Forex Apocalypse: Why Retail FX is changing so fast and what’s next for the industry – Guest Editorial
“The culture of retail FX will change when its leadership moves from assumption to curiosity, from boredom to adventure, from desperation to creativity” says Nathaniel Hansen
By Nathaniel Hansen of The Socializers
We all saw it coming years ago, as more and more amateur traders were losing their shirts, homes and even lives, gambling in the great global casino called Retail Forex.
Those of us marketing forex to exhausted men staying up late at night watching porn and gambling away their week’s earnings in hopes of massive gains saw it. So did the customer service agents. So did those in the C-suite and in the now defunct “dealing rooms”, where forex dealers would purposely wipe out traders after letting them win a few times.
Now even Cyprus, the birthplace of the famous oxhide ingot, one of the world’s first international currencies, has submitted to ESMA rules on leverage and other restrictions.
Creativity and relationship-building are essential aspects of the coming age in retail fx. The companies who will win in this next age of retail fx will get to know the trader, will make the trader first and the trade second.
The retail fx company of the future will find creative ways to personalize a trader’s journey, beginning with evaluation of the sophistication of each trader, one by one, followed by stage-appropriate education for the level each trader is at.
Forex educators will come into a new hey-day, and not one where they are rewarded for speeding up the educational process but one where each trader’s pace is taken into consideration…as well as each trader’s individual psychology.
The successful retail fx company of the future will emphasize education and insist upon proof that a trader has passed a certain level of expertise before transitioning from “monopoly money” accounts to real money accounts.
There is a company in Stockholm whose owners really get this and have invested significant dollars into building a platform where the trader is put first, ahead of the trade.
While working with these gentlemen, I saw an in-the-flesh example of a retail FX company that could survive the swift changes overtaking this niche industry. Michael Buchbinder and Arif Alexander Ahmad are truly interested in creating relationships with educators, traders, wealth managers, and others in theFX world.
So much so that they invited and paid for many individuals to visit Stockholm and get to know Swedish culture first-hand. Walking through Gamla Stan, eating at Michelin star restaurants, spending long hours at the famous CentralBadet spa, riding by speed boat to concerts on the water, touring the vast and intricate Swedish archipelago…and most of all, getting to really know the individual face to face. No-one does this in retail FX to the degree that Michael and Arif did during the Spring and Summer of 2019. It was truly phenomenal to witness.
In order to survive in the coming regulatory environment, retail FX leaders will have to devote time to relationships….significant time. And with the right people. Fortunately, we now have technology that gives us the ability to quickly assess and identify the right people, what these people love, what they like to eat, drink, wear, play at, talk about, and more.
Through social listening, retail fx companies can come to know the trader intimately, can build the FX educator’s business with truly helpful ideas, can spot potential pitfalls ahead of time, can know the right tone to take with prospective introducing brokers, and can watch the trend of conversations at scale across regions in various languages. The point is: retail fx leaders must start to listen more and for longer.
There’s an old Inuit saying: keep a quiet mind and read the signs. As any seasoned trader knows, discipline and sticking with a specific strategy amidst the ups and downs of markets is how to win. Retail FX leadership, and I’m talking about CEOs, COOs, CCOs, CMOs — the entire C-Suite, must spend up to 1 hour a day simply listening to the real world chatter of the average trader…must pick up the phone and ask the average FX educator what he/she is struggling with in his/her business…must get to know these introducing brokers in person.
Our events in retail fx must be less about how to use the trade to win and more about how to get to know the trader. The trader is why we’re all in business, after all. If you kill off all the traders, the game is over. You, CEO of a retail FX company, please tell me next year that you’ve personally spoken with 500-1000 real traders in person.
You, CEO of a retail fx company, tell me that you’ve personally developed programs at your company to foster discipline in those who use your brokerage to trade through. You, CEO of a retail FX company, focus on that person who makes your business hum…the trader himself.
How can this culture change take place, you ask? What can really foment such a change in the minds of men and women who have focussed for so many years on winning every duel on every trade? How can retail fx survive if the CEOs and other C-suite fx leaders start focusing more on the needs of the trader, to the detriment of the firm itself?
The culture can change with one simple goal: to listen, simply start listening. Your traders are telling you what they want. On Forex Peace Army, on MT5 Forum, on Twitter, on Reddit, and in many other online forums where you can listen and dissect and more fully understand what the average trader seeks. And your larger clients, those wealth managers, who want a quality trader to grow their client’s portfolios are also wanting to talk to you, Mr. CEO.
These wealth managers want you to show how a balanced portfolio can leverage losses in forex trading to lessen tax burdens. These wealth managers want to feel that their clients are safe with your firm because of the strategies that you’ve put together to support growing their clients’ portfolios through smart trades at the right time. The culture of retail FX will change when its leadership moves from assumption to curiosity, from boredom to adventure, from desperation to creativity.
Many retail FX firms will fail in the next 12 months. Those who last will implement listening as a core value and a necessary muscle for moving through inevitable hells approaching this industry.
To spur your staff on, to inspire their creativity, you must listen to what frustrates them. To instil discipline in your trading clients and celebrate wins, you must listen to them in order to properly identify the stage each individual is at in their trading journey.
To create the new culture of retail fx, you must have the tools at your fingertips to truly hear on a macro level AND a micro level what is being said: by the trader, the educator, the introducing broker, your competitor and the entire marketplace.
Ask yourself tonight after work, or even in this moment wherever you are, how retail FX will survive. Ask yourself what your first action would be as an FX leader to lead the new culture of retail fx and attract the new generation of traders. I think you’ll agree that listening is the first step.
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