Why actual profitable Forex or CFD Traders don't share their strategy Introduction: This post breaks down an educator sharing their FX or CFD trading strategy would actually hurt how well it “works” for them assuming they’re actually trading it live and the strategy works (called edge decay), the realities of trading CFDs and retail Forex, and why liquidity and order execution often aren’t what most traders expect. Let’s make something clear A specific trading strategy ≠ Trading methodology / Idea This assumes their system is profitable and the educator trades it live. The Educator Directs traders to his broker via affiliation or casual mention (CFD Talk) Edge Decay & System Edge Dilution Alpha decay means your trading system’s edge; your ability to make money - fades over time, especially if lots of people use the same strategy. The Unique World of Forex & CFDs Forex and CFD trading is very different from futures or direct market access instruments: Liquidity: The FX market is huge ($6 trillion a day), but retail traders don’t get to tap that full liquidity. Brokers might only have small inventories (like 5-20 lots on buy/sell), so bigger orders face slippage or rejection. Synthetic Order Books: Many CFD and retail FX brokers use decentralized or synthetic books, not a centralized exchange book. That’s why prices vary between brokers, even for the same instrument. Price & Tick Differences: CFDs imitate the underlying assets but often have different tick sizes and pricing models (e.g., US30 vs Dow Jones futures), which affects fills and slippage. Market Makers and Broker Mechanics Most CFD brokers are market makers they create their own market and manage their exposure by hedging in underlying markets or with liquidity providers. Market making isn’t bad or “trading against you.” It’s how they manage risk and keep their books balanced. (delta-neutral) They make money via spreads, commissions, and profit from overnight charges (not always). Different brokers offer different quotes and liquidity, which explains why prices don’t always match across platforms. The difference between A Book (orders sent to the market) and B Book (internalized risk) brokers is complicated many brokers use a mix of both. Practical Trading Issues with Size When trading larger sizes on CFDs or retail FX, liquidity issues become obvious. Orders might not fill at your target price or require market orders that cause slippage. Spreading trades across brokers or instruments can help but has limits. Even I’ve run into fill issues on retail platforms when trading buy limit for ~125 units (25 YM Contract equivalent) → Although manageable as rare. (because I don’t have a large crowd consistently trading behind me) Why Symbols Look Different on CFDs CFDs use alternate symbols like US30 instead of DJI because they’re synthetic contracts for difference. They mimic but aren’t identical to real futures or indices due to legal and pricing model differences. Important Warnings About Public Trading Strategies Many “gurus” show “profitable” strategies without factoring in market impact or real-world fill problems. Assuming a strategy works without testing how execution holds up at scale is risky. If a strategy gets popular and a lot of people use it, it’ll lose edge because of alpha decay. Educators often skip over liquidity, slippage, and broker mechanics, giving a false sense of simplicity. They also conveniently skip over that no Prop firm regardless if retail / scouting or professional with a base salary allows copy trading activity; It’s not allowed, another net negative. To share one’s edge reduces personal P&L potential. Summary & Final Thoughts Edge decay from crowding can be a reason a retail systems fail. (Turtle trading strategy returns are less and less impressive the more time elapses) Forex and CFD retail trading have unique liquidity and execution challenges due to synthetic books and limited broker inventory. Market makers play a key role but can cause price differences and fills that don’t match expectations. Big trade sizes expose these problems clearly; smaller traders often don’t notice. Be sceptical of public “profitable” systems without understanding market microstructure and real fill conditions. Managing risk, liquidity, and execution takes knowing how brokers and markets work - sometimes even using multiple venues. (if you’re trading FX) If you want to trade seriously, grasping these realities is crucial to protect your edge and avoid common mistakes. Now for liquid markets like futures (Bonus): If you trade big size solo, like 100 contracts in futures, you might cause some noise but won’t really move the price during active hours. But if ex 200 traders each trade 5 contracts at the same time using the same system, that adds up to 1000 potential contracts which could influence price or HFTs especially outside of NYSE hours like London session & afterhours. This concentrated pressure can cause slippage or bad fills when scalping or day trading, which would eat at the educator’s edge. (market crowding) Even a couple ticks of adverse price movement can wreck scalping or day trading strategies. Bottom line: Although uncommon; sharing an actual profitable system risk losing or destroying your edge even on liquid markets because of the combined trading has potential to very briefly influence the market at consistent levels. It's about potential net negative for strategy sharing. Algorithms and Market Response Algos aren’t out to get you. They’re automatic programs working to make the market efficient. When lots of orders cluster at predictable prices, algos notice and adjust — often by pulling liquidity or moving prices to avoid risk. So, when if feel “hunted” by algos, it’s random and just the market reacting to too much concentration/imbalances. Main Point: FX & CFD Traders won't get filled on their live trades (at the prices they want) if they share and their strategy becomes popular on their broker. Additional Reading (Context): Julien Penasse - Understanding Alpha Decay On the Effect of Alpha Decay and Transaction Costs on the Multi-period Optimal Trading Strategy High frequency market making: The role of speed - Yacine Aït-Sahalia, Mehmet Sağlam The Role of Financial Instruments in Reducing Exchange Rate Risk Vlora Berisha, Rrustem Asllanaj - For context from Ron: Total Return Swaps (TRS) and Contract for Difference (CFDs) are similar in that both allow you to gain exposure to an asset’s price changes/performance without owning it outright. You benefit from price changes and, depending on the contract & type even receive or pay income like dividends or interest. Both involve paying financing costs if you hold positions overnight (swap fees) IG Index (Example of a regulated CFD broker) CFD Customer agreement key parts: 12.8b 21.1 and so on https://www.ig.com/uk/customer-agreement Turtle Trading Edge & Alpha Decay https://forextraininggroup.com/the-...les/#:~:text=Is the Turtle,Turtle trading era. Note: Turtle strategy’s returns got diluted after media exposure or retail adoption & worsened after structural changes because of electronic trading etc.