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Trading styles

The retail trader:trading your own account.

A retail trader is an individual who trades their own money in a personal account, as opposed to an institutional trader who trades a firm's capital for a bank, fund or proprietary trading firm. Retail traders usually trade smaller sizes, pay higher costs and use leverage. Regulators' data show most retail accounts trading leveraged products lose money.

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Retail vs institutional traders

The differences are about capital, costs, access and oversight.

Retail and institutional traders compared
Retail traderInstitutional trader
Whose moneyTheir ownThe firm's or its clients'
Typical sizeSmallLarge
CostsRetail spreads and commissionsNegotiated, usually lower
Risk limitsSelf-imposedSet and enforced by the firm

What the evidence says about retail results

European regulators found that 74-89% of retail accounts trading CFDs typically lose money, and large studies of retail day traders reach similar conclusions - see how much day traders make. The figures describe retail traders as a group; individual results vary.

Where a prop firm evaluation fits

A retail prop firm evaluation sits between the two. The trader is an individual, but trades a simulated account under a firm's risk limits and, if they pass, can receive a share of simulated profit. The trader's maximum loss is the fee, not their own trading capital. The rules - daily loss limits, drawdowns and consistency rules - resemble the limits an institutional desk imposes.

Step by step

How to identify it

Whatever kind of trader you are, the useful questions are the same.

  1. Whose money is at risk, and how much of it?
  2. What does each trade cost, including spread and commission?
  3. Who sets the risk limits, and are they enforced?
  4. What does an honest record of your results show?

Worked example

The concept,walked through

The same idea, two traders, described

An illustrative comparison in words. It is not a record of any real traders.

  1. 1. RetailAn individual buys a currency pair in their own account, with a stop they may or may not keep.
  2. 2. InstitutionalA desk trader takes the same view with the firm's capital, inside a loss limit a risk manager enforces.
  3. 3. EvaluationA trader on a simulated prop account takes it inside a daily loss limit that ends the account if breached.

The idea was identical. What differed was whose money was at risk and who enforced the limits.

Common mistakes

Where tradersgo wrong

Assuming retail means beginner

It describes the account and the money, not the skill.

Ignoring cost differences

Retail costs are higher and matter most to short-term strategies.

Having no enforced limits

Without a firm's risk manager, the trader has to impose them.

Limitations

What it cannottell you

No chart concept predicts price. These are the limits worth keeping in view.

  • Retail results cited here come from particular markets and studies and describe groups, not individuals.
  • The boundary between retail and professional categories is set differently by different regulators.

In an evaluation

Using it on asimulated account

GFN accounts are simulated. Traders who pass and trade a funded account can receive a share of simulated profits as real payouts, and the fee is the maximum loss.

Trading rule

What is the daily loss limit?

The firm-set limit most evaluations are measured against - 3% on Instant and 5% on 1 Step and 2 Step.

Trading rule

How often do I get paid?

How payouts from simulated profit are made.

Trading rule

How much of the profit do I keep?

The share of simulated profit paid to traders.

Questions

Asked aboutthis concept

An individual who trades their own money in a personal account, rather than trading a firm's capital as an institutional trader does.

The evidence says so for leveraged products: European regulators found 74-89% of retail CFD accounts typically lose money.

Keep learning

Relatedlessons

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How Much Do Day Traders Make?

An honest answer to the income question: what large studies of retail day traders found, and why a per-month figure is the wrong thing to look for.

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The History of Social and Copy Trading

From signal sharing to automated copying: how social and copy trading developed, how the three forms differ, and why the rules around it tightened.

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Swing Trading vs Day Trading

How swing trading and day trading differ on holding time, screen time, costs and overnight risk - and why neither is the easier route.

Sources

What this pagerelied on

  1. Retail investor - Wikipedia. Retrieved 23 September 2026. The distinction between retail and institutional participants.
  2. ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors - European Securities and Markets Authority. Retrieved 23 September 2026. National regulators' finding that 74-89% of retail CFD accounts typically lose money.

Educational content only, not investment advice or a recommendation to trade. Chart concepts describe what price has done; none of them predicts what it will do, and trading any strategy can lose money. Get Funded Now accounts are simulated and trade virtual funds. Last reviewed 22 September 2026.

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