PipStop

It’s been a busy holiday season – the busiest I think I’ve ever had with my young family.

One thing is for sure – Christmas is now all about the kids. It definitely is not about the grownups and I like it like that just fine.

Just a quick note with New Years fast approaching. It happened under the radar a couple of weeks ago, but Trading Post Brokerage Services, in addition to being registered with the National Futures Association as an Introducing Broker is now registered as a Commodity Trading Advisor.

This isn’t new news, I wanted to see how things would progress, but starting a couple of weeks ago a few of the Internet message boards were abuzz with swiss broker Crown Forex being under investigation.

Of course anonymous posters on Internet boards levelling accusations is always sketchy. But Francesc Riverola, CEO of FXstreet posted a notice that the Swiss Federal Banking Commission is conducting a special investigation into Crown Forex.

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As a side note …

One of the hardest things to educate traders about has been what broker to open an account with. I come from the perspective of putting guidelines out there for traders to consider when choosing a broker over saying “Open an account with XYZ broker.”

Opening offshore brokerage accounts, especially with Swiss-based brokers has been popular with North American based traders. I’ve always maintained that there is no good reason to look overseas to open a brokerage account. Without a doubt I don’t think a perfect broker exists, but a trader always has to be aware of who they are doing business with and that is tough when the broker is headquartered thousands of miles away.

Ensuring that the broker is regulated first in the jurisdiction it does business in and also in the jurisdiction in which you live – if different – is an easy starting point.

The past week has been hectic and busy. It isn’t just Christmas but the big snow dump we’ve got here in Vancouver has slowed things down a little.

I hope you are all enjoying the holiday season and for those of you who celebrate Christmas, Merry Christmas.

I’ll be sharing a New Years message in a coming post, through which I’ll share some thoughts on the industry and Trading Post. For now, take is easy, enjoy the season and put your trading on hiatus for a few days!

*This is a lengthy post, but one that has been a long time in coming. I guess I just got frustrated enough to vent a little bit, and if you can follow along with my logic, I think you'll find what I'm getting at.*

If you take a step back and see how Forex trading has exploded over the past five or so years, it's pretty impressive.

Then if you take a look at how the Metatrader platform and its corresponding Expert Advisors have grown over that same time, you'll shake your head - just as I'm doing now.

Am I a naysayer? Sure, I guess I am. I've never believed in staking my future on something that someone else has created. That equates to making money for nothing. Metatrader and EA's have seen astronomical growth because its users see a potentially easy way to make money.

But for the masses, when was the last time you went into your backyard and shook cash out of your money tree? There will always be exceptions for those who trade strictly this way and do well - and for stretches maybe the masses will do well trading with a particular EA too. But there is always an end to the free ride - always.

The problem that many who are skipping from EA to EA face is that they are chasing something that is fleeting. I guess that is what hope will do for you. It's in our nature. I go golfing hoping that I can break 80. I disappoint myself everytime out, but I don't quit, I keep trying because there is always that hope.

Poker players are more like EA pond jumpers. The middling players are always hoping for the big break - and sometimes they get it - but most of the time their play is supporting the industry.

If you are regularly using one EA after another, whether you like it or not, chances are, you are a middling player in the EA game. The argument to trading with EAs as opposed to manual trading is that trading manually takes too much time or involves too much commitment.

When it comes to doing something full-time is there such a thing as taking too much time or involving too much commitment? Every useful endeavor in life requires both at the beginning.

The funny thing is, most EA traders probably spend more time buying and trading one EA after another. Trying to find wrinkles in what someone else has created. Then if that EA's performace goes south or if a broker bans it ... well it's on to the next one.

Recently an EA called FAPTurbo burst onto the scene with LOTS of hype, and even more affiliates sending their affiliate links around hawking it as the next best thing to double your account every month. Come to think of it I'm probably one of the very few who have linked to them without an affiliate link.

Now this EA has only been out a matter of weeks, NOT months, and everyone is all over it. The pre-launch was Nov. 20, 2008! So we're into this for less than a month. At a commission of 60% on a $97 sale, and in their words "This launch is build on the expertise of some true marketing gurus ..." Well the fact that it's everywhere is no surprise. I've gotten more than five emails on it in the past two weeks - each with an affiliate link. And this is from the creators of previous "IT" EAs ForexAutoPilot and Forex-Killer. This is capitalism at its best - or worst, depending on how you look at it.

On Facebook in the "Finding the Best Forex Advisor" group there is a running dialogue on FAPTurbo ... and it isn't as flattering as the FAPTurbo website makes this EA out to be.

Sue Vesta of the group just noted in the Facebook group that she was banned from trading at ODL Securities because she was trading with the FAPTurbo EA. I have friends who are actually trading the EA with ODL so I will have to check if indeed their accounts have been squeezed as Sue mentioned all traders with ODL using FAPTurbo would have their accounts closed.

And there are comments about other brokers widening spreads, about FAPTurbo not taking trades for some reason and the drama has begun.

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I guess that's venting my frustration. Am I anti-EA? Absolutely not. But I'm anti-the way these things are being marketed - for the most part.

