CFTC and "Education sellers"

Telling someone how to trade is not the same as saying what to put your money on so why should they be regulated and in any case how would it be possible to do so ? What would be the measure of assessing the value of the material ?
 
I am referring to the "Snake oil sales " mass marketetd to people not to a proper UNi level course or a pure Fundamental / Tech analysis....
Why they should be regulated? because it is real money that unsuspecting members of the public might loose and it might affect their lives and life savings not just on "course fees" but then on risking in the market based on trading products without a through understanding
Why because what many of them are doing is no different than a regulated CTA or fund mangers
On the surface what you are saying seems logical however the problem is

- The way these courses are marketed by these so called "trading educators" many times these are slick too good to be true type pushy marketing
- Past hypothetical performance is used to market a dream
- Some times it might be a software taking automatic decisions similar to a CTA or CPO who "suggest a trade to it's clients based on what ever the strategy a CTA has
One simple question , If these educators are so good at trading why are they not making money trading! simple answer is they make more money by selling seminars than actual trading and risking money! Sure these legit but ethically !
 
You still need to answer how you would regulate them as any publication is just classed as "opinion" and most are quick to offer a disclaimer stating that what may have previously worked will not guarantee it does in the future.
 
I am no expert from industry or regulatory affairs, but as an example Australian ASIC could be a good guide ...

http://asic.gov.au/for-finance-professionals/afs-licensees/do-you-need-an-afs-licence/
http://asic.gov.au/about-asic/media-centre/asic-responds/exam-for-financial-advisers/

If a business model has anything to do closely with people investing in financial products in Australia that business needs regulatory oversight.. now you in US may see this as too much interference with private business! but as a consumer I would say this is better then nothing !
I am not saying that there are no crooks in the regulated professions , there are,, but having such a govt oversight reduces ( does not eliminate) chances of crooks getting in to this kind of business!
and deters business from making wild claims

have a look at this action by ASIC recently took action against a typical "Education seller" who had a AFSL the business model was exactly what i mentioned in previous posting , pressure sales of "Tiered Education in financial trading " with wild claims.. a typical seminar based delivery...a http://asic.gov.au/about-asic/media...ing-statements-and-bans-responsible-managers/
 
I have no interest in the possible ways that this could supposedly be regulated because I think it is pointless. As an example, you could have someone sell educational material that shows a system based on "Trend" trading that could show great historical results. You could also have someone else selling education on how to trade a "Range Bound" market again with success. The success of both relies entirely on how a market is at any given time. So if a market is trending then the first system will profit and if it is range bound the second one will profit.

Now if you trade using the trend based system in a range bound market you will lose money and if you trade using a range bound system in a trending market you will also lose money.

Both systems are equally valid but according to you there should be regulation on which one is right and which one is wrong which is impossible because both are right at different times.

This is why the idea of regulating educators is flawed because there is no "one size fits all" educational approach that can factor in all market conditions. There are also tens of thousands of systems and educators out there so how can any regulatory body assess them without a verified benchmark to assess against which to date does not exist ? Even if it did exist who would be considered credible enough to determine that benchmark ? The answer is no one.
 
This "unsuspecting public" thing gets to be tiresome. If there were no internet and no libraries, then one might conceivably advance the "unsuspecting public" argument. But there is an internet and there are libraries, so if one is unsuspecting, it's his own fault.

There is nothing wrong with materials that seek to educate neophytes in how the market is structured, how it "works". Materials that seek to tell neophytes what to do are an entirely different kettle of fish. But the vast majority of neophytes couldn't care less about how the market works; they are interested only in being told what MACD (or RSI or Sto or whatever) setting to use. And they will spend years trying to find out.

The "losing" (not "loosing") is a consequence of the neophyte's reluctance to assume responsibility for himself, nothing more.
 
Human nature has always been and always will be greedy. So long as there are people out there stupid enough to believe, against all warnings, that you can make a fast buck without any skill, knowledge, or common sense there will be people to take advantage of their stupidity and bank account.

