Fighting Back

If you are feeling discouraged having realized just how far the odds have been stacked against the individual trader, rest assured that there are a few simple mea¬sures that can be immediately implemented to gain back some of the lost ground. The brokers may have initially gained the upper hand, but they have by no means left the retail trader without recourse.
USE DIFFERENT PRICE FEEDS
If you use the same price feed on your trading platfofm and your charting appli¬cations, then you are essentially trading with blinkers on. By limiting yourself to your FCM's artificially created bubble, you are giving up the power to become judge and executioner. Your SlOpS may be run or you may trade off manipulated prices, but you wou ld never realize that the moves did not correspond to the general market.
As a trader, you want to remain at all times objective and have as broad a view as possible of the market, something that cannoL be accomplished using a single feed. Having a second or third feed is your way of getting a "second opinion'• on the market and gives you a way to confirm the price action. Your platform feed should only be used for placing trades, bUL your strategy and analysis should rely on the purest, most unbiased price feed you can find. Most retail traders do not have the luxury of trading with a Reuters or EBS feed, but rest assured that alternative sources can be found. Every trader should spend some time comparing different feeds and charts to see how they perform in fast-moving markets when retail platforms regularly freeze their prices (and notice that demo feeds are different from live feeds). Having a stable and faithful charting application is especially vital to all short-term traders.
Do a search for yourself and find one thaI suits your needs, but remember that mosl of these "informative" websites are actually run or sponsored by brokers, so make sure that you know where the price feed is coming from. It may be worth the
Beat the Forex Dealer
added cost of subscribing to an independent and dedicated charting package, since the benefit of receiving an accurate picture of the market will more than offset the cost in the long run. Before choosing one. however. ask them who provides them with the ir streaming FX data feed.
KEEP DETAILED RECORDS
The next thing that traders can do to gain back some of the 10s1 grou nd is to keep detailed trading records. The number one reason is that 1110St slighted traders find it difficult to take action against their broker owing to lack of evidence. Clients may
feel cheated when their orders are not filled correctly, orders disappear from their
screen. or when they find open trades suddenly closed, but it is all very difficult to prove. When you call your broker to complain you may Slate that "my order disappeared!", to which they may reply "do you have proor?" This ortell turns the matter into a your-word versus their-word scenario. which is why it becomes imperative to keep good trading records.
An easy way to do this is to take screen shots. You can find and download a variety of applications on the web, and taking screen shots of your orders in the market, trades. or any other important market activity (like unlawful price spikes) gives you a solid foundation on which to argue any future disagreement. Professionals do it and so should you.
OFFICIAL ACTIONS
If you feel you have been wronged and cannot come to a suitable agreement with your broker, do not hesitate to contact either the CFTC or the NFA. Although most brokers will usually fold when threatened with official action. if they inste,ld choose to call your blu ff go directly to these agencies since both offer programs thm may help clients resolve disputes with brokers. You do not need to hire a lawyer to file a complaint, and usually laking this initial step is enough to scare a broker into a (reasonable) settlement. since the last thing they want on their official record is another disgruntled trader.
The NFA offers an arbitration program to help customers and NFA Members resolve disputes. Information about NFA's arbitration program is available by call¬ing Nl--"A at 800-62 1-3570 or visiting the Dispute Resolution section of its web site al www.nfa.fulUres.org.
Similarly, the CFTC offers a reparation program for resolving disputes. If you want information about filing a CITC reparations complaint, contact the CFTCs Office.

If you are fcd up with your broker's obnoxious habits, an obvious alternative to trading with an off-exchange broker is to trade through an exchange. The Chicago Mercantile Exchange operates its own clearing house and virtually eliminates credit risk by acting as the counterparty lO every transaction. An additional benefit to the individual is that your funds are held in segregated accounts. meaning that they are protected in case of bankruptcy (unlike on-line brokers). Hedge funds and individual traders have used the CME for years to transact theiJ' FX business. so take a look at their FX offering and see if it is right for you.

Of course the number one thing traders can do to shift the odds in their favor is to become benee traders. Thjs sounds obvious, but it is true. It is much easier to place the blame on bad dealers, systems providers, CIC., than on yourself, and for all of the shoddy dealings a retail trader may receive, at the end of the day it is usually their lack of experience and/or bad trading habits that are responsible for the miserable results.
The learning curve can be steep and uncompromising, and in this market there is no free lunch to be had. All traders, even the most successful ones, have paid
their "tuition" to the market and all realize that the key to becoming successful
is survival. Simply put, (he longer you stay in the market the better your chances are of turning into a great trader. For new traders this means establishing your survivability in the market and for experienced traders it means not falling into bad habits.
Obviously, even with all of the sophisticated chaning and analytical software available nowadays success is still extremely difficuil to accomplish, and moving up the learning curve can take a degree of dedication, capacity. and motivation that many traders simply do not possess. This leads many retail traders to "olilsolirce" the analytical work to a third party, whieh can prove extremely hazardous since before you know it you find yourself blindly following the advice of some market guru, expen, or system. If it were only so easy! The actual decision-making process is the hardest pan of trading, so make sure that you keep a firm grasp on it.
Once we put aside all of the nonsense handed out by brokers and gurus, it is lime to get into the meat of becoming a greal FX trader. What exactly does it take to post steady profits in this business? What trading rules do professionals adhere to? What FX tricks exist out there that can help improve your performance?
The second half of this book is intended to give active traders the information and tools they need to survive in the FX market and begin developing their own habits and techniques that will turn them into successful traders.