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ESMA, broker Education and Professional Trader client acquisition in Europe

The recent developments in the Forex industry regulation in the European Union have had a pretty interesting result. The industry has become more closely regulated, with requirements being imposed both on the brokers and the traders, as a way of protecting both sides from each other and themselves. The introduction of the professional trader concept into the industry has caused some nice changes but limited the abilities of the traders. Let’s talk a little about these limitations and see if we can find a way to make these limitations work for the brokers and traders out there.

ESMA regulation

The ESMA regulations introduced into the industry have been extensive and contain a lot of details regarding trading and incentives for Forex and CFD trading. The good news is that these regulations are a way of protecting the traders form themselves. To get more specific on the subject, most of the ESMA regulation introduced was related to preventing inexperienced traders from being incentivized to trade large amounts of capital. This was done in several ways:

  • Prohibit monetary rewards aimed at incentivizing individuals from trading. No deposit bonuses, large volume trade bonuses or otherwise monetary rewards for trading with brokers has been prohibited in the EU.

  • Limiting Introducing Brokers (IB) in how they operate. This means limiting the conflict of interest situations between IBs, clients, and brokers.

  • The introduction of the Professional trader concept for retail brokers and the limitation on the leverage available to all retail traders not classified as professional traders.

There are, of course, other rules and limitations being imposed on the industry. While we would like to go into more detail about them, these are the regulations currently affecting the relationships between brokers and traders.

The regulations above are a way of preventing inexperienced traders getting caught up in offers that brokers are making. The offers are not in any way misleading or dangerous, but the problem of inexperienced traders being unaware of misusing them and ending up losing a lot of capital was real. But now that the traders have been limited, the brokers have ended up either losing clients or being unable to break even in their services. So what is the solution?

Brokers, Education, and Professional traders

One of the important aspects of the ESMA regulation is the concept of Professional traders. Professional traders are people who need to qualify for a certain standard - whether this is experience or access to large capital, it is a standard that has to be met by a trader before they have access to high leverage trading. These are the kind of traders that brokers would really be making money with. But how do you get a hold of these people, after all, professional Forex traders are a limited resource?

One of the ways that some brokers have started exploring is a mid to long term solution that will be providing a number of people with the ability to become professional traders. What they are doing is educating traders who want to be educated, in order to help them closer to becoming professional traders. Education resources such as this are positive action towards encouraging the Forex industry to move from one where many people stumble into knowing nothing, to an industry where trading is beneficial to most participants. So what are some of the initiatives that brokers are taking in order to promote Forex education?


Elite CurrenSea is a trading education project headed by Nenad Kerkez & Chris Svorcik that has partnered up with XM, another Forex broker, to start providing in person and online seminars to their traders for free. These FX and CFD seminars are aimed at helping traders of all levels. Whether these are beginners or advanced traders, the seminars are able to provide information and knowledge that would not be easily available to them. The seminars are conducted as live events, all over Europe, while also being streamed online. The speakers at these seminars are longtime professionals and educators, who have made it their goal to help the market participants become more responsible and professional in their trading.

The events started in mid to late 2018, and are going to start up again on the 16th of February. There are four of them coming up in different cities all over Europe:

  • Utrecht - February 16th (already happened)

  • Prague - March 9th

  • Zagreb - Mid March

  • Belgrade End of March

The events are free to those who are interested in them, though the registration to attend them live is limited. The point of these seminars, according to ECS, is to increase the knowledge base among their users. They believe that the best way of assisting the average user to become a professional trader is to provide them with education. Highly educated and informed traders are able to make correct decisions on the fly, resulting in them acquiring large capital and better experience over time, which in turn will result in them being qualified to be Professional traders.

Positive action towards creating professional traders through education provided to them by brokers is something that should be encouraged in the industry a little more. The actions that ECS is taking are resulting, already, in better trading practices among their clients and will further foster better and more profitable trading in the future.

HotForex and BlueSkyForex

Another example of positive action towards educating clients would be the collaboration between HotForex and BlueSkyeForex, two popular brokers in Europe. The collaboration has resulted in a number of online webinars being created for the benefit of users, available both to their clients and others. These webinars are conducted on a regular basis, with some being repeated just in case a curious user was not able to attend one or the other. The subjects covered include:

  • Live Analysis

  • Wolfe Wave trading

  • Scalping Strategies

And other advanced techniques that would be useful to any trader looking to start trading on the markets. This type of always available education, for free, shows that the company understands the role of education in the creation of future professional traders for themselves and the Forex industry in general.

Final Thoughts

One of the best ways to create a base of Professional Forex traders under ESMA regulation is for brokers to educate their traders themselves. A highly educated trader is capable of spending more time trading without losing their capital, while also multiplying it. Using this education to further themselves in the industry will enable them to fulfill the requirements for Professional Traders and thus increase their trading leverage and volumes. This would allow them to be successful, for sure, but also just as useful to the Forex brokers creating the professional traders by providing education.


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