Here's the smoking gun on FX brokers. Great read.

Here's the smoking gun on FX brokers. Great read.

I surprised why anyone at this point would choose a deal desk broker over an ECN. Who wants to have the broker take the opposite side of your trades?

I surprised why anyone at this point would choose a deal desk broker over an ECN. Who wants to have the broker take the opposite side of your trades?

NTFX! ...way to go

Aside from that, typical of the FT to over-state things. Yes your broker is playing against you, if this is a surprise then go back to newbies class. However for the FT to state that anybody with a $500 account value could set a stop loss at -$1000 without getting margin-called before that is simply wrong. Or does somebody know different?

NTFX! ...way to go :) Aside from that, typical of the FT to over-state things. Yes your broker is playing against you, if this is a surprise then go back to newbies class. However for the FT to state that anybody with a $500 account value could set a stop loss at -$1000 without getting margin-called before that is simply wrong. Or does somebody know different?

The following sentence alone worth my 'useful vote', "" The majority of our revenue is derived from our activities as a market-maker to our retail customers, where we act as the counterparty to our customers’ trades.""

Sonic

The following sentence alone worth my 'useful vote', "" The majority of our revenue is derived from our activities as a market-maker to our retail customers, where we act as the counterparty to our customers’ trades."" Sonic

yeah... so many people lose money in this game (yes, that's all it is, a game)

yeah... so many people lose money in this game (yes, that's all it is, a game)

Well it's nice to finally have a broker come out on the record and state what's been obvious to anyone with a modicum of experience in this industry.

They should sticky that one line on the top of the Brokers forum section, end all of the ECN-vs-DD debate right then and there..

Well it's nice to finally have a broker come out on the record and state what's been obvious to anyone with a modicum of experience in this industry. They should sticky that one line on the top of the Brokers forum section, end all of the ECN-vs-DD debate right then and there..

It really doesn't matter if you have a market maker or ECN, I have both and they move exactly alike at same pip intervals and so on....blah blah....

The only difference in ECN is someone else is making the money and not the broker... nothing at all different... either way someone gets your money...

people gotta get over the market-maker thing, its pointless. If you loose you are the only one to blame

It really doesn't matter if you have a market maker or ECN, I have both and they move exactly alike at same pip intervals and so on....blah blah.... The only difference in ECN is someone else is making the money and not the broker... nothing at all different... either way someone gets your money... people gotta get over the market-maker thing, its pointless. If you loose you are the only one to blame

I agree with Fibo. I used PFG-Direct an who is an ECN and compared trades with Fxcm which is not an ECM. There was only a slight difference.

Casey Stubbs-- Winners Edge Trading

[quote=FiboFX;3207506]It really doesn't matter if you have a market maker or ECN, I have both and they move exactly alike at same pip intervals and so on....blah blah.... The only difference in ECN is someone else is making the money and not the broker... nothing at all different... either way someone gets your money... people gotta get over the market-maker thing, its pointless. If you loose you are the only one to blame[/quote] I agree with Fibo. I used PFG-Direct an who is an ECN and compared trades with Fxcm which is not an ECM. There was only a slight difference. Casey Stubbs-- [URL="http://www.WinnersEdgeTrading.com"]Winners Edge Trading[/URL]

Investing IN forex brokers seems a high probability trade.

Investing IN forex brokers seems a high probability trade.

Hey Casey - PFG an ECN? Wrong. They just write this but in truth they are probably STP at best.

Fibo is wrong too if you ask me, yes if you make a bad investment decision you only have yourself to blame but when somebody profits from your losses there's obvious conflict of interest involved. Certain market makers won't even let you withdraw your money, unlike ECN brokers who don't have such interest.

Hey Casey - PFG an ECN? Wrong. They just write this but in truth they are probably STP at best. Fibo is wrong too if you ask me, yes if you make a bad investment decision you only have yourself to blame but when somebody profits from your losses there's obvious conflict of interest involved. Certain market makers won't even let you withdraw your money, unlike ECN brokers who don't have such interest.

