How a trader hiding in the shadows can ruin your trading

Today, I want to pick up with you, a ghost in the market, hidden, but incredibly curious group – the trader.

When it comes to traders, what is your first impression?

  • Money is bright, the Chosen One.
  • Highly skilled, always able to survive in the treacherous market and make a lot of money.
  • Or is it the man behind the curtain who takes traders’ money and helps black platforms do their dirty work, wielding a scythe to cut leeks?

In fact, although there are many legends about traders circulating in the market, not many people have really understood this mysterious group in depth.

Is the profession of trader really that attractive? Those runaway platforms, those endless scams, those real tragedies that happened around us, in the end and the trader has what relationship?

Today let us take a good pick.

The dark corners of the market

The definition of a trader in the industry is actually very simple: a group of people who have grown up from ordinary traders and who specialize in forex trading for their clients.

It is true that trader is not a simple profession, and the popular saying in the industry is.

The way to success of the trader, psychological quality and emotional management accounted for 80%, operating tools, viewing skills and operating strategies only accounted for 20%, enough calm and rational is the necessary quality of the trader.

Of course, in addition to psychological quality, want to become a qualified trader, but also to master the professional skills.

  • Have sufficient understanding of the market and be able to master the timing of opening and closing positions according to the requirements of the client.
  • Having their own complete set of trading systems and superb discipline.
  • being able to identify their own shortcomings and improve their operational skills from non-stop buying and selling.

……

In short, qualified traders should have superb qualities in all aspects from technical to psychological.

However, we can not because of this will be the trader on the altar, even if the great gods, there are rollover time.

Not to mention, the black platform bred, used to cut leeks of the group of “trader”.

The “rogue trader” in the annals of history

Let me start with an example that many people know-the legendary trader Alexis Stanford who lost 460 million US dollars.

Alexis, who was once a powerful man, decided that the financial system would eventually collapse when the financial crisis was not over in 2009. He was still working at Merrill Lynch at the time and decided to take the risk of embezzling client funds to make a series of big bets and close out his positions in a frenzy.

As we all know, the market did not collapse, the legendary trader lost more than $460 million after a big bet. After the incident, Alexis was sentenced to a 5-year ban from the trading market and was branded as a “rogue trader” by the media, which completely killed his career.

The famous senior trader will still have the day to miss, other skills are not yet so deep trader, the risk of rolling over can be seen.

EC Markets’ “textbook dumping” with agents

However, what traders hate the most is, in the end, the group of people who, under the banner of a trader, help black platforms to do illegal things.

This is by no means an alarmist statement.

In many cases in the past, many black platforms are precisely the selling point of having a senior trader to operate on your behalf, to solicit customers and eventually harvest leeks.

It is very common to find that after a problem arises, the platform and the trader dump each other and play the trader around.

Pick a typical example to tell you about – EC Markets and agent traders dumping each other.

In August 2020, EC Markets was exposed for maliciously widening spreads at 5am, causing countless clients’ locked hedge accounts to blow up.

A comprehensive analysis of the information collated after the fact gives a summary of several key points of this incident.

First, the platform initially used the lack of liquidity as a reason to appease customers, and even used the 30% bonus as bait to induce customers to deposit again.

Secondly, the bonus rule is actually not friendly to customers. According to the rules, a deposit of $10,000 can get a $3,000 bonus, but EC Markets requires customers to trade for 3 months continuously and trade 3,000 lots before they can withdraw their money.

Thirdly, during the time of publicity, EC Markets touted its trader to create a master persona. But after the accident, the trader became the target of the platform’s dumping.

On the last point, I have to say that EC Markets and its agents and traders have made a “textbook dump”.

First of all, EC Markets listed many arguments to justify itself and put all the blame on the agents and traders.

The accounts of the first batch of customers whose positions were exposed on the Internet were accounts operated on behalf of the trader, which were not under the direct control of the platform, and should have gone to the agent to which the trader belonged.

After the loss, the agent had asked the platform to restore the account or use a fake account hoodwinked customers, but was refused. In order to force the platform to comply, the agent discredited the latter.

EC Markets has repeatedly stressed that the platform has never launched the so-called bonus activities, let alone intentionally let customers burst their positions.

