Most people were enthralled by the tale of Harouna Traore.  Let’s unpack this.

Harouna Traore’s Wild Demo Account Ride with Valbury Capital is a news story that seems more like urban legend than anything else because the math and story do not come together and form any sort of coherence.  To a general audience, this seems perfectly normal because they do not understand the logistics, but to anyone who has ever been in the FX Market it seems like a fantastical and nonsensical tale.  Let’s break the story down piece-by-piece because it is a story that makes absolutely no sense whatsoever and the full story has clearly NOT been told.

Who is Harouna Traore?

Harouna Traore of Paris, France is a former Sales Executive at Thomson-Reuters and Quantitative Sales Specialist at FactSet Research Systems.  He is a nice, educated guy who wears glasses and has a family.

Harouna Traore after exiting Thomson-Reuters decided to try his luck in the derivatives market and become a day trader.  Traore decided to put up roughly $23,000 USD into a trading account with Valbury Capital after taking an equities futures trading course.  (This story will go to show how horrible these courses are.)

What is Valbury Capital?

Valbury Capital is an FCA regulated broker based out of Indonesia with an office in London.  They provide derivative brokering services (FX, Futures, Commodities, and Equities).

They offer demo accounts to traders, which requires less information than a depositor would provide (their application form in PDF format).  The only promoted demo account platform on the Valbury Capital website is MetaTrader 4 (MT4), which is the most widely used FX and CFD Trading Platform in the world.

For those unfamiliar with MetaTrader 4, brokers operate separate servers for Demo and Live Trading.  To sign into a Demo Account, there is always a Demo Account signifier for the account in the name.  Why is this a big story in the United States?  General unfamiliarity with the world of derivatives trading as it was decimated in the United States with the passage of Dodd-Frank in 2010.

Valbury Capital has clear Demo Accounts demarcated.  It takes quite a bit of clicks to even get to the ‘Open a Demo Account’ link and that requires the completion of a rather general form.

There’s a lot to this story that does not make a whole lot of sense.

Traore was familiar with the Demo Platform, but there are inconsistencies

According to the Financial Times:

According to CNBC:

According to Financial Magnates:

A bit of a different story from CNBC as they make it seem like he was using the Valbury Capital trading account in conjunction with the class.  Financial Magnates establishes that the demo account with Valbury Capital was opened after the course much like what was stated in the article by the Financial Times.


What is apparent no matter what is that Traore was familiar with MetaTrader 4 platform (or whatever platform it was) enough to use it for demo trading and feel confident enough to deposit funds.

Traore continued to practice in the demo account even after making a deposit.  The question remains, “Why?”  Why did Traore deposit funds and place manual trades in a demo account anyway?

The timeline becomes fuzzy as things turn negligent on both sides and one party even admits to falsifying information (possible fraud), but first let’s go through why nothing here makes much sense.

Trading in a Demo Environment… or so he thought?

This is where Traore runs a loss of more than 1 million Euros thinking he was in a demo account.  How much fake money was in the demo account that Traore was trading that he would be able to hold positions that add up to 1 Billion Euros at once?

How much leverage did Traore have set for his account?  There are leverage limits and default levels.  This is a detail that is not included in the story because journalism is dead in 2018.

Turns out all of the trades he made were real.  We need to examine Traore’s account and amount that was actually traded.

Traore put all of his 20,000 Euros to be traded in one account (this is a massive no-no as is).  How does someone with 20,000 Euros control a total of 1 Billion Euros at once and bring about a loss of 1 Million Euros?  

Examining the leverage amounts that Traore could control:

  • At 50:1 Leverage, Traore could control a maximum of 1 Million Euros.
  • At 100:1 Leverage, Traore could control a maximum of 2 Million Euros. (This is Valbury’s maximum leverage.)
  • At 500:1 Leverage, Traore could control a maximum of 10 Million Euros.
  • At 50000:1 Leverage, Traore could control a maximum of 1 Billion Euros.  (No broker provides this leverage.)

To be able to control 1 Billion Euros at once, Traore would need 2 Million Euros in his account at 500:1 Leverage.  He lost 1 Million Euros on an account that was supposed to have 20,000 Euros.  Where this gets even stranger is that since he is manually trading these positions, he is entering the number of lots he wishes to trade.  He traded in demo environments and attended a class that supposedly taught him how to trade, he also a Risk Management Professional in the Derivatives Market.  Surely, he would know that something did not add up.  He would have margin called several times over with those losses and would never have been able to place these trades in the first place.