If you compare both charts they are the same, they move the same and they act the same.... a market maker does not have to even get involved and manipulate the charts or hunt stop losses or do all those crazy things people think they do... they know 90-95% of people loose... so they win 90-95% of the time...thats there model plain and simple.

I use dukascopy and gft and same thing happens in both. lol..

also if you actually read a contract for an ECN they specifically say that some times they could be the counterparty...

About not letting you withdraw funds well thats another issue that has nothing to do with market maker...

by the way I wish I was a market maker

If you compare both charts they are the same, they move the same and they act the same.... a market maker does not have to even get involved and manipulate the charts or hunt stop losses or do all those crazy things people think they do... they know 90-95% of people loose... so they win 90-95% of the time...thats there model plain and simple. I use dukascopy and gft and same thing happens in both. lol.. also if you actually read a contract for an ECN they specifically say that some times they could be the counterparty... About not letting you withdraw funds well thats another issue that has nothing to do with market maker... by the way I wish I was a market maker

Trade futures. Then no more excuses.

Trade futures. Then no more excuses.

You know there will always be an excuse. Losing money couldn't possibly be the investors fault.

[quote=Privacy is gold;3208446]Trade futures. Then no more excuses.[/quote] You know there will always be an excuse. Losing money couldn't possibly be the investors fault.

Do you know which market makers will not let you withdraw your money? I will be sure to stay away from that one.

[quote=ForexMagnates;3208025]Hey Casey - PFG an ECN? Wrong. They just write this but in truth they are probably STP at best. Fibo is wrong too if you ask me, yes if you make a bad investment decision you only have yourself to blame but when somebody profits from your losses there's obvious conflict of interest involved. Certain market makers won't even let you withdraw your money, unlike ECN brokers who don't have such interest.[/quote] Do you know which market makers will not let you withdraw your money? I will be sure to stay away from that one.

Fibo - ECN contract saying they some times could be counterparty? This means it's not a true ECN my friend.. Technically there is no way an ECN can be a counterparty if it really operates as an ECN.

The only scenario I can think is that one client of that ECN broker meets the order of another clients of that ECN broker, but even then the ECN itself has nothing to do with it unless it trades its own Nostro account.

Fibo - ECN contract saying they some times could be counterparty? This means it's not a true ECN my friend.. Technically there is no way an ECN can be a counterparty if it really operates as an ECN. The only scenario I can think is that one client of that ECN broker meets the order of another clients of that ECN broker, but even then the ECN itself has nothing to do with it unless it trades its own Nostro account.

When I read this I didn't even consider the DD vs. ECN issue as part of the story. My impression of what the author was commenting about was the predatory practice of Forex brokers spending huge ad dollars to seduce neophyte investors who they know will undercapitalize and overleverage their accounts. Who hasn't seen the '$10,000.00 from a $20.00 investment in Forex' ads? I get 4 to 5 a day in my email.

When I read this I didn't even consider the DD vs. ECN issue as part of the story. My impression of what the author was commenting about was the predatory practice of Forex brokers spending huge ad dollars to seduce neophyte investors who they know will undercapitalize and overleverage their accounts. Who hasn't seen the '$10,000.00 from a $20.00 investment in Forex' ads? I get 4 to 5 a day in my email.

I like the way the piece ends:

"...But do the National Futures Association in the US and the FSA in the UK actually
understand the hardwired hustle going on here ?

If not, it's about time they did."

Do they understand ? They are the mother and father of this bastard child.
Of course they understand how it works. These agencies help nurture this monster (retail forex)
and keep it alive in captivity. It belongs in a zoo behind a cage of bars.

BTW: I wish I was a market maker too ! What could be more profitable ?

