How Forex Brokers Weaken Forex Retailers

Forex Traders and Brokers | According to Wikipedia, “A monetary scam is a trading system used to defraud individual traders by convincing them that they can make big profits by trading the foreign exchange. Futures trading commission.” There are many ways to show brokers and market makers to poor poor grain retailers.

Wikipedia quoted “The Forex market is a zero-sum game, meaning that anything one operator wins loses another, except that brokerage fees and other transaction fees are deducted from the results of all traders. Technically, Forex has a becomes “negative sum game.” These scams may include abandoning customer accounts to generate commissions, selling software that should lead to large profits for the customer, mismanaged “managed accounts”, advertising counterfeiting, Ponzi schemes and absolute fraud Any Forex retail agent claiming that foreign exchange is a low risk, high profit investment The US Commodity Futures Trading Commission (CFTC) The United States, which freely regulates the US foreign exchange market, has seen an increase in unscrupulous activity on the non-bank draft. “

According to Wikipedia, there are many ways / reasons why forex retailers are losing their money. “The Forex market is a zero-sum game where many well-capitalized and experienced professional traders (such as banks) can devote their full attention to trading. An inexperienced retailer comes at the cost of essential information compared to these traders

While some experts can successfully mediate the market for exceptionally high performance, it doesn’t mean more people can achieve the same results even with the same tools, techniques and data sources. Indeed, arbitration is essentially subtracted from a group of limited size; While the information about entering the arbitration is not a competitive product, the arbitrators in themselves are a rival.

(To make a comparison, the total number of treasures buried on an island is the same regardless of the number of treasure hunters who have purchased copies of a tax card.) Definition underfunded. Therefore, they are subject to the problem of ruining the player. In a fair game (one with no informational benefits) between two players who continue until a dealer goes bankrupt, that player with the least capital has a higher chance of going bankrupt first.

Since the retail speculator is actually playing against the market as a whole, which has almost infinite capital, he will almost certainly go bankrupt. The dealer always pays the bid / ask margin, which increases your chances of winning less than a fair game. Additional costs may include an interest margin, or if a cash position remains open for more than one day, the transaction can be “reinstalled” every day, each time with a full bid / ask spread.

According to the Wall Street Journal (Forex Markets Pulling Speculation, Fraud, July 26, 2005) “Even people who do business warn customers not to try to spend time on the market.” If 15% of the daily traders are profitable, “said Drew Nib, CEO of FXCM,” I would be surprised. Financial Times quoted Paul Belo our, CEO of a Boston-based forex trading retailer, “Currency trading is a good way for investors to see how difficult the markets are, but I say to customers, if the money is what you are hard for you cannot afford to lose and never invest in currency. “

Use of strong leverage

By offering high leverage, the market maker encourages traders to trade in extremely large positions. This increases the volume of market maker-approved trades and increases their profits, but increases the risk of the merchant receiving a margin call. While professional currency traders (banks, hedge funds) never leverage more than 10: 1, private clients generally leverage between 50: 1 and 200: 1.

Why do so many Forex traders lose?

Studies have shown that 80% of forex traders lose and pay the 20% they earn. Then 95% of those who lose after their first defeat lose, leaving just 5% and joining 20% ​​of the most experienced winners.

What do these numbers show for potential currency traders?

What do these numbers show for potential currency traders?

The easy way to post these stats is to say that out of 100 forex traders, only 20 would make a profit, lose 4, but keep trying until you’re good and the other 76 would lose and stop trading for life. The fundamental question now is: why would too many operators lose? That is a good question. But the answer is simple: 80% who lose trading with EMOTION. If the reason is so simple, why lose and quit 76? Because they cannot adapt and act without emotion. Most traders learn Online forex trading, train for only a week or two, load their account and get started, and as expected, with little experience on their side, they go down and burn. So quitting smoking seems to be the next best option. No brother! No !! We solve your problem!!!

Why Traders Lose Money in Forex Trading

Why Traders Lose Money in Forex Trading

From personal experience and meet some traders, I have discovered two main reasons why they are losing:

1. Does not follow a commercial strategy:

Most traders don’t have a trading strategy to follow which is why they play forex and intervene when they notice a move in any direction. For example, if they see a currency pair rise, they buy immediately; and when they see it fall, they immediately sell without knowing the underlying causes of these sporadic movements. These are pure emotions at work, which is why this group of operators is called emotional operators. They spontaneously end up with these sporadic movements, which is why they suffer losses every time and say things like “Forex is happiness”. That’s what they play: Game of Luck.

Others see the market with too many trading strategies and switch from one to another after a trade that has not favored them. What do they get? A losing streak because they can switch to a strategy when it gives a false signal and jump when it generates a good signal. As we all know, this is not a single business strategy that is right up to 90%, not to mention 100%. I disagree; I think you should do a Google search. The reason is that the forces that drive the market are countless, and since no one can use all these forces to trade, we can only say where the coins would go in the long run. This is why the Big Dogs are the only operators in almost 100% of the foreign exchange market. They use as many engines as possible and engage in long-term exchanges in their analyzes. This group of current traders, when they are sufficiently frustrated with their loss streak, generally feels it is time to quit.

2. Don’t use money management:

Even the richest central bank in the world cannot dictate how and where the foreign exchange market would go or should go for so long, with all the money available for trading, as the foreign exchange market generates approximately $ 2 trillion. dollars a day. If this is true, how much do you have in your account that makes you think you would always do well or even if you used large batch sizes to place your trades? An example could be an operator with $ 1,500 in their account. Since you want to trade big lottery tickets for quick wins and double the account in the shortest time possible, choose very high leverage say 1: 500 (this is what I call leverage as this does not mean leverage is bad ( in fact the best) and eventually places 1 standard ticket, for such a person the intruder may only be 150 pips against you to clear your balance or 120 pips to get a margin deposit with a balance of less than $ 300.

Money management is key. I say to my Forex students, “You can’t run away from money management.”

Do you think I’m lying? Let’s be honest. If, instead of trading 5 micro lotteries with cash management, you are going to trade with 1 standard lot, you would have lost a lot of money quickly after a small loss and you would not be able to trade with these large lots, it would even be difficult to 1 mini lot to market. And at that point, whether you like it or not, swap 5 micro particles.

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