What would you do if 90% of people in your database loose their money in the first month?
Thats a question brokerages ask themselves and I will show you how they capitalize it.
First of all brokerages are companies like any other firm that is out there. Its solely profit driven. But how do they make money?
There is different income streams brokerages can profit off. I will show you two of them. The first would be sales commissions and the secondly the money they get from entering and exiting positions.
Sales commissions are pretty straight forward you pay a fee per trade. When you buy and sell both times you pay the spread.
But what about the other one? Well, if 90% of traders fail you can just enter positions contrary to what 90% of your users are doing its all well documented in a database. You just bet against the petty losers. And to guarantee that, you pay a bullshit spreading trading educator who is pretty good at marketing shit. Good traders wont have to do marketing because they earn well enough trading. But what about bad traders? You guessed it: they become snake oil salesmen. They will tell you to trade as often as possible as big as possible to get better payments from brokers because, again brokerages get money from sales commissions on buying and selling trades. Thats the service they give you so they do everything to maximize those parameters.
Just to make it clear if 90% lose you have to make sure that more and more traders get introduced to trading so that the brokerages can keep making money. Thats why most of the money they earn goes straight back to marketing(trading educators). Just to guarantee that the ever flowing stream of freshman traders doesnt dry up. If they dont get new clients they dont make money simple as that.
“Thats all good mate but what about the winners?“ You might ask to yourself now.
That is also pretty simple. They are the examples that keeps their narrative alive. That you actually can make good money with trading. You cant profit off them winners so much but you can use them as testimonials to push more sales. They use them as bait to reel in new guys to pay them lunch.
Be the winners guys, make them pay your lunch!
I hope you find that kind of information interesting because I did when I found out about it the first time.
If you liked it upvote, comment and follow. Maybe even reblog it so that more people can find out.
- Lazytrades
