A New Low?

[counter_violent]

peebee

Yes, there's probably a lot in that. The whole industry seems to have run amok in line with much that we're learning about what's been going on in the financial sector generally. I never think fines do much good - they're generally making too much money to be bothered by that. Shut 'em down and disqualify the directors etc might be more of deterrent to others.

Yes and it's only times like this where they all come under scrutiny and become exposed.
It's rather convenient for Govt at the moment to have a bigger scapegoat in the frame...but Govt will get what's coming to them too eventually.

 

[the hare]

This blog post by Michael Stumm CEO of the retail forex brokerage Oanda sums up this fiasco perfectly.


Forex traders, beware the Introducing Broker

It is common among forex brokers to rely on introducing brokers, or IBs, to acquire new clients. OANDA does not. Even though it costs us business. Here’s why:

Most IBs are marketing experts, not market experts. They don’t really understand the forex market in depth and the vast majority do not act in a trader’s best interest. IBs attract customers—preferably people with little experience in trading forex—and do one of two things: They either sell that customer contact information to a forex broker without the person’s knowledge or consent, or they subtly push customers towards a specific broker, often through a white label arrangement. It almost goes without saying that IBs bring customers to the broker that pays them the most.

Most often, the IB gets a portion of the broker’s spread on any trades executed by referral clients. Typically, this compensation arrangement is not disclosed to the clients. Worse, the broker usually marks up the spread by the amount they are obligated to pay the IB. The customer ends up paying a higher spread because they lack a full understanding of their broker’s business model. In fact, often the customer doesn’t even know that their relationship with their broker is saddled by a side arrangement with an IB.

We believe this is highly unethical. Hence, OANDA does not use IBs or other referred agents in any way.

Raising the red flag on IBs

IBs today are a holdover from the pre-internet era, before the widespread accessibility of information opened up trading to the masses. The IBs of the past played an important and legitimate role. They advised their customers and helped clients navigate the complexities of the forex market. They considered a customer’s trading needs and then recommended a forex dealer that would provide the most benefit based on those needs. Or they provided market insight and helped the customer make the “right” trading decisions. Or they helped them fine-tune a trading strategy. IBs were clearly on the side of the customer and they added value. In return, they were paid for their services.


But that was in the past. Consider today, when one forex broker says on its website in an attempt to recruit IBs:


Whether you have many personal networks, a high traffic website or are a good online marketer we can work with you to develop a program and remuneration scheme to suit your strengths.

Note there is no mention of the need for expertise in the forex markets.

Another broker web site stresses that becoming an IB is a way to make money in the forex market for those who cannot make money by trading. Imagine the value-add such an IB would provide to clients!

Being an IB has degenerated into a way to make easy money. So much so that the IB landscape has become crowded. This has led to even more perversion. Some IBs offer rebates to the customer from the money they earn from the dealer. In essence they are "paying" back a portion of the money the customer unwittingly paid to the dealer for the IB's "services".

Hopefully that goes some way to explaining to Tim, Jon, and Paul and the other t2w apologists why people who trade for a living feel so strongly about these issues. Thankfully t2w has dropped the hypocritical and cynical suggestion that they are exist to help traders, and they are a little more open and transparent about their business model, and I applaud them for it.

 

[the hare]

I guess the majority of t2w readers probably wont understand why someone should get upset about a small increase in spread due to IB fees. Sites such as this promote the illusion that successful traders consistently make hundreds or thousands of pips per month. This illusion is promoted by allowing (and even at times encouraging) posts from walter mitty type fantasists and vendors. The fantasy is promoted in advertising and official partnership offers etc.

However, the reality for most successful traders that I've met at least is very different. Very significant returns are achievable from relatively small gains, and the margin between profit and loss isn't as great as you might think. The spread is a MASSIVE barrier to profitable trading. In many cases its the spread alone (combined with leverage) that decimates accounts, and its a very significant edge for the broker. Anything that increases that edge, such as an IB fee, definately isn't in the interest of a trader.

I'm not singling out t2w for criticism, if they disappeared tomorrow the problem is so widespread it would still exist. I wont deny that t2w can be a useful resource, and I've benefited from membership over the years, but the amount of good provided by sites such as t2w can never offset the damage that these businesses cause due to their participation in IB schemes.

That is reality. Over to you Tim to defend the indefensible

 

[pboyles]

This blog post by Michael Stumm CEO of the retail forex brokerage Oanda sums up this fiasco perfectly.


