PipStop

Who has lost their lunch trading? I’m sure if you did, you’d be the last to admit it.

Unfortunately I know many who have lost a lot of money trading Forex. Recently, I seem to have had more poor trading records shared with me than at any other time. So I decided to pull into my past records from a few years ago – a nameless, yet very real and sad record. It is the example of a very extreme case. And no this isn’t my own trading record, and yes it is a real account record of someone I know.

I share this as a very real case of what misguided expectations can mean for someone – especially one with a lot of money to trade. Manage your expectations. Outsized returns CANNOT be the norm in ANY market. When you begin to think you’re the exception, the following can happen to you.

Below is where an account was at the peak of its drawdown.

Below is where the account was a few days after the top snapshot was taken.

There is always activity here at TradingMetro. We generally view ourselves as a an upstart start-up. We have a great concept, which we need to do a BETTER job of conveying through the various parts of our website (namely the About Us) section – but I’d like to think that it’s because we’re so busy developing relationships and opportunity with others that I’ve been slow in changing how we describe what we do.

I need to carve time out and really explain, and probably record a video sharing the true vision of TradingMetro.

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That said, in the past couple of weeks, we’ve come to agreements with two established Forex educators.

ForexMentor is using the Adobe Connect Pro Powered by TradingMetro presentation platform to deliver its LiveConnect Trading Room service.

 

We are also on the verge of finalizing an agreement with YourTradingRoom.com – an a fast growing Australian-based company to process all credit card payments for all its North American distributors.

 

 

 

We will also on the verge of adding a daily Forex analysis newsletter service, as well as a few other Forex courses to our marketplace. Things are moving and we’re continuing to develop our technology and relationships with those in the industry.

I received a Facebook message from Richard Concepcion a trading friend of mine living on the East Coast, and I know many US-based retail traders are like Richard in being materially opposed to the following proposed regulation.

Regulators are saying this is in the BEST interests of traders, and traders are saying this is NOT in best interest of traders. One thing to be sure of is that changes by the NFA/CFTC to date has helped to push retail Forex business overseas. Not what America needs for its economy now – to be sure.

From a grassroots level, traders like Richard are vigorously spreading the word to traders to get involved and voice their concern and opposition.

What Richard sent is the following – thanks for this Richard, and I would encourage traders to educate themselves and make their voices heard one way or another in this debate.

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Sam – I’m sure you are already aware of this. I sent this email out to the Secretary of the CFTC urging them to reconsider the proposed reduction of leverage margin for forex from 100:1 to 10:1.
Lets get the word out to stop this nonsense!
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To: secretary@cftc.gov
RE: RIN 3038-AC61
Mr. Stawick (Secretary of the CFTC)

This email is regarding the above proposal, in particular, the overall reduction leverage on Retail Forex customers from 100:1 to 10:1 as stated on the section below from RIN 3038-AC61:

"The Proposal would also implement the $20 million minimum net capital standard established in the CRA for registering as an RFED or offering retail forex transactions as an FCM; propose an additional volume-based minimum capital threshold calculated on the amount an FCMor RFED owes as counterparty to retail forex transactions; and require RFEDs or FCMs engaging in retail forex transactions to collect security deposits in a minimum amount in order to prudentially limit the leverage available to their retail customers on such transactions at 10 to 1"

While we understand your concern in protecting the retail investor, investors in general are for the most part MORE PRAGMANTIC than what you, and the governing bodies, think. !!WE TRADE FOR A LIVING!! It is a craft painfully and rigorously honed for many years. You stifle this hard-earned skill by even hinting of such a regulation. It conjures up the worst scenario of taking away the retail forex business from the US, and moving it overseas.

You will only hurt what already is an economy struggling and sputtering … with no near-term relief in sight.

We appeal to your common-sense business savvy, and urge you to reconsider this proposal. We the retail investors CAN TAKE CARE OF OURSELVES, AND WE GO INTO THIS KNOWING FULLY WELL THE RISKS INVOLVED.
A copy of this email will be sent to our local Congressman and Senator.