It should not be the State's duty to nanny such people.
 
sminicooper said:
Human nature has always been and always will be greedy. So long as there are people out there stupid enough to believe, against all warnings, that you can make a fast buck without any skill, knowledge, or common sense there will be people to take advantage of their stupidity and bank account.

It should not be the State's duty to nanny such people.
Click to expand...


I agree with that however the USA has regulated markets so much that investors are not allowed to send money to firms in other countries for investment. Banks and credit card companies are forbidden to process such transactions.

Peter
 
1) "Being pointless", USA may think that way others like ASIC are trying to do something ...trying to keep away dodgy ones and trying to monitor the once who are in the "game" so it is not entirely pointless in other parts of the world! and CFTC is also trying to do something... is that all pointless?
2) There is nothing wrong with materials that seek to educate neophytes in how the market is structured, how it "works". Materials that seek to tell neophytes what to do are an entirely different kettle of fish. YES aptly described
It is "That kettle of fish" I am talking about..the boiler room scams and inflated claims not the first one
2) If we use the theory of "It should not be the State's duty to nanny such people." does that mean even financial markets should not be regulated? let dog eat dog let $2 company start an "Trading exchange" in USA.. after all why not "state should not interfere" lets throw out all that comes with some "regulatory oversight" becasue it sounds like Left wing BS!
Yes there should be a"Free market" but not that "free" that it creates mayhem that is what I was trying to say
Lets respectfully agree to disagree I think it is an ideological war of words!
 
CFTC is also trying to do something... is that all pointless?
Click to expand...

Yes because it simply wont work and will be unenforceabble in my view but do let us know how you think it can be enforced across international boundaries with thousands of cases ?
 
I wouldn't recommend any training for new traders, just hours and hours of research and practice. But if they want to try a short-cut and get the knowledge in one purchase that someone else has collated for them, why should anyone else be concerned? They're not just paying for the knowledge, they're also re-imbursing the costs of collecting it, and the price is an entirely private matter. Chaps, we either believe in capitalism or we don't.
 
SO becasue it won;t work according to you it should not be done at all! and let dogs let loose..wow by the way within a country it should not be impossible , The entry criteria itself should be high Just like ASIC is doing if ASIC had no regulations on this in Australia in this country there would be thousands of unlicensed / un registered "Education sellers " promising dreams.. the argument that
Tomorton, your logic makes sense but what I am talking about is the "Dodgy sales people / company who purposely market this as get reach quick schemes...and HIDING behind the excuse "we are only selling training" I am sure all of you know what kind I am talking about ...believing in capitalism does not mean it has to be the "wild west type" there can be a balance !
 
So you have still not answered how it can be done ? Who would set the benchmarks ? Who is even in a position to decide who is reputable or otherwise ? In the UK we do have the ASA which means that if a product can be shown not to be as advertsised then prosecutions can follow. The biggest single issue with trading is that there is no "right" way to do it and as such there cannot be a benchmark to measure against for most of the educational sellers. If something is an outright scam then there are already ways in which you can recover your funds if it is a UK company operating in the UK and if not then what else can possibly be done ?
 
There is a balance. The UK like most of the west (the real west, not the wild west) has an advertising standards authority and companies that use lies to generate business face criminal proceedings.

As traders, we might think trader training is poor value, but companies that comply with relevant laws should be allowed to make a profit.
 
You must log in or register to reply here.

Similar threads

M
CFTC’s Action Against Unregistered Binary Option Platforms
2
Replies
37
Views
11K
moka2
M
M
How Forex brokers gamble with your money: The CFTC wants YOU to comment on new requir
Replies
5
Views
1K
Hotch
Hotch
C
refcofx
Replies
3
Views
2K
BBB
B
C
refcofx.com
Replies
0
Views
3K
cecja
C
B
FXCM vs. CFTC
Replies
0
Views
2K
bigpippin77
B
Top