I have come across with the Trade Leaders Programs that I was told (by the broker, yeah right!) that it is a great program to join. At first I thought, yeah that is great, I can join the program and I can have my trades mimix the trade leaders in the program. Then i would makes a great profits. Then when I looked into what is the stipulation. It would cost me 20% success fee or pay monthly service fee.
I then, sat down and think and come to realized that I am not ready to pay the fee imposed by the broker.
It’s a great program for the broker. I’ve read about cases of followers that were in the red, despite the fact that the leader was being advertised as profitable. It’s no surprise when you think that you’re being charged 2/20 plus ‘The Trade Leader Spread Premium’. Moreover, I get the feeling that those leaders are chosen primarily based on how many trades they take…the more, the merrier the broker is. The conflict of interest between you as an investor and this program is as big as mount Everest.
I think it is a terrible mistake for anyone who wants to trade forex. It has always been my opinion that if YOU want to trade forex you need to learn how to that and there is no substitute for that.
Thanks MrBurger, that is what I feel like after I thought about it. So I told the broker that I wants to learn it on my own. He never responded back after that.
Did I read that correctly, 20% monthly fee? If so, Thats very expensive. You will need to make 20% every month just to break even. Can you handle that kind of fee and still sleep through the night not to mention you need to " force" yourself to make atleast 20% a month just to break even? Wow
Hell no!! I would probably working like a slave doing that… No thank you!
Even if say, it was 20% yearly fee still to much…and is it guarantee? In the trading world, there is no guarantee of success. The only guarantee is your broker will get their payments. It’s a win win for them but not to you…
20% is charged monthly on profits with high watermark. To be totally honest I think that’s quite irrelevant as I would be very surprised to find out that there are investors who consistently have profit. The real danger and killer of the investor’s account is the conflict of interest between him and the program. The broker makes money through the extra spread, his interest is that there are as many transactions as possible. Another thing, about these, let’s call them leaders. They’re compensated with only 15% of realized gains. I must wonder what really successful trader would want to work under such poor compensation scheme. There’s way too much money left on the table for the middleman.
Not to mention they’re not very transparent. One leader has 70% drawdown. wow. I had that my first year of trading, but I didn’t call myself a leader. I don’t know who would invest money in some no name no face individual from China who between bad trading and extra spreads could wipe out your account in a month.
The traders graveyard is full of traders that used: brokers, programs and/or or strategies and paid their money with the promise of vast wealth, without doing any work only to find that they not only lost the money they paid for the whatever, but also blew the money in their trading account trying to follow whatever they bought.
Its called “follow the leader”…it will probably worth while to just donate the money to charity and you will even feel good about it… and no, you do not need to do the “ice bucket challenge”
I don’t know who would invest money in some no name no face individual from China who between bad trading and extra spreads could wipe out your account in a month.