I like the way the piece ends: "...But do the National Futures Association in the US and the FSA in the UK actually understand the hardwired hustle going on here ? If not, it's about time they did." Do they understand ? They are the mother and father of this bastard child. Of course they understand how it works. These agencies help nurture this monster (retail forex) and keep it alive in captivity. It belongs in a zoo behind a cage of bars. BTW: I wish I was a market maker too ! What could be more profitable ?

I hedge my trades and martingale my positions sizes. Everyday i'm left waiting for my stops to get hit so i can take a profit. Wish i was lucky as you guys having their stops targeted. Most days i'm left feeling that my broker is trying to avoid my stops!

I hedge my trades and martingale my positions sizes. Everyday i'm left waiting for my stops to get hit so i can take a profit. Wish i was lucky as you guys having their stops targeted. Most days i'm left feeling that my broker is trying to avoid my stops!

I'm from the futures world where most of the bigger shops insist on a 5K minimum and will turn away business based on credit and background checks etc. I understand that begining traders consistantly place thier stops too close, and find it easier to blame anything but themselves for that. I understand that maintaining simultaneous long and short positions - known as "washed trades" aka "hedging" in forex-- in the same or related accounts is, and always has been illegal in futures because it opens the possibility of controlling gains and losses to avoid taxes, and hiding actually losses in managed accounts. I also understand that when it comes to trading in Forex 95% of people are going to very likely lose, and that because they have no control over this they are going to create a myriad of distractions and excuses why this is so.

Trading is trading though whether it's stocks, futures or forex, and it always takes a lot of mullets to feed just one big fish.

As for that fxbroker doing this and this broker doing that, all I can say is Currenex -- with a lot cheaper minimum than it used to be.

I'm from the futures world where most of the bigger shops insist on a 5K minimum and will turn away business based on credit and background checks etc. I understand that begining traders consistantly place thier stops too close, and find it easier to blame anything but themselves for that. I understand that maintaining simultaneous long and short positions - known as "washed trades" aka "hedging" in forex-- in the same or related accounts is, and always has been illegal in futures because it opens the possibility of controlling gains and losses to avoid taxes, and hiding actually losses in managed accounts. I also understand that when it comes to trading in Forex 95% of people are going to very likely lose, and that because they have no control over this they are going to create a myriad of distractions and excuses why this is so. Trading is trading though whether it's stocks, futures or forex, and it always takes a lot of mullets to feed just one big fish. ;) As for that fxbroker doing this and this broker doing that, all I can say is Currenex -- with a lot cheaper minimum than it used to be.

The majority of traders that make it trading, or the ones that are on their way, realize that they alone are responsible for their success.

The majority of traders that make it trading, or the ones that are on their way, realize that they alone are responsible for their success.

I personally think people should stop complaining about the retail Spot FX dealers. Yes, they provide you with low margins, sure they take the other side of most retail traders trades, and sure they make money off of the spread, but these are all perfectly acceptable and ethical (and morally sound in my opinion) ways to make money. If they are doing other shady or fraudulent activities then they should be punished or shut down, but constantly bitching about the poor little investor who doesn't understand volatility and leverage and therefor blows his $500, just ruins it, and over-regulates the industry, for people who know what they're doing and know how to make money in FX, like me. I like the fact that I can control a lot currency with a little margin, and I have consistently made a lot of money over the past few years with it. The CFTC and NFA have already raised minimums in the US to a notional 100:1 on most pairs, which is a big increase. So please, quit bitching about the big bad dealer vs. poor little (yet completely ignorant) investor/trader and learn how to trade responsibly or go call Vanguard. And if someone must bitch to the NFA or CFTC about about something, please start complaining about forcing US based FX dealers to segregate customer funds, like in the UK, and that will be something worth complaining about. (This post is not directed at any particular person, but at all whinny "poor little me" traders).

