I spent a few hours at the Traders Expo in NYC today, mostly to visit the exhibitors, catch up with some old friends and connect with a few potential business partners. While there was nothing ground shaking there, at least in my view, there were two big themes running through the vendors - foreign exchange trading for everyone and trader education. Some even were selling both!
Now, I'm not going to take this little sojourn into the Big Apple as a definitive sign but the proliferation of forex vendors, traders and brokers is getting into high gear. Is everyone trading their own account for 2 pip spreads? Is forex trading as liquid - and therefore lower risk - as many are suggesting? And how many forex bucket shops are popping up to fleece the ever-gullible public in the latest way to get rich?
Maybe I'll open up a forex hedge fund. Buy cash, sell futures and spread options on top of it all. Maybe I can find a subprime margin guy, too! Why not?
I'm wondering when the public's new fascination for forex trading and its mystique will blow up in their collective faces the way 'net stocks did eight years ago.
My message to unsuspecting newbie forex traders - there is no such thing as no-risk trading. You can control your risk but how many of us truly employ real risk controls such as optimal position sizing, seasonality and even time of day cycles? Sure, we use stops but is that enough?
And that brings me back to the education stuff. Many may be selling snake oil but it is better to seek out real training than to think you know what you are doing. Find a quality educational vendor and learn something before you buy or sell anything.
Oops, I ranted again! (sorry Britney)