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Who's the most dangerous? These styles are not set in concrete.

You ll meet some brokers who are obviously pushers while others • Our Reading List except for one: his pathetic track record, which is never discussed.

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• White Paper Archive may display a combination of styles. Of these four types, the true believer and the rationalizer are probably the most dangerous. If they • paper Tradrng/A^uack have your business, they do the most damage by hanging you on hope Email Newsletter for long periods of time while they leech the lifeblood from your Subscribe to °ur FREE

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account. They will eat away at your capital, your confidence and your desire to trade.

Is there a catch? The problem with the brokerage industry is not the calibre of individuals it attracts. Honest, intelligent, hardworking people are drawn to trading every day, and brokerage firms are a natural gateway into the financial world. Many successful CTA's and fund managers got their start as stock or commodity brokers. But that is exactly the catch: those people who evolve into successful traders inevitably move on to bigger and better things over time. So it is no coincidence that the vast majority of experienced brokers cannot trade. If they could trade, they would not have stayed brokers. Another large portion leave the industry because they are fed up with the internal conflict and sense of moral compromise. They are tired of seeing clients lose money day in and day out without fail. So who does this leave to be your friendly broker? You know who.

Am I detecting a conflict of interest here? Yes. The brokerage industry has a gross conflict of interest built in to the payment structure. CTA's and fund managers have interests in direct alignment with their clients, because they are paid as a percentage of trading profits. They only make money if the client makes money. In contrast, brokers have no such alignment. Brokers take their commission cut whether their advice is good, bad, or just plain useless. So it shouldn't come as a big surprise to you that, when it comes to measuring broker performance within the industry, the entire emphasis is on commission revenues generated -- as in: he generated a million two in gross commish last year - he must be a great broker. What about the profitability of his clients? Who are you kidding? The broker collects whether you win or lose. The broker expects you to lose, sooner or later, partly due to his high costs. Therefore, it is his job to get you to trade as much as possible, regardless of your best interests, so he can get his commissions before you burn out.

Is there any broker with integrity? We hope so, but what percentage of recommendations would you guess are actually based on solid analysis and firm conviction, rather than simply baiting a hook to draw in commission dollars? Zero would be a cynical answer, but sadly close to the truth.

Is there anything I can do? Absolutely, but, again, you'll wonder if all your work is paying off. Let's say you found the rare broker who is competent, knowledgeable, has a passion for the markets, and actually has your best interests at heart. He is probably new to the business, five years or less, and will not be staying much longer. Even with all this going for the relationship, there is one final obstacle to be overcome: You. In order to make effective use of your broker's skill to place your trades, you must have the emotional temperament and discipline to ride out your inevitable losing trades of your system. Your strong commitment to the process of taking each valid trade of your system and learning from it while without remaining diligent is crucial. In other words, to make good use of a broker, you have to be knowledgeable and skilled enough to not need him in the first place.

So are you saying I can do it myself: The final lesson is that if you are going to trade, you can never substitute someone else's experience for your own, or expect someone else to make up for your shortcomings. You must play your own hand, and ultimately dictate your own success or failure. This in itself ultimately makes the broker irrelevant.

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