Hacker News new | past | comments | ask | show | jobs | submit login

When I worked in Forex (~1999-2003) this was common practice, at least where I worked. Bring in customers, teach them the bare minimum, and let them trade with 100:1 (and sometimes 200:1 leverage). Even better, because 99% of customers lose, we would "assume the risk" of most trades, accepting their trades but not offloading them to larger banks (ABN, Deutsche, etc), so their loss was all profit. If someone demonstrated they were a decent trader (very, very rare), we would set a special bit on their account and, from then on, offload their trades to major banks at better spreads than we offered to the customer, making 5-10 pips per transaction. Most of the "decent" traders traded in huge lots (10-100 millions), so making 5-10 pips per transaction was substantial. Long story short, you make money on the crappy traders and on the good traders, and the good traders were even better because they would keep coming back.

Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact