It was only a matter of time before some of the slimeballs in the forex business got caught. As you already know, 48 players in the forex business were arrested this week as part of a 18-month long sting operation by the FBI. What can we learn about this?
First: you can only scam the average joe for so long
This was bound to happen eventually. The forex business is a den of thieves who routinely steal from each other and from unsuspecting investors. If you've ever received a phone call from a boiler room broker, you know what I'm talking about. Some of you out there have been unfortunate enough to invest with some of these brokers.
But, as with an industry that is maturing (more on that below), the time comes when too many average joes have been scammed, too many complaints fly in, and the FBI starts moving on it.
Second: regulation is coming
And it's a good thing that it is. Soon, anyone who manages forex funds for investors will be required to have a CTA or a CPO. And a Series 3 license. This is a good thing for all of us. No matter what the libertarians and ditto-heads tell you, a little bit of regulation is a good thing. The forex market, for over 30 years, has been the market of choice for terrorists and mobsters to launder money. New, inevitable regulations should be welcomed.
Third: get ready for the forex market to expand
The forex market is at the tipping point. which means that we're about to see a massive expansion in online trading. There are currently about 100,000 of us out there, and within a year (and you can quote me on this) there will be over 200,000. FXCM alone will have 100,000 clients next year. This means that there will be industry consolidation. Standardized customer service. This is mostly good for all of us, as the less legitimate brokers disappear and the good guys vault to the top. This also means that those of you who are trading now will have a vastly improved market in a year.
