Forex Trading – The Downside of the Forex Trading Industry
Four years ago if you walked down the busy streets of Kuala Lumpur on a hot afternoon lunch break and asked strangers if they knew what forex trading was, you would’ve gotten blank stares. Only those in the banking sector and those that were investment savvy would know what you were talking about.
Fast forward to 2009 and i have found that a great number of people have at the very least a general inkling of what forex trading is. This is true for the city folk at least Kot4x. And we have the internet to thank for this. Since the advent of online forex trading, the currency markets have never been as accessible to the masses than it is today. This phenomena is not geo-located to a handful of countries but is affecting the entire world. People from Russia, China, Africa and even smaller countries such as Sri Lanka have started dabbling in the forex market via their computer.
And why not, with the increasing attention being paid to the forex market every year, forex brokers are all vying for a piece of the pie. This has brought up stiff competition among them and has brought the requirements for an online forex trading account to ridiculously low heights. So low in fact that a forex trading account from major forex brokers can be had for twenty bucks. Twenty American Dollars is about 68 Malaysian ringgit. 68 ringgit can’t even buy a nice steak dinner for two in this country. Simply put, forex accounts can be had for a song.
This in turn makes forex trading very accessible to anybody with some change to spare, a computer and a broadband connection. And wherever you find a business activity with great opportunity, you’ll invariably find the scammers as well. Never ones to be left out, they have crawled from what shadowy dens they reside in to prey on the few, the unlucky and the ignorant. And the question they seem to be asking everybody is this. How would you like to attend a 3 day course that will enable you to make a $1000 USD a day trading currencies?
Their venue of choice are hotels where they book expensive conference halls to give their sales pitch. Having been to at least 30 of these so called seminars, i can safely say that the vast majority didn’t know what they were talking about. They were just there to sell a product that was undoubtedly rehashed and repackaged. Distressingly, some of them never touched on a single aspect of forex trading, rather, they were sales people planting ideas of riches in the minds of listeners while skirting the topic of forex trading itself. They advertise their courses through the newspaper, the internet or simply via word of mouth. The price? Up to $6000 ringgit for a 3 month course.
$6000 ringgit is more than two months salary of the average Malaysian worker. Having come across a few old friends that have signed up for these courses, the education they received seems to be repackaged technical trading courses gained from the internet. The basic stuff, support and resistance, fibonacci lines, daily pivots. Most of which, can be learned for free if you dig around the internet. After touching on the basics of currency trading, they get to the meat of the course, the trading strategy. One course offered a 5 and 30 EMA crossover strategy. Yep, no joke. Buy if EMA 5 is crosses over 30 and sell if the opposite happens. This particular strategy works well in a trending market but the minute the market starts ranging, you’re in trouble. Choppy conditions will stop out most short term trades. $6000 ringgit for an EMA crossover strategy, unbelievable.