does the broker win when I lose

Discussion in 'Forex Brokers' started by gsgs, Oct 27, 2011.

  1. gsgs


    or lose when I win ?

    Or do they hedge the positions ?

    So, in general, would brokers not be interested in people
    that make wins ?

    But they must motivate you to think that you will win,
    else you wouldn't trade.
    But in reality they assume that this is a lie and they
    think you will lose, else they would not be interested
    to make trades with you ???

    Do brokers exchange data about customers, who have
    a successful strategy, so others would be able to avoid
    those customers ?
    If they do, there could be competition between offshore
    brokers and US-brokers, so they would not tell brokers
    in other countries about to-be-avoided customers ?

    I've read in several broker reviews on other forums
    that successful traders are internally transferred to
    another spread-scheme, so they get worse conditions.
    (at some brokers, I don't know whether it's normal)
  2. Yes, if you trade FOREX.
  3. gsgs


    so, where are the losers ?
    A winner should try to find a loser who runs her EA
    on his account against provision.
    Would it even be legal or against the broker's terms and conditions ?
    What, if a loser buys a successful EA ? Does he have to
    report it to the broker ?
    Do the brokers "see" the EAs and maybe detect unwanted ones ?

    (metatrader 4)
  4. Sometimes Yes, sometimes no.

    It depends on the Broker.. I have worked for a couple different brokers.. A small bucketshop FX operation that made their money from client losses and wouldn't pay out if someone won big. And a large broker with a variety of available markets who hedged their exposure and made their money from trade volume.

    Any small broker, especially FX you should be very suspicious of. If they use MT4 even more so.
  5. gsgs


    how can they legally "not pay out" , if someone won big ?

    And I assume it would be reported in internet, in the forums
    and reviews.

    If you win, should you better immediately withdraw the win
    before it goes "big" `?

    or better trade options which anonymously goes to the exchange
    and the broker just gets a fee while the counterpart is
    someone else

    I mean, just in case you "expect" to win. Which apparently most
    traders do (why else would they want to trade) but the
    brokers don't (why else would they do the business)
    but mustn't admit see the advertisements)
  6. sanfo


    It's true if you are using Market Maker type of brokers, MM are Instaforex, FxPro and some others

    but for STP/ECN and DMA, it's not,because they make money on the traded volume,
    HotForex, FXCC, Galant are STP/ECN.

    personally i prefer STP/ECN brokers.
  7. gsgs


    searching a bit , I found :

    ECN: Electronic communication network
    STP: straight-through processing
    DMA: direkt market access

    InstaForex is an ECN-broker

    then there are spread betting brokers (CFDs, forbidden in USA)
    worldspreads etc.

    some also offer this via metatrader4
    FXCM (ODL)
    smartlivemarkets (not MT4 ?)

    have futures for MT4

  8. Quite easily if there is a clause in the customer agreement that no one reads that allows the broker to void any trade they want due to "mispricing".
  9. gsgs


    mispricing can easily be (dis)proved, the quotes are available.
    Would the Court accept the void when obviously there was
    no mispricing ?

    And can they still require this months,years later when the
    account statements were already accepted ?
  10. I'm old school. I believe your broker should be working on your behalf to execute your trades quickly, cheaply and with the best possible price. If they're taking the other side of the trade, there's an inherent conflict between your interests and their's. So beware the forex bucket shops.

    One forex firm that went public a couple of years ago (I can't remember which) basically said in their prospectus that they relied upon their customers to lose money and that a risk to their business was finding enough new customers to replace those that busted/closed their accounts.
    #10     Oct 29, 2011