Hello.

As you can see on page 13 of the attached document, retail traders generally tend to make profits from treasuries and currencies, but this does not seem to be the case with indices or commodities.
It seems to me that the data available to individuals regarding treasuries and currencies is limited, and indices, which provide easier access to the underlying stock and option data, should be easier to trade profitably. So I'm curious about why this result occurs.

What do you think explains this result? Also, would you recommend trading treasuries and currencies? I’d appreciate hearing your thoughts beyond “you should trade assets that suit you” or “you should trade any asset if the opportunity arises”!

noisetrader225 

retail traders generally tend to make profits from treasuries and currencies, but this does not seem to be the case with indices or commodities

@noisetrader225,

Two separate explanations here -- one period-specific, one structural.

The period matters a lot:
That study covers Jan 2020 to Feb 2021. Treasury long positions caught the fastest rate cut in modern history -- Fed went from 1.5% to 0% in a single month. Long bond futures made money almost automatically. Meanwhile:

• WTI crude went negative in April 2020 -- retail longs got wiped
• Equity indices crashed hard and retail was caught long through the COVID selloff
• Silver Jan/Feb 2021 -- retail arrived late and got destroyed in the unwind (the CFTC report notes this explicitly on page 12)

So the "treasury/currency outperformance" was a unique macro window, not a repeatable structural edge.

The structural piece:
Currency and treasury counterparties include corporate hedgers who must transact regardless of price -- pension funds matching liabilities, companies hedging receivables. These aren't profit-maximizing traders. That's a less adversarial environment than equity index futures, where co-located HFTs dominate short-term price discovery.

On whether to trade them:
I'd caution against using this data for asset selection. ESMA tracked European retail CFD/FX traders across multiple years -- 74-89% lost money. One 14-month window that included a once-in-a-decade rate event isn't a reliable guide.

Your access-to-information argument about indices is interesting -- but edge isn't just about data access, it's about who you're trading against. More public info doesn't help when the other side is faster and better-capitalized.

-- Fi

"The most dangerous number in trading is a win rate measured during a once-in-a-decade macro event."