Until this year, the plethora of notorious wide-boy FX trainers who are self-styled egomaniacs had proliferated the FX training sector…. Until this year, the plethora of notorious wide-boy FX trainers who are self-styled egomaniacs had proliferated the FX training sector. Senior executives of FX firms, introducing brokers and software vendors are all too aware of the presence of such irksome entities, however there are clearly still enough retail FX traders who are taken in by the slick, and sometimes forceful sales tactics that such trainers use.
From making movies of scalping whilst flying a helicopter, to peddling software from custom-built yachts, training courses for novice traders have long since been acknowledged to be a combination of expensive, often dubious, trading software, courses which make trading look as though it is very straight forward during which demo accounts are used for seminars instead of live trades being placed, and the forging of IB relationships with unregulated brokerages in less than salubrious locations.
This changed last year, when actual educational establishments began establishing trading courses, such as University of Essex Online, which offers a bona fide training course in conjunction with prominent news source FXStreet. Thus began the new direction of training, in which new traders can have confidence in the pedigree of the institution handing down the knowledge. There are, however, still some nefarious individuals on the loose, and it has been brought to the attention of FinanceFeeds that one particular practice that is being carried out by those with potential malintent involves attempting to dupe customers of defunct brokerages who have lost funds when an unregulated FX firm goes west.
Trainers do not have to be regulated in any jurisdiction, as they register their companies as educational entities rather than financial advisers or brokers, and do not handle client funds. Therefore, many of them become introducing brokers of unregulated, small FX firms and then not only sell software and training courses to their delegates, but also place them with firms that are less than well known in order to ensure that their initial deposit is lost, and profits are split between the broker and trainer.
Often, such small firms do not stay in business for very long, because their busines model is to profit from the losses of clients, therefore the idea is to take as much as possible until the leads eventually run out due to bad reviews on consumer forums, and then make off with the money. Less than reputable trainers know this, and have often worked with brokerages which have indeed made off with the money.
The other broker of course is the latest unregulated shop that the training company has a relationship with, and has absolutely no connection with the previous broker that has long since disappeared. Once confidence is gained, the client may then deposit more funds. This is very clever on the part of the training firm because these are clients who had initially shown absolutely no objection to depositing several thousand dollars with unregulated firms having done no research to find the litany of bad reviews about both the training companies and the unregulated brokers which are publicly available on the internet.
Therefore, there is a high probability that such clients may see the training firm and the new broker as extremely helpful and deposit more funds, only for the same to happen again. A quick search on the internet will root out all of the well-worn, overly enthusiastic methods used by the same notorious individuals. FinanceFeeds recommends to only ever invest with a regulated brokerage in a good jurisdiction, and only to use bona fide training firms which are part of actual academic institutions.
Either that or save your money and use high quality charting and analytics software which can be provided via most reputable brokerages and has been developed properly by specialist industry experts. This is a FAR better option altogether. I had suspected for some time that scam brokers were in cahoots with either education firms or they are actually one in the same firm or con artist s under 2 different names.
One scam I remember was where a broker spoofed a live server and advertised an EA or managed acct service that showed amazing gains…. You either had massive losses or just took off with the deposit altogether. Six years ago is a lifetime in terms of retail FX trading methodology. The bogus and the profane were abound, however one evergreen FX industry stalwart took the education resource ideology to a high level, whilst at the same time using it as a platform to generate long term traders and trumpet the agency execution model.
Some IBs will bring you deposits and volume. But before you give someone a stage and a microphone make sure they know what to say before they open their mouth, says Evan Tzivanakis.
The boiler room and bucket shop have existed in stock trading for years. Our industry, within just 10 years, is.
Share 2 Subscribe Popular. Inside View This day in history: Education, education, education Six years ago is a lifetime in terms of retail FX trading methodology. Opinion , Week in Review Financial markets training. Valuable or a waste of time and susceptible to scams? Retail FX , Technology This day in history: The very first integrated online FX trading system goes live Until this year, the plethora of notorious wide-boy FX trainers who are self-styled egomaniacs had proliferated the FX training sector….
Inside View , Retail FX End of the retail FX boiler room — The only way nowadays is sophistication The boiler room and bucket shop have existed in stock trading for years. The one and only. Subscribe Leave this field empty if you're human: GMO Coin to add Ripple to offering. Customers of Interactive Brokers file class action complaint over management of portfolio margin accounts. Shanghai Money Fair Day 1: Trustee says MtGox's bankruptcy proceedings to continue as usual despite civil rehabilitation petition.