An FPA reviewer known as Sydneysider left a link to the article in The Australian in a review for CMC Markets. One of the review moderators passed it to the AsstModerator, and he asked me to write about it. I’d like to thank all three of them for giving me the opportunity to write this.
I have to admit that when I first read the article in The Australian, I thought it was pretty funny. Later, I realized that there was also a valuable lesson for traders in it.
Sometimes, forex companies get out of control. Sometimes, a company gets control taken away from it by regulators. Sometimes a company can’t control an urge to lie to clients. What happens when the tables are turned and the trader loses control?
One of the most important lessons of forex trading (or any other type of trading) is to lean to control your emotions. No matter how good your broker is, how good your software is, or how good your system is, the very nature of the market means that you will see at least some trades go into the red. If you panic and lose control of your emotions, your losses will multiply quickly. There’s absolutely nothing wrong with feeling angry, afraid, or upset if a trade goes badly. It’s perfectly normal to have these feelings when things go against you. Still, if you can’t restrain those emotions before clicking that mouse, you need to either learn better control or you need to find another way to make money.
Of course, dealing with a brokerage that you feel has wronged you can be maddening, but in one case, the anger went way too far. Last summer, an unhappy client of CMC Markets in Australia took his anger (justified or not) beyond legal limits.
Calling your broker and screaming is something I can understand and even endorse under extreme circumstances. If the managing director of your brokerage moves from a 1.5 million dollar mansion to a 25 million dollar (Australian Dollars – sort of like real dollars, but with a funny accent) mansion while your accounts are getting hosed, I could easily see that as a valid reason to become more than a bit disgruntled as a client. Even so, visiting your broker’s offices on 2 separate occasions and making threats against the managing director and his family isn’t a very bright idea. This particular investor got slapped with an AVO (apprehended violence order – Australian for “restraining order”) barring him from visiting the brokerage’s offices again.
Even though the CMC managing director in Sydney, David Trew, got his AU$25 million mansion and a restraining order to keep one seriously disturbed customer at a distance, that wasn’t the end of the story. CMC ended up having major staff cuts last year and in the fall, Mr. Trew ended up stepping down and leaving the company. Under the circumstances, I would not be surprised if former employees were not just as big a potential problem for him as unhappy customers.
I don’t know if this particular investor’s anger at Mr. Trew and CMC Markets was fully justified or not, but he definitely chose the wrong way to go about displaying his anger. There are plenty of perfectly legal ways to let a brokerage know how just how good or bad you feel about them.