Le trading actif de détail comme mécanisme de revenu: une impossibilité statistique. Évidence réglementaire, littérature académique et simulations de ruine, avec une application aux marchés d'Afrique

Active retail trading as an income mechanism: a statistical impossibility. Regulatory evidence, academic literature and ruin simulations, with an application to African markets

Caleb Bonyi Mukadi Mukandila

MPRA Paper from University Library of Munich, Germany

Abstract: This paper examines the viability of active retail trading (day trading, CFDs, forex) as a mechanism for regular income. We draw on three converging bodies of evidence: regulators' studies (AMF 2014; ESMA 2018), the academic literature based on administrative data (Barber and Odean 2000; Barber, Lee, Liu and Odean 2009, 2014; Chague, De Losso and Giovannetti 2020), and ruin-probability simulations. The stylized facts are consistent: 74 to 89% of European retail accounts are losing accounts, 89% of French clients lost on average EUR 10,887 over four years, 97% of Brazilian day traders lose money, and less than 1% of Taiwanese day traders generate a predictable net profit. Our simulations show that a trader with a capital of 5,000 USD aiming for 100 USD per day faces a one-year probability of ruin of between 47% (10:1 leverage) and 99% (30:1 leverage). A second calibration, referred to as "offshore", reproduces the conditions actually accessible from an African city such as Kinshasa: capital of 500 USD, increased frictions, leverage up to 1:500. At the minimum leverage required to aim for 100 USD/day (25:1), the one-year probability of ruin reaches 98% and median survival stands at 43 trading days; at 500:1, it falls to two days. In the absence of a public database of Congolese traders' accounts, we draw on the available data (Global Findex; ARPTC; continental sector estimates) to assess the exposure channel: a tripling of mobile money penetration between 2020 and 2023, approximately 1.3 million retail traders estimated on the continent, and the absence of supervision of retail forex in the DRC. Finally, we discuss the commercial ecosystem that thrives on this asymmetry (signal sellers, "prop firms" with challenge fees, guaranteed daily return schemes) and its consequences for savers in French-speaking Africa. We draw from this a public policy conclusion: in its typical retail use, active trading exhibits the economic characteristics of a negative-expectation game rather than those of an investment and cannot be presented as an income mechanism; the regulators of French-speaking Africa, including the Central Bank of Congo for the DRC, should use mobile money and electronic card transaction data to carry out sensitivity analyses and establish strict regulatory measures protecting savers from these risky games.

Keywords: day trading; retail investors; CFD; forex; probability of ruin; saver protection; French-speaking Africa (search for similar items in EconPapers)
JEL-codes: G11 G14 G18 (search for similar items in EconPapers)
Date: 2026-06-08, Revised 2026-07-09
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