game.
What's the first thing to fix? Position size. It is the cheapest fix and has the largest effect.