There are MMers and price takers. Generally IBs make money by internalizing (taking risk) and offering a wide market (rel to their cost-basis) to the client. If they don't have inventory then they'll join the client order and work it. That's the value add on the execution-side. There are tons of inefficiencies in listed markets that are relatively low capacity and not interesting to IBs. Fills will always be better for the retail guy for no other reason(s) that the size is immaterial and retail can transact at zero fees. Microstructure not an issue, etc.
I've considered becoming a vendor. It seems infinitely easier than actually trading. Zero risk. Bigger returns. No need to sit in front of the screens on a daily basis. If I create a course which I sell for $250 and can generate 1000 sales (seems possible considering the huge amount of people trying to make it in this business worldwide) that's easy money. The only reason I'm not doing it so far is because I have created something unique which I want to see if I can monetize myself instead. It seems like most who are selling courses are just re-packaging the same old TA with a twist. Some are even less creative.
Hi, I've found this forum by googling "is Tom Hougaard a scam", found this discussion very interesting and decided to register and give my 5 cents on this topic. I'll start by saying that I believe I've done my homework and research and came to some conclusions, but I am always ready to change my opinion in light of some new facts and arguments. My conclusion so far is that Tom Hougaard is legit, honest and most importantly transparent public trader. He is very much driven by the desire to create his long standing legacy, be accepted in the club of the most successful traders in the world and maybe one day considered to be Michael Jordan of retail traders. Having said that, let me now take the role of devil's advocate and see if that holds water. Let's assume that Tom is a scammer. Since he doesn't sell anything, only potential for a scam I can see is that he somehow colluded with the small offshore unregulated broker in order to get money of the pockets of his followers. Let's say they have some secretive deal and that Tom uses his influence and trust he has been building for years to lure retail traders to open accounts with this small broker and then they take advantage of that. Something like that is certainly possible and I can think of a few ways how that plot could work out. But then the question is: why bother? At this moment he has almost 40k subscribers on his telegram channel. He could just decide to charge a monthly subscription for say $10 and he would make a fortune, even if only small percentage of current subscribers would buy the subscription for a few bucks. So why would he go over all the trouble by creating a complicated, possibly criminal, fraud scheme with some broker in Bahamas, when he can get money from his followers in much simpler and perfectly legal way? I would like to hear the answer from @theanalyst and others who think hi might not be legit. Like I've said, I am always open to change my opinion.
I took the time and watched the seminar. And frankly, I am not impressed, to say the least. Here is my take on it: First he describes how the industry works: investment banks, exchanges, brokers. That part is OK, although it's common knowledge to everyone who is not a complete n00b. Then he goes into great details describing introducing broker (IB) contracts. His main point here is that "Educators" lure people into signing up with a broker and they teach them to trade with big sizes as frequent as possible ("promoting the narrative"). Well, that's just not true. To give you just one example: aforementioned TD365 broker offers free Al Brooks "Price action" video course when you sign up. In this course, Al Brooks is very clear about his advice for beginner traders: stick to swing trading style with small sizes and let your position last. He does mention scalping (big sizes, frequent trades) but he says several times that this is only for seasoned and experience traders, and he doesn't recommend it. According to this seminar, Brooks should be fired by the broker, not promoted. The conclusion of the seminar is that it's impossible to be profitable as a day trader (which I would say is empirically debunked, since there obviously are profitable day traders out there), and that everyone who says otherwise is a snake oil salesman who is trying to sell you a dream. So, what's the solution? Lo and behold! the solution is to buy a course from his "Institute" for $3000 and learn how to trade FX by putting one or two trades per year (sic!). So everyone else is a scammer, but us. We are the only honest ones and for several thousand bucks we will learn you how to become profitable trader. Isn't that a covenience! (...and that's not all! If you are willing to spend more thousands of dollars there are plenty of other courses, materials, bonus education videos, mentoring... The link to all that is below the seminar video on YT.)
Ok if anyone wants to follow this 'Master trader Toms' candlestick signals check this out and then come back and let me know how you got on lol. Anyone thinking they will make money trading CFDs like this is literally out of their mind.
That's always been my impression, too. Maybe I'm too suspicious, but I can't help wondering why he'd need the Youtube channel and the big following, if he could trade with steady success. He seems to put an enormous amount of time, effort and energy into promoting a highly questionable (I'm being polite!) unregulated offshore CFD brokerage, one of whose directors seems to repay the compliment by promoting Hougaard's Youtube channel on their website, too. For me, the whole thing doesn't come anywhere close to passing the smell test.
I just skipped through the video (watched the trades and exits etc) and really anyone trying to 'learn' trading like that is going to lose their money fast. IF the account was live and not demo then the master is down heavily from some crappy setups. My advice to anyone is DO NOT trade CFDs and learn futures (micros are a good introduction) . Using unregulated CFD brokers and influencer 'signals' is a recipe for disaster. Just watch this video and make your own decision on the thread title.. Trading is a solo endeavour at a granular level, always has been always will be. For me at least. Also just trading candlestick patterns and acting like you can read the market is ridiculous. Its hard enough with all the tools available in futures.
Absolutely. They’re illegal in some countries for a reason (with more countries to follow, is my guess). In these days of MES, MNQ, MYM etc., there’s no real need for anyone to trade CFD’s. Naïve noobs are attracted to them because of relentless promotions, inadequate regulation, undercapitalization, high leverage, bonus offers, competitions and a whole host of other factors designed specifically to attract gullible gamblers. My impression is that many of the people trading forex CFD’s, in particular, imagine that their counterparty is actually a “broker,” and that currencies are actually changing hands each time they “trade”.
@theanalyst : I don't see how one bad afternoon is a proof that Tom is a bad trader. I am following him on Telegram for some time now and these days / sessions are rather rare. Yesterday's session is the worst I've seen in a long long time. Not a representative one. By the end of the month he is always in profit. Could you be so kind to explain why it's impossible to earn money trading CFD's? Don't they just represent the price of the underlying index? If so, if one can predict the price movement of the index (spot trend reversal or just knowing how to ride the trend), why shouldn't one be able to make money? @Probability : Similar question. What is wrong with CFD's, assuming that one has an honest and reputable broker? If CFD represents the price of the underlying index, and one can predict the price movement of the index, where is the problem? I am obviously missing something