Forex traders, beware the Introducing Broker

It is common among forex brokers to rely on introducing brokers, or IBs, to acquire new clients. OANDA does not. Even though it costs us business. Here’s why:

Most IBs are marketing experts, not market experts. They don’t really understand the forex market in depth and the vast majority do not act in a trader’s best interest. IBs attract customers—preferably people with little experience in trading forex—and do one of two things: They either sell that customer contact information to a forex broker without the person’s knowledge or consent, or they subtly push customers towards a specific broker, often through a white label arrangement. It almost goes without saying that IBs bring customers to the broker that pays them the most.

Most often, the IB gets a portion of the broker’s spread on any trades executed by referral clients. Typically, this compensation arrangement is not disclosed to the clients. Worse, the broker usually marks up the spread by the amount they are obligated to pay the IB. The customer ends up paying a higher spread because they lack a full understanding of their broker’s business model. In fact, often the customer doesn’t even know that their relationship with their broker is saddled by a side arrangement with an IB.

We believe this is highly unethical. Hence, OANDA does not use IBs or other referred agents in any way.

Raising the red flag on IBs

IBs today are a holdover from the pre-internet era, before the widespread accessibility of information opened up trading to the masses. The IBs of the past played an important and legitimate role. They advised their customers and helped clients navigate the complexities of the forex market. They considered a customer’s trading needs and then recommended a forex dealer that would provide the most benefit based on those needs. Or they provided market insight and helped the customer make the “right” trading decisions. Or they helped them fine-tune a trading strategy. IBs were clearly on the side of the customer and they added value. In return, they were paid for their services.


But that was in the past. Consider today, when one forex broker says on its website in an attempt to recruit IBs:


Whether you have many personal networks, a high traffic website or are a good online marketer we can work with you to develop a program and remuneration scheme to suit your strengths.

Note there is no mention of the need for expertise in the forex markets.

Another broker web site stresses that becoming an IB is a way to make money in the forex market for those who cannot make money by trading. Imagine the value-add such an IB would provide to clients!

Being an IB has degenerated into a way to make easy money. So much so that the IB landscape has become crowded. This has led to even more perversion. Some IBs offer rebates to the customer from the money they earn from the dealer. In essence they are "paying" back a portion of the money the customer unwittingly paid to the dealer for the IB's "services".

Hopefully that goes some way to explaining to Tim, Jon, and Paul and the other t2w apologists why people who trade for a living feel so strongly about these issues. Thankfully t2w has dropped the hypocritical and cynical suggestion that they are exist to help traders, and they are a little more open and transparent about their business model, and I applaud them for it.

Well I think I might have found another mistake. According to this Forex Rebates | Trade2Win
the more you trade the more you can 'make' in rebates, in fact they are called 'earnings' which is a rather strange way to describe them giving you some of your own money back.

Where's that damned outsourced inexperienced staff member? He need's another good beasting for this. And how did the idiot pick two companies that are being fined for ripping off their clients? You cant trust anybody nowadays, its so hard to get good staff.

 

[the hare]

And how did the idiot pick two companies that are being fined for ripping off their clients?

In fairness to whoever took that decision, whoever they picked could probably be accused of doing exactly the same thing

its just these two happened to get caught.

There are companies worse than t2w (or better at marketing) Yesterday for example I received an email from a certain IB discussing the appalling events at PFG Best. This particular ******* took the moral high ground, and the majority of his email was taken up with slagging off regulators, and commiserating with the victims.

Then comes the sales pitch, how happy he his with his futures broker, how safe his funds are, and what a great deal his broker could offer me, along with the inevitable link with affiliate ID.

These people really are scum

 

[pboyles]

In fairness to whoever took that decision, whoever they picked could probably be accused of doing exactly the same thing

its just these two happened to get caught.

There are companies worse than t2w (or better at marketing) Yesterday for example I received an email from a certain IB discussing the appalling events at PFG Best. This particular ******* took the moral high ground, and the majority of his email was taken up with slagging off regulators, and commiserating with the victims.

Then comes the sales pitch, how happy he his with his futures broker, how safe his funds are, and what a great deal his broker could offer me, along with the inevitable link with affiliate ID.

These people really are scum

I just got the same thing from Rosenthal Collins Group.

 

[timsk]

Hi the hare,

. . . That is reality. Over to you Tim to defend the indefensible

To be fair - you make a lot of very valid points about the industry as a whole and I have no wish or interest in defending the indefensible. For the most part, where you and I disagree is in T2W's role in all of this. You're inclined to paint us as being blacker than black and, possibly, I'm guilty of painting us as being virginal white. In reality, we're somewhere in between, heavily biased towards the white end of the spectrum, obviously. As soon as the scales are tipped the other way - I'll be gone, and I imagine a good many others on this side of the fence will be too. However, because of what I know about how T2W operates and the personalities involved, I know (please sit down before reading on because this may cause some laughter) . . . that T2W is a force for good! After all, your last post is there for all the membership to read, evaluate and then decide what's right for them. And that's the problem you have. There are loads and loads of threads and posts by you, peebee and Co, warning newbies about how everyone is out to rip them off - including T2W. If we were as black as you'd have everyone believe - then you and your posts would have been extinguished from the site long ago.

