This article was written by Joshua Dentrinos. He has been working in the forex market for over 10 years. Originally a corporate trader, he went on to lead two ASIC regulated brokerage firms in Australia and now runs his own boutique firm.
You’ve just got off the phone with a broker who has offered you both his legs, his newborn child and his future wife as a package deal, and now you’re overwhelmed. What do you choose? Which deposit bonus is best for you? Which additional piece of software with the ‘latest charting
tools’ will give you the holy grail of trading signals and make you rich?
Ignore all the hyped up marketing products and focus on increasing your wealth with a provider that makes you feel comfortable.
As a broker I can tell you, none of these things are designed to properly help you. As one product provider once told me: “Traders using our software increase their volume significantly.” Notice how the sentence didn’t include the words ‘make money’.
Like myself, new traders are excited to get involved in the market, but unfortunately, people like myself make it harder for them to dive right in and go the distance.
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As brokers/sales people we are trained to offer as many ‘value added’ products to a client as possible in order to increase the possibility of conversion. The funny thing is, the majority of these products are not going to assist a new trader in achieving anything but losses, confusion and a quick exit from our industry.
Unfortunately there is a giant conversion conflict of interest going on and the client is on the receiving end of deceit. As an industry we have designed products to offer to clients that do not assist the client in achieving profitability.
One example would be the notorious ‘non-withdrawable deposit bonus’. This is the most deceptive of all ‘value added products’, achieving less than the non heat-resistant rubber oven mittens that I accidently purchased from IKEA. It is offered or sold to the client as the best thing since sliced bread, but does absolutely nothing except slightly increase the risk of a trading account (via a few percent extra leverage). If a client accepts such a bonus it should be considered a violation of client knowledge regulatory requirements and I wouldn’t be surprised if the regulators eventually see it that way.
As a trader it is important to be mindful of what your long term goal is, and what you are trying to achieve by trading. In order to find the product that is best for you, you should consider the following:
- Have you got sufficient knowledge to handle the product being pitched to you?
- Do you even need the product?
- Is the person speaking to you offering you a helping hand with getting set up, or trying to get you to deposit as fast as possible (with value added products)?
- Does the person speaking to you have enough platform knowledge to support you should something go wrong? I have had sales team members who had never opened MT4 before, so this is an important one.
- Does the person talking to you have experience trading real money? Is he/she a trader or has he/she ever been a trader (even if they lost their money)?
- How much pressure do you feel when talking to the broker? If any, hang up the phone and move on.
Every company in the market is offering a similar thing. Ignore all the hyped up marketing products and focus on increasing your wealth with a provider that makes you feel comfortable. If you do the research, you will find the right fit.