However: after EC Markets’ statement came out, the agent quit and gave a retort:


The bonus was introduced by EC Markets, the platform is using this means to incentivize agents to recruit customers.

After all the fuss, both sides seem to have reached a consensus after tearing their faces apart.

The trader is responsible for a large part of the blowout.

See, many traders see the omnipotent group of single masters, to this time only to be pushed out as the life of the backstop.

In addition to this typical case, there are many similar examples.

For example, in September 2020, not well-known foreign exchange platform Paul Sheng Finance was exposed to the fierce news, some users said that it was compelled by the platform trader, believe that the larger the position the stronger the ability to resist risk this set of nonsense, continued to enter the gold, and eventually 300,000 capital into the waste.
Another example is the long discredited American Lion Foreign Exchange in May 2020 was revealed to have used its traders to deliberately increase the number of customer trading lots, magnifying the risk of loss, and even forced customers to cancel their orders, give up the withdrawal, and ultimately eat the customer’s principal.

Or in April 2020, a trader reported being lured by Axitrader’s agent to deposit more than $20,000, all handed over to the agent’s trader to operate on their behalf. However, during the 1-year-long continuous trading, the trader lost all the client’s money, but also repeatedly lured the user to continue to deposit money on the grounds of single-locked orders, until serious losses and burst positions.

See this, everyone on the trader’s perfect fantasy is not completely shattered?

In fact, it is not.

Some traders may recognize the trader and agent, the platform behind the complex interests and choose to stay away, but there are more traders, can not resist the temptation, and even to the trader’s career full of aspirations.

A trap for the “Chosen One”

The reasoning behind this is well understood.

High pay, decency, good growth prospects and a high status in the industry make many young traders swoon over the career of a trader.

But what is important to know is that black platforms can do more than just cheat their clients. If you accidentally fall into the black platform’s trader recruitment scam, you could be reduced to being a harvested leek.

In 2018, after the implementation of ESMA’s new MiFID II regulation (this new regulation is very interesting, I will have time to talk to you in detail some other time), the major regulators tightened their restrictions and the entire retail forex industry entered a cooling off period, with many restrictions on the development of large platforms.

It is also at this time that some of the small platforms and black platforms that make a wave of quick money on withdrawal as a guideline, began to flourish. The demand for traders on black platforms also began to grow wildly at this stage.

According to a report by China Financial News in 2018, there were more than 6,000 job postings when searching for ” Trader Recruitment” in Beijing alone at that time, and more than 6.2 million job postings nationwide.

But how many of them are actually published by formal platforms?

In 2019, several media reported this sensational news: 9 people applied for the job of trader but were “cut leeks”, a total of 1.38 million cheated.

Looking through the interviews and reports at the time, we can clearly see how a group of highly intelligent intellectuals, step by step, were reduced to leeks to be cut.

According to the information revealed by one of the victims in an interview, he saw the job advertisement of this brokerage called WealthLink on the Internet, was attracted by the offer and development prospect, and eventually took the bait.

According to the platform’s promotion, it has an Australian investment background, a partnership with ANZ Bank, and is also regulated by CySEC in Cyprus, with a bright future for development.

However, after joining, the victims soon found out that the situation was not simple.

First of all, according to the platform’s requirements, in the initial stage are required to undergo 7 days of pre-employment unpaid training for various basic drills.

And at the later stage of the training, they are told that they need to take their own money (50,000 RMB) to do live trading and the platform will decide whether to transfer them based on their performance assessment.

Generally speaking, many people can see the problem when they get to the third step and pull out of the market. However, there are many people, with a desire for a high salary and a career as a trader, continue to go down a road to black and become a leek harvested by the black platform.

The test is not only the IQ, but also the sanity of the person, whether they can overcome greed, if they can recognize the scam in time and quickly escape the scene of victimization.

Summary

As mentioned at the beginning of the article, we really don’t need to deify the group of traders, their trading skills may be superior, but they are by no means perfect.

In fact, everyone is a beginner when they first enter the market and are starting from scratch. If you can find a very reliable trader, you can certainly get yourself a taste of profit from the start, but you will ultimately have to rely on yourself if you want to walk the path of good trading.

In short, to believe in their own abilities, efforts to build their own trading system, do not overly superstitious traders, we can become a truly qualified traders.

FCCM
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