Trading For The Masses

Many have the impression that retail forex trading is somehow fraudulent because it seems too good to be true. In reality, it is, and it isn’t.

Let Me Explain

The exchange of foreign currency is as old as 500 years since its first emergence in Amsterdam. As technology evolved and electronic platforms rose, regulators took a strong grip on the marketplace, overseeing almost every transaction. Due to this, transaction costs were too high for the average person to trade. Transactions were performed by large institutions where the cost of the trade was offset by the profit per trade.

Enter the Commodity Futures Modernization Act (CFMA). This act allowed for a few changes, the difference between a commodity & security, reduced monitoring for online/nonphysical exchanges and lastly, regulators still had the ability to enforce laws that prohibit price manipulation. (Chen, 2018)

What this means for us as retail traders is that we can trade these securities online with reduced regulation (and therefore reduced cost) but still have the benefit price being a relatively true reflection of the market (with some charges to cover the broker of course).

Speaking of brokers, brokers opened the market to retail forex traders by providing margin or leverage (depending on how you want to define it). In either case, it allows traders like you and me to place trades of much higher value than our actual deposit and in doing so, reap profits (or losses) that we would not usually have access to unless we had the full capital amount.

To summarize, the internet and the CFMA allowed what was once reserved for institutions, to be accessible to you and me from the comfort of our own homes.

We have waited 500+ years to get to this point, take full advantage of the opportunity in front of you.

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Regards

Darren Campher

Founder DC Consulting