The increased usage of auto forex trading has caused a dramatic jump in the number of retail forex trading accounts in the U.S. and around the world as suddenly the pond where only the whales used to swim has been invaded by tons of new bits and bytes retail forex accounts
Auto forex trading began just a few years ago but did not really become mainstream until the development of programs like megatrader and the opening of the foreign currency trading markets to the retail investor. Given the trading leverage afforded to retail investors and the availability of auto forex trading software is it any wonder that the foreign currency market has taken off this year?
Brokerages of all shapes, names, and sizes have sprung up all over the place and offer significant trade privileges even to accounts with as little as one thousand dollars. Some accounts are able to trade with leverage ratios of 200:1 or even 400:1 in some cases. For those readers not up to date with the parlance of currency trades that means that an investor with one thousand dollars could make transactions as though he or she had two hundred thousand dollars at the 200:1 leverage ratio. A gain as small as half a percent would result in earnings equal to the initial investment of $1000. Doubling your money for just a half a percent gain in a cross rate? It seems strange but it is happening every day.
The growth rate of retail currency trade accounts has been staggering in 2009. Estimates vary but over 30% growth rate appears to be the average in the first quarter alone. In previous investing cycles this sort of moths to the flame activity has drawn retail investors in only to fleece them when the market peaks. It will be interesting to see whether those using the auto forex trading accounts will fare better than those retail investors who got taken by the dot com burst and real estate bust.