So, the bottom line is that we live in an imperfect world where bad people do bad things. Sometimes T2W gets it wrong (no one's perfect) which allows bad things to happen. The recent partner mailing fiasco is a case in point and I jion Trader333 and Sharky in apologising for it unreservedly. But, and this is the key point, mistakes are different from intent. It wasn't a deliberate ploy on our part. T2W is run and managed by good people who have the best interests of the members at heart. I'd even go so far as to suggest that you believe that too but, fear not, I know you wouldn't ever admit to it publicly. However, that matters not, as I believe it's what the bulk of the membership believe too and they want T2W to pull through the current malaise that it's in. I'm confident it will do just that because changes are afoot as Sharky has indicated in his post on the other thread. When that happens, T2W will be a beacon in the industry, a place where traders of all types and experience can come, safe in the knowledge that the information and support is of the highest calibre, enabling them to cut a path through the trading jungle without losing their shirts. If you, peebee and Co are genuinely intent on righting wrongs and protecting newbies, then you'll work with us rather than against us and help us achieve these objectives to make T2W a better place for everyone.
Tim.

 

[the hare]

Its worth pointing out, that this is the stuff they are happily promoting in public, go behind the scenes and its a whole new level of skullduggery

 

[pboyles]

If you, peebee and Co are genuinely intent on righting wrongs and protecting newbies, then you'll work with us rather than against us and help us achieve these objectives to make T2W a better place for everyone.
Tim.

I've already offered to vet all future partner offers for you, it will save any outsourced inexperienced staff getting into bother.

I could also check if any of your other current or future rebate or other partners are the subject of heavy fines or ongoing investigations for fraud etc.

Dont worry, its about 2 minutes work a day.

 

[timsk]

I've already offered to vet all future partner offers for you, it will save any outsourced inexperienced staff getting into bother.

I could also check if any of your other current or future rebate or other partners are the subject of heavy fines or ongoing investigations for fraud etc.

Dont worry, its about 2 minutes work a day.

Hi peebee,
A generous offer, thank you. I'll make sure everyone in admin is aware of it.

Tim.

 

[barjon]

..................When that happens, T2W will be a beacon in the industry, a place where traders of all types and experience can come, safe in the knowledge that the information and support is of the highest calibre, enabling them to cut a path through the trading jungle without losing their shirts..........

Blimey, Tim, even I don't go that far (although wouldn't it ne nice).

To keep the training analogy with hare going - I'm looking for T1, not a 10year new high

 

[pboyles]

Blimey, Tim, even I don't go that far (although wouldn't it ne nice).

To keep the training analogy with hare going - I'm looking for T1, not a 10year new high

There's an advert on CNN International for the 'most trusted bank in Nigeria'. Is that the sort of target you had in mind?

 

[scose-no-doubt]

Sorry Timsk but I can't take that post seriously at all. You state that Boyles and co are working against trade2win but the reality is that trade2wins aims are at odds with what's best for just about every stakeholder other than advertisers and the other assortment of dodgy companies that profit from newbs, gamblers and uneducated types that are ignorant to how this industry works. To me, what you're doing imho, however unintentional, is glossing over a series of separate events that indicate a pattern of behaviour and whitewashing them all under this blanket of partner email and then subsequent apology. Furthermore, you're referring to people who have issues in a manner that reflects on them as though they are disgruntled or out to cause trouble. This is something that's been done over and over again by t2w representatives and it's a bit ridiculous to keep it up now "Teh Junior" has led to t2w being caught with their trousers down. The same can be said of the stupid lot who had 'conspiracy theories' of forum plants... What's trouble for t2w isn't necessarily trouble to others especially when you consider the quantity and frequency of trade2wins "mistakes".

 

[the hare]

the reality is that trade2wins aims are at odds with what's best for just about every stakeholder other than advertisers and the other assortment of dodgy companies that profit from newbs, gamblers and uneducated types that are ignorant to how this industry works.

Nail hit very squarely on head... That's the truth, and it doesn't matter how nice or well meaning the people are who are managing this business.

 

[timsk]

Nail hit very squarely on head... That's the truth, and it doesn't matter how nice or well meaning the people are who are managing this business.

Ah well, the 'truth' is a funny thing. That might be your truth and s-n-d's truth, but it sure as hell ain't mine! One man's truth is another man's lie.

 

[scose-no-doubt]

Ah well, the 'truth' is a funny thing. That might be your truth and s-n-d's truth, but it sure as hell ain't mine! One man's truth is another man's lie.

