Adrian Reid warns that trading bots (algos, EAs) and educators can be structured to profit from trading volume rather than trader success. He explains brokers and partnered educators often earn from spreads/commissions and kickbacks tied to high-frequency, high-leverage trading; this creates adverse incentives that may harm traders. Reid states he avoids relationships with brokers and does not teach forex, citing these conflicts of interest.
Chapters
If a broker is providing you with algo or a bot or an EA or something to trade, how is the.
Broker going to make money?
The broker going to make money by.
You making a lot of trades. So the broker can generate a lot of commissions or spread from your trading. Make sense?
Broker doesn't make money. If you make money, the broker doesn't.
Care if you make money.
The broker only cares that you trade a lot. In the forex world, in, in the crypto world and often in the stock world, these, these trading bots are all about generating lots of trades because the person that created the bot.
Profits from.
You making a lot of trades.
Now, many educators will sell or give away trading bots.
Because the educator has a arrangement with the broker so that.
The educator gets a kickback of a percentage of commissions. And this is very common in the forex world. I don't, I really hate this aspect.
Of the industry, but I could go.
To a forex broker and I have about 20 of them approach me every.
Single week to try and do a deal.
I could go to a forex broker and sign up an arrangement with them.
Where every student that I put onto their forex platform, they pay me 30%.
Of the spread that that student generates.
And then I would be incentivized to drive the students to generate huge numbers.
Of trades with high leverage so that.
I can make massive commissions and kickbacks from your trading. Does that make sense? But that's, you know, that's contrary. That, that's, that's against, that's an adverse incentive for you. Right? That's not going to make you profitable. It's all about my profitability.
So in that case, the educator is conflicted. They're not incentivized to help you do what works well. They're incentivized to make you do what works well for me.
So I actually don't have any relationships with any brokers as a, as a, as a policy.
You know, I don't, I don't trade forex, I don't teach Forex because it's a cesspool.
And I really hate that behavior. Behavior. So I think it's really important to.
Understand, you know, this, the person you're.
Getting something from, what is their incentive? You know, I don't have any incentive to make you trade more. I have an incentive to help you understand and become independent. So you'll hang out with me for longer. So you'll like, you know, you become empowered and you like the community. You value the community. That's my incentive. And I think that's a much better incentive than selling you a bot or you buying a bot that is incentivizing you to trade high leveraged very frequently so that, you know, I can make commissions.
