Inside the Currency Market: Scumbucket World of FX Retail Trading

It appears a time once existed somewhere in the 2005 / 2006 vicinity when computers married Retail currency trading. Then came the rise of the Kathy Lien types with their impressive resumes, industry experience and books. These Kathy Lien types filled either a massive massive void in trading tactics to earn money or they were at the forefront of a massive massive movement that would bring in multitudes of millions of ordinary people hoping to earn money. Let’s face it, in the 1990’s academic journals, the focus was still on the deep intricacies, the deep understanding how to view, trade and understand currencies and trading. Carry trade topics in many forms, economics, Forward Points, interest differentials as well as arcane topics Vs today such as USD Premiums and Discounts to GBP were studied and discussed in finer detail. Even FXstreet in the 1990’s published terrific, vital and actionable trading information that dovetailed the academics. The journal of Technical Analysis was full of strategies, math formulas and actionable trading information. Anybody with half a brain, energy and a few dollars could easily jump into the game of currency trading and earn boatloads of money. But they were equipped with full understanding and knew exactly what they were doing. What happened. The Kathy Lien types actually poisoned the system for the massive multitudes present and future because the focus changed from understanding first then jump into the game to money first, forget understanding.

The Kathy Lien types became the gods and goddesses of the industry because they brought in the multitudes. They dovetailed the concepts to bring in the multitudes with introduction of tactics such as double Bollinger Bands, RSI, Slow Stochs and the rest. FXCM and other currency brokers would literally bend over backwards to ensure accounts of the multitudes were established. The formal transition from understanding to money first was sealed. One word from these types to buy or sell and the multitudes gladly jumped. Profits of the currency brokers must have soared. Fxstreet changed then as well from a professional site to a site for the multitudes. The Journal of Technical Analysis even transitioned to money first concepts. Soon the entire world was money first, understanding gone.

The last holdouts in the money first transition was banks and hedge funds. They still focused on solid and actionable research and math formulas. They were the gods to the previous professionals with understanding as the source of information. But bank research reports were hard to obtain so very few had their information. One had to be a client, know somebody or forget about ever seeing their data and information. What a bonus situation to the Kathy Lien types as they were allowed to reign supreme over the multitudes. But even the banks succumbed to the pressure of the massive multitudes so they decided they must compete for accounts. So then banks joined the game of money first and indicators as the source of new accounts. Now the Kathy Lien types had formal competition for the first time in years. But as banks focused on publishing trades for the multitudes, the quality of their research took a severe nosedive.

The multitudes realized they too could participate in the money first game because they found the Kathy Lien types were failures at both trading and understanding despite impressive resumes, books. They realized banks weren’t exactly thrilling either as they posted hit or miss trades, maybe profits, maybe losses. The masses became disillusioned because the money first game wasn’t materializing for them. So multitudes armed with a few dollars constructed their own websites and a money first strategy. The search was on for a concept, strategy, anything. All that counted was the strategy worked sometimes and the websites could attract the lost multitudes roaming the universe in search of quick money trades. Now we have the 1 second chart, the 5 minute and the most popular 4 hour. The next guy found a pattern. The next guy found a Fib but yet can’t calculate a Square Root. The biggest websites like Fx street counterattacked by constructing trading rooms so the multitudes could hang out together and trade with hopes somebody knew what they were doing to insure the masses would earn money. But then the lead trader concept was forgotten when tons of advertising revenue streamed in by the bushels. When the big websites remained an open forum with no care who earns, who loses, who comes, who goes then the multitudes with a new found concept decided to open a trading room. After all match concept with Advertising revenue, who could lose. Currency trading schools then popped up with hopes to rape on the pockets of the multitudes with promise of big money.

Today, the multitudes are still roaming the universe looking for whatever it is they won’t find. The concept of knowledge first, money follows is still long gone. Kathy Lien is where she belongs from the start, irrelevant. The few sites that still exist made tons of money and became extraordinarily slack. Why learn and grow to have understanding when the money flows in by the bushels in Ad Revenues, selling of whatever else. Many strategies by the new comers turned out to be colossal failures. Many websites resorted to market reporters while they tout themselves as analysts with impressive resumes. The famous named currency analysts from the 2005 period turned out to be a cabal and are used and abused by anybody who can get them to speak, write, offer a webinar. Traffic to the website is the name of the game, not to advance pertinent knowledge.

A few examples. A guy on twitter touts 47,000 views. What is he selling I wondered. Pivot Points. daily monthly whatever pivot points. Forex live despite impressive resumes report after the fact information and trades that are possibilities. I’m watching this, possible that, 200 hour. Baby pips Gump reports Sunday night Asia was pricing in Friday NFP. Think about that statement. How does the market price in NFP Sunday when the release occurred Friday. How much is the release worth to price in. What is the EUR/USD price on Sunday night Asia trading for Friday NFP. What was the EUR/USD price for Friday’s actual release. Fxstreet still has the same tired faces doing the same tired things day in and day out. We lack originality in concepts, Information, analysis. Even the banks engage in the same tired concepts and much is irrelevvant. The same old losing trades are posted day in and day out, fundamental analysis is all dead wrong and proves just as in trading, knowledge means nothing because nobody does homework first, report second. The insiders became tired and are no longer hungry. They are comfortable with their tired concepts that’s not worth a dam. The sad fact is none that became famous, wealthy or both have a clue about a currency pair so how can they help the multitudes. So the multitudes, well, just as the start, its the same. The smart guys would stay away from the public and treat the insiders for what they are, irrelevant.

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