This one way decline is not good for majority of the clients who cannot make profits unless they short but most clients as well advisers have a bias for long and always believe that currencies (or stocks) will bounce back.
However, as we have been advising our clients that investing in other currencies is not profitable any longer until the USD collapses.
5 year performance of select currencies (ascending losses):
JPY - USD 104.833 on 29 Dec 2013 and 110.251 today. Decline = 5.16%
INR - USD: 62.06 on 29 Dec 2013 and 69.81 today. Decline = 12.49%
CNY - USD 6.0410 on 29 Dec 2013 and 6.8754 today. Decline = 13.81%
EUR - USD : 1.3670 on 29 Dec 2013 and 1.1442 today. Decline = 16.2%
PHP - USD 44.445 on 29 Dec 2013 and today is 52.52. Decline =18.16%
AUD - USD 0.8910 on 29 Dec 2013 and 0.7041 today. Decline = 20.97%
CAD - USD : 0.9370 on 29 Dec 2013 and 0.7330 today. Decline = 21.77%
GBP - USD : 1.6450 on 29 Dec 2013 and 1.2698 today. Decline = 22.80%
MYR - USD 3.2890 on 29 Dec 2013 and today is 4.15. Decline = 26.1%
ZAR - USD 10.6740 on 29 Dec 2013 and 14.4190 today. Decline = 35.08%
BRL - USD 2.3850 on 29 Dec 2013 and 3.8802 today. Decline = 62.69%
RUB - USD 33.095 on 29 Dec 2013 and 69.574 today. Decline = 110.22%
TRY - USD 2.169 on 29 Dec 2013 and 5.2930 today. Decline = 144.03%
As we displayed above, every single major currency has declined over the past 5 years.
In this scenario, it is most difficult for clients as well as online brokers to make any profits.
Most brokers do not make any money because online commissions have been dropping for decades and now are almost close to zero. Suddenly, any law change, sanctions, extreme decline in any economy/currency or high volatility can literally wipe out and shut any brokerage.
Some of the brokers cut corners to survive, some sell illegal bit coins, some simply do money laundering but all of them eventually get caught.
However, what is surprising within the last 2 months that across Europe, Russia and Africa, hundreds of online trading brokers have been shut in 2018.
Hence, we suggest all clients to remain extremely careful of online brokers.
Do your due diligence, go only with larger size brokers who have revenues in millions, prefer banks over any other brokers or go with the Top 5 brokers only if you wish to use any.
This week, Russia closed almost the entire online brokerage industry in the last 2 days. Only 2 have survived who are owned by the top banks.
Last month in Bulgaria, the Govt shut 40 FX online trading sites:
Tanzania is planning to close 150 FX brokers:
Tanzania even shut 5 small banks earlier this year.
France has shut 138 online brokers over a 3 year period:
Cyprus has revoked licenses of more than half a dozen brokers in the last few months. This is just one example:
Several companies have shut in DIFC, Dubai as well and this one in particular opened operations in 2017 and shut in about a year, last month.
Several online FX brokers have also been shut in UK by the Govt. This is just one example.
1 major broker in UK was forced into voluntary liquidation by the UK Govt last year in 2017.
IKON Finance exits Retail Forex amid FCA restrictions, transfers clients to Hantec Markets
Last year, in 2017, the largest online FX broker in the US also collapsed and went bankrupt.
Philippines has issued an alert not to deal with any online FX brokers.
In Australia also some brokers have lost their trading licenses and been shut.
There are a few brave souls who are still opening new FX online brokerages but for the vast majority it's a tough market whether for stock brokerages, hedge funds or online FX trading.
We wish all of them good luck until the Govt comes knocking!
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