Not really. You seem to be enjoying your new politicking role a bit. Truth is not a matter of opinion and can be established by simply observing the facts as they stand.

1) Poor quality control in relation to forum content: Allowing trolls, would-be scammers, charlatans and others to flourish, allowing newbs to posts stuff that already been covered and answered by the older crowd of people arguably better in the know
2) Promoting of dodgy companies
3) Promoting of dodgy vendors
4) Advertising firms that carry out unscrupulous practices
5) Denial that there are forum plants
6) Promotion of own rebate services
7) FX desk platform and trading competition
8) Sale of trading paraphernalia containing input from people of questionable character and credentials

Are these not the direct resultant/outcome of trade2wins aims?

How is any of this carried out in the interests of newbs, gamblers and uneducated types that are ignorant to how this industry works?

How is wanting the above to stop working against trade2win?

I pose that this is the objective truth and your truth is something else completely. The worrying thing is that trade2win has yet to enlighten us mere mortals as to what it wishes to accomplish despite the gaping chasm that has appeared in terms of members perceptions and the supposed aims of the organisation. And let's not be so patronising as to suggest that it's just me and hare who feel this way. I can start a poll if you like. Or better yet why don't you consult members and start one.

Personally, I think that if it weren't for PBoyles, this place would, by now, be one of the unethical companies that are complained about on these very boards. That's not truth though obviously as that's my opinion.

 

[barjon]

Not really. You seem to be enjoying your new politicking role a bit. Truth is not a matter of opinion and can be established by simply observing the facts as they stand.

1) Poor quality control in relation to forum content: Allowing trolls, would-be scammers, charlatans and others to flourish, allowing newbs to posts stuff that already been covered and answered by the older crowd of people arguably better in the know
2) Promoting of dodgy companies
3) Promoting of dodgy vendors
4) Advertising firms that carry out unscrupulous practices
5) Denial that there are forum plants
6) Promotion of own rebate services
7) FX desk platform and trading competition
8) Sale of trading paraphernalia containing input from people of questionable character and credentials

Are these not the direct resultant/outcome of trade2wins aims?

How is any of this carried out in the interests of newbs, gamblers and uneducated types that are ignorant to how this industry works?

How is wanting the above to stop working against trade2win?

I pose that this is the objective truth and your truth is something else completely. The worrying thing is that trade2win has yet to enlighten us mere mortals as to what it wishes to accomplish despite the gaping chasm that has appeared in terms of members perceptions and the supposed aims of the organisation. And let's not be so patronising as to suggest that it's just me and hare who feel this way. I can start a poll if you like. Or better yet why don't you consult members and start one.

Personally, I think that if it weren't for PBoyles, this place would, by now, be one of the unethical companies that are complained about on these very boards. That's not truth though obviously as that's my opinion.

Quite a lot of opinion and wise-after-the-event facts there, scose

When you question "How is any of this carried out in the interests of newbs, gamblers and uneducated types that are ignorant to how this industry works?" I suppose you discount all the threads, T2W advice, etc that's there showing how the industry works and hopefully at least lessening the ignorance of the readers. So surely there's some balance to be seen and not a blanket everything is bad?

Remember that T2W is a free site. How do members expect it be paid for if not by advertising revenue? It is also a business so needs to derive income for that reason, too.

It seems to me that advertising etc is acceptable, although it's fair enough that members would expect that to be within reason, honest and conducted with some integrity. Sure, T2W has dropped clangers here and there - mostly, but not exclusively, exposed with the benefit of hindsight - but it's aims can't be to rip off members. After all, if for no other reason, it makes business sense not to do so since without members T2W is nothing.

You might argue than you can never marry business interests with members interests at all and that divorce is inevitable. I happen to think that you can find a balance that is acceptable to both sides, although I agree that the balance has become a bit out of kilter and needs looking at.

 

[timsk]

Brilliantly put Jon - saved me having to write something twice as long and half as good!
Thanks,
Tim.

 

[rsh01]

Don't you think its got something to do with the general increase in scepticism about the entire industry? It wasn't so long ago that you couldn't mention slippage problems without 3 or 4 people jumping down your throat saying 'don't blame the broker for your losses'.

Now we have found out that many brokers were doing exactly what the sceptics accused them of, manipulating slippage in their favour. Add in a few cases like MF Global and people are actually starting to see that there is massive corruption and fraud throughout the industry. .

Perhaps add in a few hundred more million becoming unemployed across the globe, and the gap between rich and poor widening, which will in turn lead to more desparation and vulnerable people falling for this crap. Its like the lottery (another tax on poor) all over again, but this time 0 profits are redistributed to those who need it.

 

[R.Charnock]

Where do we all go if we leave T2Loose, though? Whatz the alternative?