There is only one forex trad­ing se­cret

The Tribune (NZ) - - BACKYARD BANTER -

They are sil­ver­tongued masters of per­sua­sion, and there’s an ap­petite for their wares among the hope­ful, the gullible and the greedy.

GOLDEN RULES

❚ Forex trad­ing is very, very risky. ❚ Sales­men make money sell­ing to you, not by trad­ing forex. ❚ If it sounds to good to be true, it al­most cer­tainly is.

se­cret al­go­rithms telling them when to buy and sell for­eign cur­ren­cies at a profit.

One for­mer forex sales­man told me over a cup of tea re­cently that the only prof­its in forex trad­ing ‘‘education’’ and soft­ware were for the sales­men.

When I asked what pro­por­tion of the clients made money over their trad­ing ca­reers, he lifted a hand and made a zero sign with his in­dex fin­ger and thumb.

I quite be­lieved him, even though I gave less cre­dence to his claim that he had left his wal­let at home, so could I pay for the tea?

We live in a coun­try where the prime min­is­ter made his liv­ing out of deal­ing in for­eign ex­change.

There’s a splen­did Youtube clip of ‘‘un­canny’’ Key’s early years in the busi­ness.

Clearly then, peo­ple can trade in forex suc­cess­fully, but the young Mr Key, as far as I can see, was trad­ing with ‘‘other peo­ple’s money’’. Nei­ther was he an am­a­teur trad­ing on alerts gen­er­ated by se­cret al­go­rithms he’d paid a few grand to get.

As long as I have been a money writer there have been sales­men cold-call­ing peo­ple at home and work to sell them forex trad­ing train­ing and soft­ware.

They are sil­ver-tongued masters of per­sua­sion, and there’s an ap­petite for their wares among the hope­ful, the gullible and the greedy.

But given the very high risk of their clients turn­ing their nest eggs into much smaller nest eggs, it’s crazy the whole busi­ness hasn’t been prop­erly reg­u­lated.

I’d change the law to force the ‘‘ed­u­ca­tors’’ to get li­cences to sell their wares to New Zealand-based clients be­cause their cus­tomers clearly be­lieve they are buy­ing a fi­nan­cial ser­vice.

Like fi­nan­cial ad­vis­ers and fund man­agers, let the ‘‘ed­u­ca­tors’’ re­veal their qual­i­fi­ca­tions as ed­u­ca­tors to the Fi­nan­cial Mar­kets Au­thor­ity (FMA).

Let them have their crim­i­nal records ex­am­ined, and the ba­sis of their alert sys­tems scru­ti­nised. They could pro­vide theFMA with the au­dited re­sults of their pupils’ trad­ing.

And, if they can’t do those things, they should sell some­thing else, like kitchens, or used cars.

PHOTO: 123RF

Want to be shocked? Google ‘‘Fi­nan­cial Mar­kets Au­thor­ity’’ and ‘‘Forex’’ and see the dire risk warn­ings that come up.

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