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Learn to Trade: A micro-ethnography of a foreign exchange trading scheme

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Introduction:

Across the internet and on various social networking sites the opportunity to become economically independent by learning to trade is being advertised to millions of people. Of the many who are tempted by the promises of such schemes, at least 10% fall victim to a fastidiously well-planned marketing campaign and end up spending thousands of pounds in the hope of becoming hungry, driven and successful ‘fat cats’ in the making (Goodley, S.2012).

Learn to Trade is one of these schemes and is the brainchild of a supposedly world-famous foreign exchange (forex) trader Greg Secker. His business is dedicated to the teaching of first-time traders of how to become rich through the market trading of international currencies. It is my view that Learn to Trade embodies a ‘spirit of capitalism’, that in the pursuit of profit, overlooks the afflictions of the customer (Weber, M.2002). Through the selling of an audacious pipe dream, Secker’s Learn to Trade scheme, advertised on social networking platforms, performs a financial model that overlooks the need for moral transactions. Foreign exchange rituals, as taught by Secker, perform and produce the existing external economy through the commodification of abstract risk. In the case of Learn to Trade, I question whether customers are taking on risk ‘voluntarily’, or if they are being successfully coerced into taking on a risk that they do not wholly understand. My aim is to examine the risks of investing in the market and how those risks are being further abstracted by an aggressive marketing campaign characterised my misinformation and the fabrication of a trustful relationship.

Methodology:

I came across Learn to Trade numerous times whilst scrolling through social media platform, Facebook. Between content, the advertisements for this lifestyle trading opportunity were persistent, and so my interest in trading heightened exponentially as a result my exposure to the short videos. In each advert, the founder of Learn to Trade, Greg Secker, a rather slick looking middle-aged man, boasted of his experience and knack for foreign exchange trading. He promised that by his teaching, and through his company, Learn to Trade, anyone could pick up the tools to make quick and easy money. Secker invites anyone, whether you are a “first time trader or not”, to join his free-of-charge online webinar in which he will reveal the “proven strategy” that has led to his success. Although sceptical at the proliferation of pyramid schemes on all social media platforms, I was intrigued and decided to take up his invitation. I was eager to see if someone with no experience of foreign currency exchange could learn to make thousands in such a short period of time.

I proceeded to sign up to the online ‘webinar’, in which Secker himself would reveal his secret formula for success. The webinar ran for just over an hour, and I can safely say that what was promised on both the adverts and for the first 40 mins of the lecture, never came to fruition. Secker promises listeners that he will “get down and dirty with the content”, that he will reveal how he “became a multimillionaire in his 20’s and retired at the age of 27”. The majority of the session was spent describing what he ‘we will do’ rather than ‘how we will do it’. He starts by painting us a picture of success. He says, “you probably all know me as Greg Secker, the world-famous Forex Trader from London.” Countless tag lines such as these come thick and fast. Eventually, after a seemingly endless introduction of ‘setting the scene’. Secker presents his software, ‘Smartcharts’. This is our ticket to becoming a ‘Lifestyle Trader’. He runs a brief simulation to show how he ‘won’ £8,000 in 30 minutes. In this, Secker never actually shows us how to emulate his strategy, he only shows how much he is making over the half an hour period: “It’s going quite well, look here, up to £5,900 at the 22-minute mark.” He doesn’t actually reveal any sort of strategy, only showcasing the success of said strategy. Next, he gives a brief description of what the key terms mean and how his strategy aims at buying at the lowest price and selling at the highest price. I remember thinking that this wasn’t a masterplan for making money, it was just common sense and basic market principle rather than a strategy for success. At this point, he presents the opportunity to receive a free strategy call from one of his associates. He assures us that “it is not a sales call; it is a coaching call.” There are only twelve slots available, and so he urges us to be quick and to sign up “now”. In all, the webinar was nothing more a than hard sales pitch for his training courses, that would require large investments from listeners. At the end of the session the real purpose of the webinar is revealed: his 8-step training programme which totals a cost of over £10,000 for each candidate.

The following day I received my strategy call from one of Greg Secker’s “top traders”. The phone call, which had promised to deliver a clear strategy on how to start trading foreign currencies and to assess whether I was truly made out for this programme, turned out to be nothing more than a price negotiation. Once I told him that I was a student without much money he immediately reduced the price (a few times). He said, “I’m afraid, in order to make money you have to spend money”. The original £10,000 investment was greatly reduced to around £2,500. The preceding webinar appeared to be major ‘up sell’ aimed at luring unsuspecting social media users into a vastly overpriced money-making pyramid scheme.

The next phase of my research was to have a go, myself, at using his proposed ‘strategy’ on popular trading platform, Etoro. Etoro is free to sign up to through gives you the option to use actual capital to trade on real markets, or to use the trading simulator, which uses only virtual capital. I did this a few times attempting use his ‘strategy’ and emulate his challenge of making £8,000 in 30 mins. I was unsuccessful on nearly every attempt. At this point, I doubted my ability and I briefly thought to myself that perhaps the training was necessary. Following this inclination, I decided to scrape numerous news media sources to find interviews so that I could learn the personal stories of individuals who had paid for the training. What I found was that the vast majority of first-time investors that had ended up paying in full for the training were dissatisfied and generally out of pocket. Raghav, a student who has lost upwards of £7000 as a result of Learn to Trade says that “they made it look so good. I forgot about why I came along, which was to learn.” (Shannon, L. 2018). This got me thinking about the sociality of money and what makes certain people susceptible to such schemes. I wanted to know more about the morality of money transactions, and if, as a staple manifestation of financial capitalism, foreign exchange trading schemes help to accentuate individual economic hardship.

