As you can see, lot of changes and features coming out there. Guys from development team starts new project, and we are part of it as a signal providers. For this reason let me introduce one of the youngest part of financial services.
Network trading is a model of trading, where traders, signal providers (SP) are connected with investors, which would like to participate on trading skills and trading strategies. All of these participants are creating trading network. SPs on the one side and investors on the other side. And somewhere in the middle is network provider.
Benefits for all:
SPs have interest to share best signals for investors, and benefit from service fee.
Investors need best trading signals for funds allocation, which can brings income.
Network providers have fees based on commission from brokerage firms.
it seems like win-win-win situation for all of them. But many times in real world, things are not how they look like. And I would like to talk about responsibilities of all participants. First think what I have to say is, that I have been discovering this type of financial services about few years. To be honest, there was not much to do, when whole industry exists just 7 years, but in this time people have enough information to compare with another types of investments.
What´s the point and how trading networks started?
Trading networks started as an alternative investment offer to investor option to chose best performance traders and create something like a virtual trading desk. What a great idea Isn´t it? Well, idea is pretty good, but there are a few problems. Are these investors able to create virtual trading desk, without trading experience and knowledge of trading behavior? Are SPs confident enough work as a trader on trading desk? Are the network providers able handle selecting process and offer solid condition for SPs to bring just best talents to network? All of these questions were answered in beginning. They are not, yet.
I have few numbers from previous investigation and I can say that lot of brokers grow up on investors accounts, lot of SPs took a lot of money from investors, but on the end of the day, funds in trading networks past year all around the world are decreasing and transaction volume is increasing as a result of bad trading behavior. this is the worst business indicator ever. Well, somebody can say it´s just result of financial situation in crisis, but my opinion is different.
Take this article as a short introduction of network trading. in next parts, I will explain how system works, and why is not effective enough. I will explain systems of evaluation, trading selecting process and bad behavior in this industry.
In the end I would like to say this. I don´t know if Dukascopy want to participate on this industry. I just want to share my view of current situation in this business. If Dukascopy will join then I hope they will make things better. This industry will grow as a most progressive part of financial services. I am sure about that.