Thank you for your time.

Your Name

Retail Investor

I come across many, many traders as I continue to be a part in building TradingMetro. Ryan O’Keefe is someone I’ve met on a couple of occasions, and I think he has a great, and unique approach to trading.

He focuses on helping people trade around a day job, and from a longer term perspective. I had a talk with him today and there is a possibility that TradingMetro may work with him in the future.

If that doesn’t end up materializing, I know I will do my best in helping him get his approach more widely known and recognized. He is one of the good guys in trading.

Also, when you have a chance, pre-order his book! It’s due out in April and is more than your run of the mill trading book overviewing indicators and such.

I want to say thank you to Pierre Charlebois for being the public face of the FX Weekly Report – it was a great 3 year run (time flies P!) where he was resolute in posting on a weekly basis.

It’s too bad for traders that Pierre will no longer be sharing his technical analysis insight, but he will keep trading, and I know he’s got many things on the burner.

Thanks again Pierre and we wish you nothing but the best in the future!

I posted a comment on a LinkedIn discussion today – a little random, but as a trader I see the motivations of the NFA and CFTC as … interesting. It’s no secret that US-based accounts have been fleeing for off-shore dealers, who are reaping the benefits of CFTC regulations. I guess in the CFTC’s mind, they’re absolving themselves of running a jurisdiction where people are losing their pants in the market. Which I suppose is a fair thought too.

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My comment on LinkedIn …

Totally out of left field thought, but this is what popped into my head as I read this …

If I want Fruit Loops and Wal-Mart has decided to no longer carry Fruit Loops, then I will go somewhere that does. I don’t care that I’m diabetic and it’s bad for me. I like it, it gets me going in the morning, and it’s my choice.

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How many of the US-based retail Forex dealers have or are creating off-shore entities? How many Forex dealers who are based outside the United States are thriving in their businesses without any US traders?

The shift has been happening the past several years and will continue, which is unfortunate. It doesn’t have to happen. The "robust customer protections" of which has been mentioned is really "inhibiting trader experience."

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Below is what this hub-ub is based on.

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CFTC Seeks Public Comment on Proposed Regulations Regarding Retail FOREX Transactions

Source: http://cftc.gov/newsroom/generalpressreleases/2010/pr5772-10.html

CFTC Seeks Public Comment on Proposed Regulations Regarding Retail FOREX Transactions
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the publication in the Federal Register of proposed regulations concerning off-exchange retail foreign currency transactions. The proposed rules follow the passage of the Food, Conservation, and Energy Act of 2008, Pub. L. No. 110-246, 122 Stat. 1651, 2189-2204 (2008), also known as the “Farm Bill,” which amended the Commodity Exchange Act in several significant ways. In particular, the Farm Bill:

• clarified the scope of the CFTC’s anti-fraud authority with respect to retail off-exchange foreign currency transactions;

• provided the CFTC with the authority to register entities wishing to serve as counterparties to retail forex transactions as well as those who solicit orders, exercise discretionary trading authority and operate pools with respect to retail off-exchange foreign currency transactions; and

• mandated minimum capital requirements for entities serving as counterparties to such transactions.

“These proposed rules for retail foreign exchange trading are important steps in implementing the additional consumer protections authorized in the 2008 Farm Bill,” CFTC Chairman Gary Gensler said. “The Commission looks forward to receiving and considering the public’s comments on this important issue.”

