Brokers give traders easy access to the market. In return, traders pay them a small fee. That’s the perfect broker-trader relationship. Traders do not need anything else from brokers. But nowadays, brokers are offering many products and services, apart from brokering, all of which are designed to keep traders in the dark and covered in bullshit. Ignorant traders equal big profit.
Brokers advertise that they offer stocks, currencies, indices, futures and all the other financial instruments and markets that most people have no idea what they are or how they work but they sound really cool. And they advertise it like it’s some sort of a miracle. No, that’s what brokers are supposed to do! What they are really saying, however, is “just look at all the ways you can lose your money”. And don’t think for a moment that they care about traders. There is an entire industry funded by trader ignorance. The trader’s loss is the broker’s profit. Do you think they want traders to win money from trading? The money that they will pay traders comes out of their pocket! And giving your customers their money back is not good for business.
Brokers also love to call their victim, I mean clients. And no matter what they tell you what they are really saying is “please, let us help you lose your money faster.” And everything they say is absolute bullshit and a waste of traders’ time. The people that make these calls are in no way qualified or eager to help you. They just make hundreds of phone calls every day and waste our time. This is in their job description. So you can do what I do and hang up the phone immediately.
From time to time brokers will also set up trader competitions. And I think that we can all agree that it is not a bad idea. At least not at first. Because if you actually know how real traders work, you will see that trader competitions are absolute bullshit. They are really gambling competitions. Let’s start with the length of these competitions. The ones that I have seen, have all been ranging between 3 weeks and 3 months. This is nowhere near enough time for a trading strategy or for the market to show you what they can really do, what they are capable of. NOWHERE NEAR ENOUGH TIME. Second, because these competitions run on demo accounts, traders are not really risking anything. And that’s like NASA launching rockets without taking gravity into account. So traders can do stupid stuff like going all in. And like we all know, you never go full retard. And purely because of the randomness of our universe, there will always be, let’s say, a dozen lucky guys who win 5-6-7 all in trades in a row or something like that. And they will get unreal returns on their demo accounts and then the competition will end. And because nobody can compete with a gazillion % profit everyone is forced to go all in. And that’s bullshit. Everyone can see how much these traders made and everyone knows what the competition prizes are and for unsuspecting guys who don’t have a clue what’s happening, trading becomes irresistible.
And it gets even better. Brokers these days are offering training courses or educational materials of all sorts. E-books, pdfs, videos, you name it, they have it. Brokers offering education on how to trade the markets is like putting Pablo Escobar in charge of the Drug Enforcement Administration. It kind of makes no sense. But the education the brokers provide is, of course, there to serve their interests, not the traders. And of course it’s absolute bullshit. This education is the “don’t waste your time looking for a way to lose your money, we’ll tell you all about it” type and of course it’s what everyone already knows. And what everyone knows is worthless. 97% of traders are losers. They will tell you what technical analysis is, how to trade the news, they will tell you what the RSI is and how to use. Good luck with that glorious knowledge…
Brokers are, however, a necessary evil. We can’t trade as easily without them. And they are not all that bad. The best brokers will offer you low spreads or low commissions and will get out of your way. Not because they are all good guys, but because you are just a drop in their ocean. Usually these are the oldest and well-known brokers with the biggest client bases. Before deciding where to put your money, you should compare the spreads they offer or the commissions they will take.
From a trader’s point of view, brokers should serve only one purpose and that is to give you access to the markets. And that is what you should use them for. And you will pay them a small fee for that. You can also ask about things that we know to be the case i.e. facts, the things that you can easily check on wikipedia. For example what is leverage or how does it work. Everything else the broker will offer you is not in your interest!