| Retail Forex is the smaller segment for Foreign | | | | The means a reduction in profit margin, if the retail |
| Exchange Market. It is a segment essentially localized | | | | trader even makes a profit in the first place. |
| to the average you and me (also known as retail | | | | In the early 90s where retail trading was picking up, |
| traders) - people with substantially less capital to | | | | many people lose many from signing up trading |
| trade compared to Banks, Institutions, MNCs and | | | | account with dubious trading brokerages which are |
| Hedge Funds. The other notable difference is the | | | | poorly regulated. This has since been regulated |
| general lack of sophisticated tools to aid the retail | | | | globally, especially in the United States where any |
| traders, resulting in a significant lag in trading response | | | | forex brokerage companies must have a minimum |
| time, sensitive of trade to global events as well as | | | | capital of US$20m. |
| poorer risk management. | | | | With the advent of Internet that started in the late |
| It is widely believed that 90% of the retail traders | | | | 90s, technology has made in roads leveling the |
| lose money as a result of inferior trading methods. | | | | playing field in forex trading for the retail traders. This |
| In addition to the inferior trading methods, retail | | | | is in part recognized by the fact that there is more |
| traders in forex are also disadvantaged by either the | | | | retail forex traders who take up forex trading as a |
| high brokerage cost to trade or a wider Bid/Ask | | | | full time job, all in the comfort of their home! |
| Spread (usually set apart in 3 pips by the brokerage). | | | | |