As an example I've been corresponding with David Robinson of Pipforia which EA offers realistic returns with rather understated marketing. It is a monthly subscription, but in various user forums, including with the endorsement of CK  Owyong it looks interesting.

I have used EAs to supplement my manual trading in the past, and it can work as a great supplement in MY case.

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So keep your eyes wide open. More than the $97 you pay for an EA like FAPTurbo, you are shooting steroids into your expectations - and soon you won't be able to manage them. Before it gets out of control, get things under control and be realistic. The negative effects can be more than monetary.

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Just visted the ODL Securities website and saw the following notice posted:

Important Notice - Scalping / Sniping EAs

ODL allows and has been at the forefront of enabling the use of Expert Advisors (EAs) on our trading platforms. This applies to EAs that trade the market fairly.

Unfortunately we have recently uncovered some potentially unethical trading or possible market abuse via certain EAs. We are currently investigating this.  As per our Terms of Business Agreement with Clients, we reserve the right to suspend and terminate accounts at our discretion. This is particularly significant where unethical trading or possible market abuse is prevalent using these certain EAs, other EAs are not affected and we welcome you to continue using your account.

Since the debut of Dave Harder's Bulls Zen Bears financial research newsletter last year, we have seen a steady increase of people subscribed to it. It has been free and is found on no other website anywhere in the form that we provide it.

Respecting Dave's work with his institutional clients, however, Bulls Zen Bears will become a paid subscription service starting sometime in Q1 of 2009. At that time, the name of the newsletter will most likely change.

The cost will be very modest, but as many of you have seen, Dave has had some spot on insight into the financial markets and his knowledge and analysis have proven to be sound.

We'll release more information on how you can officially subscribe in the coming weeks, but for now, enjoy the free access you have to some of the best and concise financial analysis around.

Earlier this year I received a call from Brain Glantz, VP of Business Development for a new company called Currensee. It's a Venture Capital backed entity with an intriguing business model.

Over 450 people have expressed interest in its closed beta testing which starts in February 2009.

Currensee is banking on brining traders together in a community that is at a higher level of interaction than a forum based website (like Forex Factory or Elite Trader) or portal (like FXstreet).

Taken directly from its website Currensee positions itself as:

Find people you trust. See real trades. Gain market insight.

We talk to traders. A lot. And what we hear is pretty interesting. Everywhere we go, traders have been telling us that they want to collaborate with others, but they don't know who to trust. They want real-time market insights, while learning from experts at the same time. And most of all, they’re tired of feeling isolated and alone.

This is what Currensee is all about. We are an independent, patent-pending Forex decision-making network where traders can connect with each other. New traders can collaborate with more experienced traders to accelerate learning and increase chances for success. Expert traders can build business within the Currensee network and showcase performance within the community.

Our goal is to help you become a better informed trader by leveraging the wisdom of the Currensee community.

I think the concept is solid. Obviously they know more than I do about what they want to do, but based on my knowledge there isn't a mechanism to force trade idea givers to be registered in any way. With a landscape that is evolving quickly from a regulations point of view, this is one area that Currensee lacks and needs to remedy. The term "experts" is loosely used - and I'd like them to define what an "expert" is - because as far as I know anyone can proclaim themselves an "expert."

It is pending with the National Futures Association right now as an Introducing Broker and if it approved, it will have significant compliance issues to deal with, if the idea does take hold in the community.

The danger in being rooted to the Forex market is - and we've all seen this - that there is an abundance of traders who are just looking to be told what to do and when to do it. There is also no compensation for idea givers which might keep the quality of the community at a hobbyish type of level with a small handful of power users commanding influence.

These are my thoughts, and perhaps Currensee has evolved its business model. It definitely is unique and there will be strong interest in it I'm sure. Many traders look for others to interact with.

Trading Post has always in its long-term plan had a similar type of idea to bring traders and idea givers together, but at at a more professionally geared level.

I just read today that Divx laid off 21 staffers (10% or so of its workforce). And all of us are hearing of one company after another laying off chunks of people. JPMorgan Chase CEO Jamie Dimon walked into Seattle a few weeks ago and announced that its newest Pacific Northwest acquisition Washington Mutual would layoff 3400.

The question that's asked over and over (in my mind) is with so many people on the street, and continuing to be shown the door, 2009 is shaping up to be very, very interesting. The next question is, who's hiring?

TechCrunch has an interesting graph and timeline of layoffs this year. It's a long and disheartening list to say that least, but that's the current reality.

My take as an entrepreneur in building a business at Trading Post is rather optimistic more than anything else. We've gone through our share of cutting the fat and evolution in our business. It's probably something that I will touch on a little more as I reflect back before the end of the year.

The bottom line is we're seeing increased interest in self-directed Forex trading, and client trading volume has also been increasing. Indications are more people are finding interest in controlling their own finances than ever before.

It is definitely an interesting time we're living in - it's just unfortunate that all this is at a precipice at such a demanding time of year for everyone.

Twittering is truly a remarkable thing.

So remarkable that I have two accounts and Trading Post has its own.

It seems like I unearth something or an interesting tweet comes through everyday. Yesterday, I added Portfolio Monkey, and it's currently in alpha stage (I love things that are so new that it's pre-beta), but it's a simple yet very interesting concept if you trade stocks.