Analysis:

As a derivative market, foreign exchange trading serves to circulate and objectify abstract risk (LiPuma, E.2017). This is more widely referred to as the commodification of abstract risk, whereby economic agents are voluntarily taking on risk based on market volatility through the buying and selling of futures, stocks and shares etc. Forex traders do this by betting on the price movements of a currency pair, which involves a calculated risk.

The Learn to Trade initiative serves to abstract the real risks to amateurs by feeding/selling them a formula for success and cutting out the need for a deep understanding of currency fluctuations. The concrete risks, such as any social or political phenomena that might affect market movements are either removed, accounted for or enveloped by this strategy. Or so we are told. Secker assures us that “all the things like Boris Johnson, Trump, Brexit, change the market temperament” - and that we “need a strategy that accounts for this.” Secker is banking on the idea that his customers want to make money easily and have little or no prior knowledge of what influences the market. For example, Kerry, who paid a total of £2396 for Learn to Trade’s training, said that “presenters hugely exaggerate the ease with which delegates will be able to make large profits” (Goodley, S. 2012). Similarly, Justin, who also spent over £2000 on Secker’s training programme, makes a joke at Secker’s expense, asking a hypothetical question of Secker – “Sir, why is the EU spread so big?”, to which Secker hypothetically responds – “EU is an exotic. Haven't you learned that in the 25k course you just paid for? Now shut up and get to work. Row maggots, row!" (Anonymous, 2017). Like so many of Learn to Trade’s disgruntled customers, Justin and Kerry were left feeling robbed; some candidates claimed to be pursuing legal action against Secker (Anonymous, 2016). But, how does Secker lure these people in?

The process is to abstract the element of risk from the social, economic and political circumstances that defines the situation (LiPuma, E. 2017). Over the years this process has been institutionalised by generative schemes, such as Greg Secker’s ‘Learn to Trade’. In other words, Market makers, such as Secker, have “continually shaped and reshaped derivatives to help mute the risks… and mask the forms of uncertainty that loom on the horizon” (pp. 52). Therefore, Secker – with his Learn to Trade initiative – is indicative of a financial community that detaches risk from the vital social context. It is the objectification of the totality of risk that defines the derivative markets and is the process of abstraction. “Agents who participate in these markets do not recognise or accord social character to risk: rather risk appears to be the objective and formal output of exogenous factors such as macroeconomic forces” (pp.55).

One of the key methods used to abstract the risks of currency trading are the promises of high profits by working only a few hours in the morning. With Learn to Trade, the adverts, the webinar and the follow up strategy call were clearly designed to convince customers that they would be making safe and secure financial movements through investing in currency trading. This is a practice known as ‘hedging, whereby economic agents are investing in order to reduce risk or avoid practical risk. In both the adverts and the webinar, viewers were assured that the safest possible way to get into trading was to use Learn to Trade’s proven strategy, but at the same time they would be promised the high profits/benefits that arise from a practice known as ‘speculating’. Economic speculation is investing by voluntarily taking on risk in the hope of achieving high profits but with a high chance of loss. This is the fundamental difference between hedging and speculating. Essentially, Secker’s aggressive marketing techniques involved luring customers into a false sense of security; causing them to think that they were hedging their investments, as opposed to speculating them. The high risks associated with economic speculation were disassociated from their potential rewards and replaced with the low risks associated with economic hedging. The risks of speculating were hidden from view; disguised as a more secure form of arbitrage (Miyazaki, H. 2003).

Another form of risk abstraction that became obvious to me was the use of a ubiquitous marketing tool that advertises delayed payment for a service. Secker uses this heuristic method in allowing his customers to “consume now and pay later” for the services of Learn to Trade (Dunn, E. et al. 2011). This is reflective of a perennial transition in our economic system: a move to credit payment. Credit payment delays the immediate shock of being out of pocket. It also renders the necessity for physical cash exchange redundant. This is another form of risk abstraction, as through the none handing-over of hard cash, the customer does not have to suffer the immediate consequences. The problem with this is that it “leads people to engage in short-sighted behaviour—to rack up debts, to save little for retirement, etc. In the end, the piper must be paid, and when that happens, lives are often ruined” (pp.120). This is certainly the case with Learn to Trade, as multiple customers ended up paying for the 8-step training programme and realising later on that the money could have been better spent elsewhere. Laith Khalaf, a senior analyst at Hargreaves Lansdown, supports this notion, saying that “Buying and selling currencies is a risky business, and isn't an area for first-time investors. Getting rich slow is a far more reliable strategy than getting rich quick, which can often lead to rags rather than riches” (Shannon, L. 2018).

