FXBees.com is yet another social networking website aimed at forex traders.
I checked it out recently and it seems to be a stripped down version of Currensee.
Personally, I’m not really a fan of social networking sites, even if it is related to trading, but the success of Currensee has definitely opened my eyes a little, even though I’m still not totally convinced.
Ok, so what’s there to like about FXBees.com? Well, firstly, they allow you to open a live account with a broker. At the moment they only have one broker, but this will increase over time undoubtedly.
So, what this means is, the trading activities of all members will be published in real time, and are based on real trades. So you can easily identify real traders, this helps you to improve you trading, potentially. If there’s a trader you like, you can become their “friend”. And what’s more, you can sort traders by how good they’re performing. This feature therefore, is quite powerful, since it’ll be easy to make friends with the good traders.
And if there’s a particular currency pair you like, you can see which traders are doing well on which pairs. Which, in theory, is pretty cool. So in real time – you know who’s trading what. However, this can also be rather dangerous. What can happen is that new traders can fall into the trap of blindly following other traders and copying their trades, without knowing the reason or strategy behind it. This is definitely a major issue, and it is for this primary reason why I’m not too keen on forex social network sites. With forex forums however, at least there is a discussion and explanation about different forex methods, and reasoning behind trades. And even though FXBees does have a forum, in my opinion most new traders won’t even bother with this, because they’ll just wanna quickly enter the latest trade that Trader XYZ has taken.
Unfortunately there is also another disadvantage. Most of the trades and results are based on demo accounts. Everyone knows not to trust demo account results. Ok, they may give an indication. But I have seen literally hundreds of cases where people simply can’t replicate their demo results in a live account. And if you’re trading the lower timeframes, especially when scalping, it becomes almost impossible, unless you’re very skilled. So now, a new trader looks at Trader XYZ and thinks, wow, this guy is making 1000pips a month! And then starts copying his trades without thinking. This is real bad news. Way too risky. A bad way to trade. A step in the wrong direction. The new trader will most likely wipe his account and then blame XYZ. Everyone has a responsibility. Forex sites, experienced traders, and new traders.
Overall I would say FXBees has promise, but it needs to eliminate demo accounts, and it needs to stress the dangers of blindly following other traders. Sites such as Currensee also have a duty to stress this danger – and not pretend to everyone that what they’re offering is the best way to trade. It’s not.
Michael,
Thanks for the post and the mention of us (Currensee).
There are a few points I want to clear that IMO are a key distinction between a community and a social network.
1) Privacy – You choose who you are sharing the data with – As oppose to communities like this where your information is public domain, Currensee, and other social networks, don’t publish everything to the entire world and in fact we are very protective of our traders and make sure they control who they share their real trade with and how much information is shared. This seems like a minor point but it creates a comfortable and safe environment for trader to collaborate.
2) Transparency – Demo vs. Real account – as you have correctly identified the support of Demo account in FXbees and other sites that claim to be a community of traders clutters the reality and build an environment that fosters fraudulent activities – I just wrote about this issue in my post about StockTwits (http://blog.currensee.com/2010/06/stocktwits-just-a-bunch-of-twits/) and I think it’s important especially given the numerous Ponzi schemes that are discovered every week to demand transparency. We have not let any demo accounts through our Social Network and despite the feedback we got from traders that were trying to get in we feel that it’s important to stay transparent and have the traders that participate know that all the other traders are also real traders that linked at least real account
– Asaf.