I'm looking for Trading Firm who was successful. Did they work like hedge funds ( use investor funds to trading ) or did they provide a platform to help investor make good decision to trade ? Can you give an example of this firm ? how they earn money ? what is their value proposition ?
if you are talking about bucket shops, they just trade against the customers, and take a cut on the spread, exactly like a Las Vegas Casino.
There was a cnbc show about one that blew up that was doing this. Got me wondering if some or most or all do this. It's actually brilliant model, to paraphrase "most of our customers loose all their money anyways, so we just take the other side" I do love a rude dose of honesty ... Anyways makes sense 1) zero-sum, 2) inefficiency of zero-sum due to commissions 3) sum of all P&L = negative sum of all commission fees & other pleasantries Yeah all the broker stalkers here are gonna hate this post, so I'll just say in advance: SUCK IT
I learned about it when I got pitched as an investor in some new firm based in I forget where, some god forsaken place like Israel or Morroco or Cyprus. All the money was made from betting against the customer, and the spread just insured breakeven. You have to think about it. The customer has a limit. The casino has no limit until a customer gets lucky and breaks them.
I think there are different kinds of forex brokers, some are real broker and get profit through commissioning, some are market maker and bet with their client.