Whilst Simmel defends the notion that money frees people from dependency relationships, a new form of relationship has emerged in their absence (Simmel, G. 2004). These are relationships that are contingent on the existence and universalisation of money. The relationship between Greg Secker and the customers of Learn to Trade, for example, is contingent on the mutual pursuit of economic success. The monetary transactions that result from the Learn to Trade scheme must be seen in terms of the social relationships and the obligations that underpin them. The fastidious nature of Secker’s marketing campaign helps to develop trust between the customer and the programme as a whole. Secker attempts to draw us in, to break down the walls of uncertainty by showcasing what we stand to win. He presents us with an amazing opportunity to be as successful as he is; to drive fast cars, own helicopters and to work for only a few hours in the morning. Early on in the webinar Secker says, “to say that I amassed lots of friends in a short space of time is somewhat of an understatement”. Here, Secker is selling the experience of a trader. He is encouraging his viewers to invest in and experience the ‘lifestyle’ of a successful forex trader, thus partaking in what is referred to as the experience economy (Pine, J. et al. 1999). Of a survey taken of 1000 people, 60% of respondents showcased greater happiness from their experiential, as opposed to material, purchases (Dunn, E. et al. 2011). Dunn posits that, “…almost anything we do to improve our connections with others tends to improve our happiness as well— and that includes spending money.” (pp.117). Therefore, as our social relationships are such a strong determinant of our happiness, the Learn to Trade scheme is looking to capitalise on this by promising to deliver more lucrative social relationships on top of material gain.

Karen Ho, whose ethnographic research stretched for over 17 months in some of Wall Street’s major investment banks, stresses the importance of the individual in ‘performing’ the financial system (Ho, K. 2009). This contrasts with a dominant narrative that Wall Street is “detached and abstracted from the lives and concerns of most people” (pp. 178). She focuses on how institutional and financial cultures are demonstrated by the biographies and the actions of individuals. I found this to be the case with my ethnography, because as a financial institution, Learn to Trade is dedicated to connecting “most people to the markets”, so that ‘everyone’ can reap the rewards that are so readily available to them. Moreover, the specific biography that substantiates this message is that of CEO and founder, Greg Secker. In both the advert and the online webinar, Secker’s story of success is referred to on numerous occasions. His portrayed persona and lifestyle are performing and producing a culture of financial capitalism. Secker presents himself as “someone who does everything at 150mph” and is at the vanguard of latest market trends. He says that we could be like this too, appealing to those of us who are “diligent, self-disciplined and at all competitive” to let him deliver this “slam dunk” of an opportunity. Secker is adhering to what Ho categorises as the ‘fetishization of hard work’, whereby an internalised sense of hyper efficiency and responsiveness to market trends performs and produces the current economic model. Greg Secker is offsetting the blame of his success to his lifestyle and the habituation of these virtues and breaking down our sense of trust related risk. This process is also known as ‘indexing virtues’ and is a means of spiritual satisfaction and/or ego satisfaction in an increasingly amoral economic environment (Lebow, V. 1955).

Secker tells his viewers that being successful through trading is actually, still a very moral way of making a living. He shows us how he has used his wealth through trading to help build a village in the Philippines that was destroyed by a hurricane in 2013. This is an example of ‘financial ministry’, which aligns moral behaviours and outcomes with the accumulation of wealth (Zaloom, C. 2016). Specifically, Secker is encouraging participants to accept market pressures and the forex trading lifestyle, because it coincides with ethical commitments. In her own words, Caitlin Zaloom argues that “contemporary market activities and financial practices gain ethical purchase in everyday life by transcending the economic sphere and facilitating ethical work.” (pp.326)

Conclusion:

Ethnography helps us to gain insight and gather information about everyday life, and the people that constitute its meaning (Hartman, D. 2003). We are able to learn – and so understand – the inner workings of people, places and things in real-time and space. The purpose of this ethnography is to look closely at how the scheme works in building trust relationships, and how Learn to Trade relates to theories of economic performativity and risk abstraction (Ho, K.2009). My research has led me to believe, whilst positive reviews of Secker’s Learn to Trade scheme do exist, that the vast majority of his customers are victims of these numerous forms of risk abstraction. I would argue that elite financial actors, such as Greg Secker, ultimately “shape a world of socioeconomic inequality, insecurity, and crisis.” (Ho, K. 2009. pp.178).

Appendix:

Due to government-imposed restrictions as a result of the Covid-19 outbreak I was unable to conduct face-to-face interviews with people who have crossed paths with Greg Secker and/ or his Learn to Trade marketing campaign. Instead, I used multiple sources from the news media and numerous online reviews to conduct my research and found that there was more than enough material to investigate this subject academically.

Online Sources/ interviews:

Screenshots of Secker’s webinar session showing multiple forms of risk abstraction:

1). The Learn to Trade initiative serves to abstract the real risks to amateurs by feeding/selling them a formula for success and cutting out the need for a deep understanding of currency fluctuations.

2) The Sales Pitch: the 8-step training programme.

3) Proven formula for success. Abstracting the risk from the social context.

4) The Strategy Call sign-up.

Bibliography:

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