I was especially interested in getting this book, since for about a year not long ago my company traded nearly a two million dollar account with MIGFX. In fact, our trading offices were visited that year by one of the principals of the company who travelled all the way from Geneva to Tucson, to meet us and take us out to dinner. That year we were also sent several expensive Christmas presents by that self described “part owner”, who inexplicably is no longer with MIGFX. We ourselves left MIGFX because of numerous difficulties with the trading platform and the brokerage firm itself, which are beyond the scope of this review. However it is probably helpful to offer a pertinent example since it represents a leading issue among others we experienced with MIG that are discussed in this book as shady dealing -- around “News Trades” the market feed on the MIG platform mysteriously slowed down and the platform was not operational. The book jacket information cryptically said it was written by “one of the pioneers in foreign exchange trading who developed one of the first retail-oriented currency programs, and currently leads the team of professionals at MIGFX Inc. “ but although we had talked to heads of operation at MIGFX we had never heard of this person, and to this day haven’t. His introduction only elaborates saying “… I offer my insights as a manager of a successful currency fund”. That should set a trader’s antennae (his spider sense?) to tingling. On the first page of the introduction I read, “The average retail trader must feel a terrible disconnect between what is described by famous experts and their actual trading experience”. The interesting thing about this statement is that it identically parallels my experience with what was described by MIGFX salespeople and my actual trading experience on the MIG platform. Setting the psychological tone right from the first pages with I-feel-your-pain statements such as, “By preying on the small [trader] speculator these shadowy characters [brokerage dealers] are often single-handedly responsible for turning winning traders into losers … their direct and purposeful interference can ruin even the most advanced or elegant trading system (page xiii). He goes on to “relate” to his reader by sympathetically commiserating, “… the FX world differs from traditional financial markets, and things deemed illegal in most other markets are simply regarded as “ part of the game” in FX. Insider trading front running, price shading etc., are all regularly seen in FX and have absolutely no legal repercussions. No government oversight and no central dealbook to compare traders means banks are pretty much free to do whatever the wan … an FX dealer may quote his clients whatever price he wishes. Spreads mysteriously widen and shrink, and the who’s who factor dominates.(pg 11)” From a mind trainer’s perspective, the book utterly targets your most easily swayed brain structures with rails and rants against the “slaughterhouse” of the forex market, the “criminally illegal acts” perpetrated by brokerage firms, forex traders as “economic war criminals” who prey on the weak and defenseless. Got your attention now? We’re only on page 16. Anyone who recognizes the technique hypnotic writing is aware of the impact of these kinds of word images. By Chapter 8, “Don’t Trust Your FCM” the author has us in a regular rhythm of reminders about the unhappy plight of the forex trader keeps us enrolled with seemingly trader-advocate statements, such as “Unlike market makers a dealer from an FX brokerage should play a blind third-party role by simply matching orders of their customer base”. “Detailing the dealer-inspired trading techniques developed by MIGFX consistently ranked month the world’s leading currency trading firms, the book helps turn average traders into winning traders; and in a market with a 90% rate winning traders are in fact quite rare!” As a professional mind trainer I can only shake my head in wonder why “dealer inspired” is intended to be a selling feature for MIG. While it is excellent that someone has finally written about the dealer games that brokerage firms play, it leaves me wondering about the head games this books plays. Reverse psychology? Dealer head fake? Self Gratuitous marketing ploy – you can trust me I understand your pain? This book has been called several things but one thing it is not is written by an author with no self interest for the sake of instructing a forex trader on how to beat the house odds. Although this is what he would have you believe in his introductory statement, (paraphrased here for easier reading), “This book takes its name from Edward O. Thorp’s 1962 landmark book, Beat the Dealer, who revealed the gambling industry’s tricks and traps by illustrating blackjack as a game, like Forex, with changing odds, and still managed to teach a successful method for playing the game of twenty-one.” Mr. Thorp was an MIT professor, not a casino owner. Mr. is a self described “manager of a successful currency fund” who is writing a book about beating the dealer. What does your instinct tell you? The last words of this book are, “… your gut feeling is your subconscious flashing you warning signs … and good traders learn to trust their instincts”.
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A PROFESSIONAL TRADER REVIEW’S “BEAT THE DEALER” While I found Patricia’s review from the perspective of a mind training interesting, what is valuable to me about this book, as a professional trader, is that it shed light on the behind the scene dealings that regularly goes on that new traders are not even aware of, and experienced traders don’t know about until it blind-sides their trade. It would take many years of trading to experience all the shifting sands that broker firms come up with, for in such an unregulated industry the self made brokerage rules are continually changing. Brokerage firms enjoy perpetuating the myth that Forex is a zero sum game -- when a trader wins, another trader loses -- but they conveniently overlook the fact that the brokerages with their various commissions, spreads, trading contests, rollover fees etc. make the lion’s share of the profit, not the average winning trader. Add to that the “engineered profits” they create while taking the other side of your trade. Even broker firms that claim not to be market makers (ie trading against you), frequently use semantics to cover up the real facts. Broker firms also have no responsibility to disclose the methodologies for making their profits, behavior that would be illegal OR unethical in other markets – and it would never occur to a new trader that this could even occur, clearly evidenced by the fact that more than 95% of all new traders blow up their accounts within one year. If you were a new trader and wanted to understand “how could this happen” this book would be very helpful in shedding light on a cloaked subject. If you are an experienced trader the only thing you would want from this is the answer to one question -- if Mr. Silvani is the manager of MIGFX (as he alludes to in his introduction but never quite states forthrightly) and a voice on the side of the trader, what “winning trader” statistics could he offer to suggest that MIGFX is any different in preying on small trading speculators than any of the other broker firms that he is denouncing? That would give trader a real reason to buy this book that would be worth the purchase price. And just out of curiosity, since the Swiss regulatory bodies have changed the game for MIGFX I would like to know how that is playing out against this brokerage’s story.
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