Pursuant to this authority, the Commission is proposing a comprehensive scheme that would put in place requirements for, among other things, registration, disclosure, recordkeeping, financial reporting, minimum capital, and other operational standards. Specifically, the proposed regulations would require the registration of counterparties offering retail foreign currency contracts as either futures commission merchants (FCMs) or retail foreign exchange dealers (RFEDs), a new category of registrant created by the Farm Bill. Persons who solicit orders, exercise discretionary trading authority and operate pools with respect to retail forex would also be required to register, either as introducing brokers, commodity trading advisors, commodity pool operators, or as associated persons of such entities. As was the case prior to the passage of the Farm Bill, “otherwise regulated” entities such as financial institutions and SEC-registered brokers or dealers remain able to serve as counterparties in such transactions under the oversight of their primary regulators.

The proposed regulations also include financial requirements designed to ensure the financial integrity of firms engaging in retail forex transactions and robust customer protections. For example, FCMs and RFEDs would be required to maintain net capital of $20 million plus 5% of the amount, if any, by which liabilities to retail forex customers exceed $10 million. Leverage in retail forex customer accounts would be subject to a 10-to-1 limitation. All retail forex counterparties and intermediaries would be required to distribute forex-specific risk disclosure statements to customers, and comply with comprehensive recordkeeping and reporting requirements.

Comments regarding the proposed regulations may be submitted by any of the means listed in the Federal Register release and should be received by the Commission within 60 days of the date of publication.

One of the core focuses of TradingMetro is customer happiness. We realize not everyone can be happy at all times, but there are particular steps that can be taken to ensure each and every customer is treated fairly with our own happiness zeal.

Joseph Jaffe has just released a great book, Flip the Funnel, with insight into flipping the traditional sales funnel. The lightbulb went off in my own head a couple of months ago

Sometimes we’re so mired in our own thoughts, developments, and evolution that we miss some obvious signs. Flipping the funnel as a term isn’t new. Seth Godin shared his thoughts on it in a series of free ebooks, but it’s always great to see and listen to various perspectives.

In our case, as TradingMetro seeks to partner with industry solutions providers, one of our recent focuses has been in encouraging providers to re-approach past purchasers of their products/services with new and improved tools they have. I call it the level of engagement. Past purchasers purchased for a reason. They saw good in the solution they bought.

There are a few different approaches that can be used. It isn’t always just about finding new folks to market to. That’s part of it to be sure, but flipping the funnel as Jaffe shares is far often overlooked.

I’ve always disdained the word “resolution.” Especially when it comes to New Year’s. What “resolution” that you’ve made in the past few years do you actually remember? I believe in goals, and in goal stacking. Set small achievable goals, and when those are fulfilled have other goals above it.

Sure it’s just a little difference in approach, but it works for me.

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As our team started TradingMetro earlier this year, it’s been a pretty interesting experience. We’ve managed to reach a certain point. We’re still in beta, but we’ve learned tons, and we feel good, if not overwhelmed at what we’re doing.

Self-directed online trading is growing – and our core concept in creating a marketplace of online trading solutions has evolved. We’ve realized that we can help those solutions providers by allowing them to leverage our infrastructure. Just as traders need tools that will help to assist in their trading, trading solutions providers (companies and individuals) need tools that will help assist in delivering a more streamlined service.

Solutions providers are always looking for more ways to SELL, but sometimes it’s necessary to take a step back and evaluate what and how they’re selling, and how they’re delivering it. The best solutions can get mired in a confusing process because a trading solutions provider is so busy trying to put out a product/service, figuring payment processing, juggling between presentation platforms, authenticating users into their service, answering support questions – in other words TOO much time is spent dealing with issues that can be best dealt with by folks like us .

Our general goals for 2010 are pretty straight forward.

1. Continue developing solutions provider partnerships

2. Create the most inclusive free resources section in online trading – we affectionately call this MetroSource

As the founder of TradingMetro my foremost goal – other than being the Chief Evangelist is to fundraise. Finding significant investing in TradingMetro will allow us to grow at a quicker pace and allow us to help more traders and trading solutions providers.

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I wish everyone a happy new year. The balance of life is always important and as always I encourage you to make a positive difference. Whatever your goals are, just as in trading, take things step-by-step – or in baby steps if you will.