He somehow turned it around in his account to control 5 Billion Euros at once and make over 10 Million Euros.

This sets the table for much higher standards for Professional Accounts.

Traore deposited 20,000 Euros, which is not a substantial sum, but it is not considered a micro account either.  Remember, how there were going to be brokers looking to get around retail Forex requirements and possibly loosening the definition of what it means to be a Professional Trader?  That is about to be cracked down upon due to this case as ESMA is certainly paying attention to this.

Traore, for a Financial Services Professional, handled himself like an untrained amateur with a balance that was likely around 50 Million Euros.

After all, he should have been able to see the following and know how much a standard lot is..

There is the amount in the account staring him in the face and he does not recognize it.

But what if Traore did not use MetaTrader 4?

This is entirely possible and even likely, but there are no promoted demo accounts for any other platforms by Valbury Capital.

Valbury offers three platforms associated with Equity Futures:

Each has account balances available for review and the order procedure requires knowledge of how many lots are to be traded before the execution of the trade takes place.

Everyone is Negligent, But Only One Admits to Dishonesty

Right now, there are three parties worthy of blame.

  1. Harouna Traore
  2. Valbury Capital
  3. The trading educator

However, one of these parties admits to being dishonest in their efforts, which is Traore.

Traore defrauded Valbury Capital in the application process and he even admits to it, which is rather bizarre.  How far do France’s consumer protections go when the business is the one being defrauded?  However, how does such a mix-up in accounts take place from Valbury Capital’s perspective?  Traore was clearly not trading on a demo account and the money had to have come from somewhere.

Why did it take so long to detect that something was going wrong?  

The ignorance defense to win over the French justice system actually put him into a position where he admits to possibly committing a crime and he also violated Valbury Capital’s Terms of Service (the part Traore violated is a rather boilerplate term in the contract upon signing up with any broker or financial service provider).  He did not embellish anything, he actually lied in order to get the account.  Then he was put into a position where his so-called expertise would prove to be phony.

If Traore knew what he was doing, he would have been able to notice that something was wrong from the outset.  Why did Valbury Capital not be able to notice that there was such activity so soon and act upon it?  This is how FCA licenses are lost.

Where is Valbury Capital at fault in Traore’s ignorance?

Traore could not tell the difference between demo and real funds.  It is possible that Valbury Capital in their overeagerness to encourage extremely large deposits had a large amount of funds in the demo account and when a completely freak incident like this occurred, Traore did not know the difference.

Is ignorance an excuse?  Never, but Valbury Capital encouraged overeager behavior and played fast-and-loose with their IT systems and capital controls, they are negligent themselves.

Traore in his efforts, traded money that did not belong to him and all parties should have known right away that something was wrong.

Who provided Traore with the classes in Paris?  Inquiring minds want to know.

This is a story that makes absolutely no sense.

It is a shaggy-dog story with a confluence and comedy of errors on the part of all involved.

  • The trader falsifies information on his application.
  • The trader cannot tell the difference between his own real funds and his demo account.
  • The trader does not know how much a lot is when trading.
  • The lawyers for the trader want to support the trader’s incompetence and claim of fraud.
  • The broker appears to conjure up 50 Million Euros somehow by accident for a trader with a 20,000 Euro account.
  • The broker does not realize that this is happening until the gains are made by the trader.

This is clearly an error by the broker that is covered by the Valbury Capital Terms and Conditions in multiple ways, but Traore may have other issues down the road because of his argument in pursuit of more than 10 Million Euros.

Who gets away scot-free?  The course provider in Paris.  As always, they are unaccountable for their actions.

How this will likely turn out?

  • Valbury Capital is going to lose their license and they will be forced to shut down.
  • Harouna Traore does not get a dime from anyone and loses in legal expenses.  Criminal charges are not filed for the falsifications because the optics will look bad.
  • ESMA creates a new restriction requirement to be implement in November to make the Professional/Retail delineation standardized while forcing tougher requirements onto brokers.
  • The ill-gained money goes to the lawyers and the UK Government.
  • The course provider continues to take the money of fools.


What Lessons Should Be Taken Away?

  1. Don’t Trade Manually
  2. Use more than one strategy
  3. Be aware of how much money is in your account.
  4. Don’t use demo accounts for the purposes of manually trading.
  5. Don’t pay for trading courses.
  6. Don’t falsify information when filling out applications pertaining to financial services.

Freevestor LLC has no relationship with Valbury Capital nor any parties involved in this legal matter and all links provided are not endorsements of services.