Forex Brokers – Who Win With Them From a Brokers Point of View
I spent 15 years as a broker on the desk trading clients and also worked in the back office, before switching to educating clients and can tell you who losses and what the minority do who win.
The first point I can confirm is 95% of clients lose quickly and only a few survive to make money and from a brokers perspective this is actually good. Why because most brokers are market makers and when you lose the market doesn’t get your money, the broker does and that’s a lot of money.
Do brokers care if clients win?
No not at all, they just know the odds are in their favour, despite all the great services they offer, traders beat themselves. Contrary to myth brokers don’t hunt stops or do anything sneaky, they just know the odds and let the traders do as they wish.
So who losses? Well here are some common groups.
Forex day traders and scalpers.
They blame brokers for stop hunting – but its obvious prices are random in a day and normal volatility gets them. When a day trader came in and opened an account, you put him down immediately as a loser.
Forex Robot Traders and Sure Fire Methods
Another great bunch of losers! They buy a robot with a simulated track record or one that can predict with scientific accuracy and then find out these trading systems are about as accurate as a horoscope and there money is soon lost.
The Educated Fool
I am using a title coined by trader Jake Bernstein and it’s very apt. You get a lot of these traders, they think their clever and build highly complicated systems which lose. They might be clever but there not smart and the market teaches them a lesson in manners. This group wine like babies when they lose and have huge ego’s, they cant take losing and blame everyone from the wife, to their broker.
The News Story Junkie
He trades every scrap of news quickly but doesn’t know the obvious fact that the market is a discounting mechanism and markets trade on the future not the present.
Over Leveraged and Under Capitalized
This is a huge group they put up a few hundred bucks and don’t realize leverage is a double edged sword, their gone within a few days or a few weeks. NaÃ?ve and stupid they think they can leverage up small amounts and get rich and get caught by a small move against them and blow their accounts out the water.
So who won?
Mostly traders who were not bright or clever but humble and disciplined and who did not over leverage. They had there own system and applied it with rigorous discipline.
These traders always protected what they had and its illuminating to think the two top traders I saw were a retired lady of 83 and a long distance truck driver! These two thrashed the wiz kids, the sure fire systems and were still going strong when I left the business.
So there you have it, you can learn to trade currencies and be successful – but avoid all the hype and myths you read and get yourself a good forex trading education.
Be humble, protect what you have at all costs and follow your forex trading strategy with discipline and maybe you could be as successful as the retired lady and the truck driver – and trust me, if you are, you will be very rich.