Here's a quote from a guy who runs one of these shops:
"90% of the customers lose 90% of their money in 90 days."
A friend of mine was chatting to him about doing some business.
I would think it's more about leverage than commission. Looking at FX, you can get tiny spreads, almost comparable to what I saw in a hedge fund. It takes a while to eat up a whole account on such small percentages. Leverage, on the other hand is something you can use to demolish capital over an afternoon. Ratios like 1/200 are a formula to go broke if you haven't had a look at something like Kelly Criterion.
"90% of the customers lose 90% of their money in 90 days."
A friend of mine was chatting to him about doing some business.
I would think it's more about leverage than commission. Looking at FX, you can get tiny spreads, almost comparable to what I saw in a hedge fund. It takes a while to eat up a whole account on such small percentages. Leverage, on the other hand is something you can use to demolish capital over an afternoon. Ratios like 1/200 are a formula to go broke if you haven't had a look at something like Kelly Criterion.