As today’s latest example of pervasive, apparently endless criminality at the world’s largest banks, where once again the shocked public is exposed to a culture of sociopathic, unchecked greed and perpetual raping of clients, showed, one is either part of the all too literal “cartel”, or one loses money.
However, for those who are unfamiliar with the nuances of FX trading, one doesn’t even have to be on the other side of the world’s most criminal, above the law, cartel of bankers to have no P and only L: the fundamental premise of currency trading, whereby one can and will be stopped out thanks to leverage as high as 50x – by others but mostly by one’s own brokers as we learned today courtesy of JPM, Citi, RBS, HSBC and UBS – is the very same reason why as retail FX trader Dan Gratton, a 71-year-old retiree who lives on Social Security in Kingman, Arizona has found out: “Probably the most consistent thing is losing.”
He is referring to FX trading, adding that he’s been a student of the the Market Traders Institute Inc., the oldest and largest currency trading “school” for two years and had hoped that taking its home-study classes and watching webinars would help him succeed with forex trading. Not only has that not happened, but Dan has lost tons of money in his pursuit to get rich quick, thanks to the same leverage that allows him to dream of big paydays just around the corner.
But at least Dan spending for “class” upon “class” in hopes of honing his FX trading skills, has made the owner of the Market Traders Institute, shown below, insanely wealthy and with lots of credibility-building computer screens.
As Bloomberg reports, most retail currency investors lose money most of the time, according to the industry’s own data. Reports to clients by the two biggest publicly traded over-the-counter forex companies — FXCM Inc. (FXCM) and Gain Capital Holdings Inc. — show that, on average, 68 percent of investors had a net loss from trading in each of the past four quarters. These kinds of losses make for investor churn.
This post was published at Zero Hedge on 11/12/2014.