Friday, 23 January 2015

The Swiss Franc Fiasco is the just the beginning of retail forex platforms’ worries

When the Switzerland National Bank caught the global forex market by surprise by suddenly pulling the plug on the euro peg for the safe haven Swiss Franc, many investment and finance firms took a beating. Forex trading, after all, is heavily leveraged. However, big investment houses walked away unscathed compared to the massive hit retail forex platforms took. If you think heavily leveraged trades are risky and potentially disastrous at the institutional level, take a look at the retail level.
Retail forex has been exploding precisely because many of these players, most notably FXCM, have been offering retail forex investors the tantalizing opportunity to turn a relatively low amount of cash into a decent payday. The secret, of course, is margin trading. For a tiny fraction of investors’ actual cash, they can take outsized risks in the hopes of turning that small investment into a large windfall. Who can blame them for clicking on those snazzy forex online ads, right?
Read more Click here / www.trade4x.net

 

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