Without wishing to denigrate my current profession, I remember when I did my journalism course, I fell about laughing after my lecturer suggested that newspapers were a good place to check facts. I countered that whenever I read one that had something I knew anything about the journalist had usually got it wrong.
This rule applies to reports about financial markets generally and FX in particular. So I shouldn’t have been too disappointed when the Financial Times’ Alphaville looked at retail FX this week under the lurid headline: The $100bln FX hustle. Judging by the comments posted, it seems that much of Alphaville’s readership recognized the article for being a bit heavy on the headline excitement and light on the facts.
“Go to any of these sites — FXCM.com, Global Futures & Forex, Oanda.com, etc — and you will get the distinct impression that you are dealing with a warm-hearted, professional broker, where your interests are paramount. But in many cases the exact opposite is the case,” Alphaville warned.
Later the article purported to explain how retail platforms make money: “In its role as counterparty, the firm is taking bets from tens of thousands of customers across dozens of currency pairs.