We were very fortunate to attend the Finance Feeds Cup in Limassol, Cyprus on November 3rd and were in fact honoured to be asked to give the ‘keynote’ speech at the event.
The Finance Feeds Cup is a networking event run by Andrew Saks-Mcleod and Noam Stiekema the founders of Forex industry online magazine Finance Feeds.
When Andrew asked us to speak at the event both Tom and I were a little…bemused. What could two newbie retail traders possibly have to tell a whole room full of experienced brokers and assorted industry professionals? And at their own conference!?
But, what we hadn’t counted on was the sheer hunger that the industry has for the viewpoint of retail traders. So the first thing we learned at the Finance Feeds Cup in Cyprus was:
1) Brokers really really want to hear what you think
If you are a retail trader with any level of experience whatsoever then all of the brokers we spoke to would love to hear from you. Even if you have never traded a day in your life but are thinking about getting into the forex game, then forex brokers genuinely care about your viewpoint.
Now, what I don’t mean here is: “your broker is desperate to hear your hard luck stories”. There is clearly a certain weariness among the people we spoke with about the tendency of retail traders to blame their broker when they blow up their account.
But, if you have some constructive thoughts on the good, bad and ugly of the trading industry then these people want to hear. They want to know what it is that will get you trading, help you be profitable and stick around for the long-term.
This presumably stems from the feeling that most traders don’t last very long in the industry and that means something must be going wrong.
Which brings me onto the second thing we learned:
2) Your broker really really wants you to be profitable… probably…
It must be emphasised that Andrew and the team at Finance Feeds went out of their way to invite quality brokers. No Binary Options firms allowed!
But nevertheless it was reassuring to see, even after a few drinks when all of us are prone to, er, unguarded moments, that the brokers we spoke to desperately want traders to be successful.
The biggest problem the industry has is with people trying trading out, not experiencing immediate success and quitting. It costs a fortune for a broker to attract a retail trader to their platform, they would much rather hang on to the traders they have!
We didn’t see anyone promoting ‘churn’ as some may have expected – no-one there wanted their clients to deposit $500, lose it and move on. When they spoke about ‘retention’ they focused on finding ways to help traders make money.
The technology executives we spoke to are all creating additional features for their broking clients to help retail traders – not gimmicks, real features. We had the inside track on some cool new broker tech (sworn to secrecy I am afraid!) and the vast majority of it is designed to help us, the retail traders.
However it was also clear that the stats are true and:
3) Most traders do lose money
It is clear from speaking to both the brokers and the back end technology providers that the suspicions we all have about the rather high percentages of traders who never make money are well held.
But interestingly it also confirmed my personal suspicion that a lot of the people in the 90% or 95% statistic that you may have heard are people who start, lose a few hundred dollars and quit, never to trade again.
But, trading is a hard thing to master. If people are inclined to quit after one stab at it then that can’t be blamed on the broker, the industry or the nature of trading. My determination is to keep learning and getting trading experience and avoid becoming a statistic. Furthermore we also discovered:
4) Some retail traders are making a fortune
We heard some honest admissions that many traders were really struggling to turn a profit. But, encouragingly, there were numerous whispers and rumours about people on the opposite side of this coin – retail traders like you and me, who trade, win, and win big!
We don’t promote get-rich-quick schemes here on Two Blokes Trading, but when someone looks me in the eye and tells me that something is hard, that most people fail initially and then quit, but if you stick at it then the rewards can be great – well, then I am inclined to play the game!
Spending time around these brokers reaffirmed my belief that you need resilience to succeed in this game. Most traders are signing up, losing a bit, getting disheartened and quitting. But, sure enough, there are people making money and plenty of people making enough to live on. That’s the dream!
The last thing we learned?
5) Cyprus is amazing
Seriously, you should go there.