Yes, we will really try to start this conversation. No, this is not the reason to avoid Forex or consider fraud as a possible client. These are very real dilemmas that tarnish the image of the industry and reduce the activities that take place. The marginalization of Forex is a problem for brokers trying to promote their services, and the stigma is applied to traders. Who bears the burden of responsibility for the downward spiral of the industry? Hint, hint: These are all involved.
5. Brokers who insist on deposits in any way
Yes, the economy is in bad shape and businesses will do everything possible to make sure the money is in their coffers. Does he apologize for the absurdly low minimum deposits? Does he apologize for sales calls after a few days of using a demo? Does he apologize for the careless return of money and leverage offers?
If it seems that the Forex industry has taken some advice from the casino gaming industry, you are probably more observant. Casinos and poker sites use rakeback, comp and VIP bonuses to generate loyalty and use deposit bonuses to take you away. Forex companies, acting as casinos, tarnish the reputation of the industry and the transactions that take place. The bad actions of brokers make the action that takes place in the most liquid and active market in the world seem insignificant and stupid.
Ridiculously low deposits are also a problem, $ 1 deposits are stupid. Then again, any broker who takes deposits under $ 250 should really let you scratch your head. Forex is not a trip to a horse track, a racino, slot machines, nor is it a lottery! People need to trade an amount that is convenient for them to trade, but they would take trading seriously.
By acting as casinos, brokers reduce confidence in the foreign exchange market.
4. Signal boosters that swirl
Snake oil traders in the Forex industry are ready to serve you their sacred grail, developed by “brilliant” minds who have tested trends over the past 15 years that will guarantee you a% profit or a profit percentage above a certain point. This is just stupid, there are no guarantees on the market. Even fixed income securities need to be valued to ensure that they will be repaid on corporate / government / municipal debt.
Websites for most of the whistleblowers are deceptive and they are unwanted by forums and Twitter. They plunder those who lose money so that they can buy their services. If their signals were so good, they wouldn’t have to spread them to the public so that everyone could use them at a price.
If someone had signaling software that worked 80% of the time and locked in 20% of the profits, would they really make the effort to distribute it at a price? No, the user will trade based on this information and will do so at leverage levels that he feels comfortable with, and will not share this valuable information. They will become rich in a short period of time and the world will not know about signaling software. Is signal software as good as algorithmic trading software developed for banks and quantum hedge funds? Probably far from it. Yes, banks lose money from transactions even in high-frequency trading.
There is no magic elixir, sorry.
3. The current form of demo trading
Do you have $ 100,000 to throw at Forex trading? Okay, do you have $ 50,000? Okay, how about $ 25,000? Well, Forex brokerage firms – believe me you do! Or so it seems … Is it possible for these ridiculous demo amounts to be introduced to create unrealistic expectations in the minds of traders, to make them trade in a real environment, thinking that they can reach such high levels on their own?
Or … Maybe brokers think that offering something that is so unrealistic that their demonstration is just for those who are just interested in training and experience in trading software? Perhaps the only realistic brokerage experience they can provide is worth it and it is designed that way.
The other explanation is maybe they don’t have very good ideas to come in and keep the clientele.
2. Forex scams
The unfortunate thing about Forex is that bucket shops, scammers, boiler houses and brokers who trade against their clients are much more common than you think. These companies and the individuals who run these companies are pushing the industry out. Regulations are increasing and start-ups with alternative visions have to raise huge amounts of capital just to compete in certain markets where customer driving itself is not safe.
Forex scams make the industry look shady and obscene, when in fact it is an alternative trading market for those who do not want to track 5,000 different companies. It is very similar to Las Vegas in the 50s of the last century and stains all participants. It hurts to outreach a new clientele because they’ve probably heard a horror story about how someone lost a lot of money or their identity from a Forex scammer.
Those who perform these schematic operations who want to snatch or injure their customers must shut down and return their money to customers.
1. The merchants themselves
From dreams of a pie in the sky to get rich quick due to excessive leverage to not taking the time to choose the right brokers to lack of preparation for live trading. Traders themselves give the industry a bad name because they fail with an outstanding 65.01% video (2nd quarter of 2013 in the US).
The intimidation tactic used by many is that 95% of traders lose their money, but the facts do not actually support this. The so-called intelligent merchants continue to parrot this nonsense as if it were gospel truth, but the reality is that it is a lie. More traders are succeeding than what is being said on bulletin boards, forums and seminars. The failure rate is 65%, you will see that the failure rate varies from 54% to 78% depending on the broker. Not so shockingly, brokers who attract consumers with ridiculously low deposits have higher levels of unprofitability.
The problem is that most traders are completely uninformed and when they communicate with each other and future traders, they give bad information. This is detrimental to the industry.
Continuing to perpetuate the problems plaguing the industry will eventually put an end to retail currency trading in much of the world, and that would be unfortunate.