It’s been calculated over and over, but the general consensus is that 70% of traders who enter the market end up by the wayside in a very short period of time. The cause has been blamed on trading without a roadmap, or without experience, or whatever the common excuses are… but the bottom line is those are just excuses.
Although it’s not the fault of the FCM, it ends up hurting the purse of everyone involved. FCM’s invest so much time in dealing with account opening matters, and customer service for the clients, who fall off three months down the road. On top of that, for the time the client spends trading, they’re usually trading the lightest allotment possible to minimize the risk to their account which will inevitably dwindle.
Discount clients only learn by doing. They can practice on a demo until kingdom come, but when they put some real skin in the game the rules change. The broker is now caught between a rock and a hard place. They want the clients to succeed on their own so as to keep piling up the commission payments, but can’t really give the struggling discounters active trading advice. The experience those discounters gain, comes at a price too large for most.
In Companies Don’t Succede – People Do! Grahm Roberts-Phelps writes “Customer retention and satisfaction drive profits. It's far less expensive to cultivate your existing customer base and sell more services to them than it is to seek new, single-transaction customers. Most surveys across industries show that keeping one existing customer is five to seven times more profitable than attracting one new one.”
An Article written in Sales & Marketing Magazine states that “new accounts are 133% more expensive to sell than existing accounts.”
FCM’s don’t really need to sell their clients, the clients purchase at will …repeatedly, BUT we do need to KEEP THEM BUYING!
This statement is supported by ASI research that states “when branded promotional products are integrated creatively into a customer retention program, the chances of retaining customers are substantially increased”
With such a large attrition rate , most FCM’s find themselves in an endless loop of finding cost effective ways to drive new customers, when the most cost effective way is really the most obvious:
KEEP YOUR CURRENT CLIENTS, AND/OR FIND A WAY TO ENTICE PREVIOUS CLIENTS TO RETURN.
This is precisely where (Gateway Q Security LLC’s) Excalibvr Emini Trading System and you can scratch the backs of one another. With Excalibvr Emini Trading System even the most novice of market traders can learn to profit, not by studying market strategy and theory (though we still encourage such learning), but by implementing a strategy of consistently taking small profits from secure trades.
In Value innovation: The Strategic logic of high growth, W.C. Kim and R. Mauborgne analyzed differences between highly successful companies and companies with lackluster performance. One of the conclusions says "The High Growth Companies and Industry Leaders paid little attention to matching or beating their rivals. Instead, they sought to make their competitors irrelevant through a strategic logic called value innovation.
Most people want to swing for the fences, hit an “out of the park trade”, but our philosophy is simple…
Take a small consistent amount of profit on a consistent basis, extending the trades when the market allows, and taking heavier contract allotments when the probablility of success is the highest.
When we break it down its very simple (In order of Importance):
#1) Place trades that consistently (through statistical analysis) have a higher probability of success. (Excalibvr Emini Trading Systems Direct Orders) .