I personally think people should stop complaining about the retail Spot FX dealers. Yes, they provide you with low margins, sure they take the other side of most retail traders trades, and sure they make money off of the spread, but these are all perfectly acceptable and ethical (and morally sound in my opinion) ways to make money. If they are doing other shady or fraudulent activities then they should be punished or shut down, but constantly bitching about the poor little investor who doesn't understand volatility and leverage and therefor blows his $500, just ruins it, and over-regulates the industry, for people who know what they're doing and know how to make money in FX, like me. I like the fact that I can control a lot currency with a little margin, and I have consistently made a lot of money over the past few years with it. The CFTC and NFA have already raised minimums in the US to a notional 100:1 on most pairs, which is a big increase. So please, quit bitching about the big bad dealer vs. poor little (yet completely ignorant) investor/trader and learn how to trade responsibly or go call Vanguard. And if someone must bitch to the NFA or CFTC about about something, please start complaining about forcing US based FX dealers to segregate customer funds, like in the UK, and that will be something worth complaining about. (This post is not directed at any particular person, but at all whinny "poor little me" traders).

Eric 615, you said precisely what I was about to type! All I can add is that traders must be carefull what they wish for. Regulators get it wrong more often than not by not understanding the problem.

Be gratefull that there are brokers/dealers out there willing to be the counterparty to your trade, not having the luxury (like we have) to stay out of a particular trade. All they can go on is the fact that probability says they should make more than they lose - is that not the same boat we all are in?

I've had bad experiences with brokers before, closed accounts and moved on - with a bit of research, you find out who's better - give them your business. This way of self-regulation will clean out the system over time.

Eric 615, you said precisely what I was about to type! All I can add is that traders must be carefull what they wish for. Regulators get it wrong more often than not by not understanding the problem. Be gratefull that there are brokers/dealers out there willing to be the counterparty to your trade, not having the luxury (like we have) to stay out of a particular trade. All they can go on is the fact that probability says they should make more than they lose - is that not the same boat we all are in? I've had bad experiences with brokers before, closed accounts and moved on - with a bit of research, you find out who's better - give them your business. This way of self-regulation will clean out the system over time.

Mushwedu,

Glad you agree. I felt like venting after constantly hearing people complain all the time. Your first paragraph is exactly what I'm worried about, over-regulation, which might ruin it for responsible and profitable traders. It's not like if they raise margin's even more, or regulate more, that all of a sudden all these traders will win and be happy. As a matter of fact the same amount of people would still lose because it is not the margins, market makers, or spreads that are causing the losses, it's the traders themselves.

Good trading to you.

Mushwedu, Glad you agree. I felt like venting after constantly hearing people complain all the time. Your first paragraph is exactly what I'm worried about, over-regulation, which might ruin it for responsible and profitable traders. It's not like if they raise margin's even more, or regulate more, that all of a sudden all these traders will win and be happy. As a matter of fact the same amount of people would still lose because it is not the margins, market makers, or spreads that are causing the losses, it's the traders themselves. Good trading to you.

Agreed to the last three comments.

Agreed to the last three comments.

Eric615, Mcforex and all other like-minded traders out there.

One last comment - or should I say nightmare regulation that is not that far fetched (they did ban shorts last year, remember).

They could decide that "playing fields must be leveled" - that should then apply for the brokers as well.

An example of just such a daft regulation could entail the following: In a horse race, you bet on the outcome of the race. You cannot take part profit at the halfway mark if your horse is in the lead. We do that every day by cutting a trade early. It could be made that that you set your stop and profit level and that stays fixed to stop or target...

There is a strong argument that such a method is only fair to the broker - then he knows what his risk is for each trade we take and can plan accordingly.

That's when I find something else to do.

Happy trading to all.

Eric615, Mcforex and all other like-minded traders out there. One last comment - or should I say nightmare regulation that is not that far fetched (they did ban shorts last year, remember). They could decide that "playing fields must be leveled" - that should then apply for the brokers as well. An example of just such a daft regulation could entail the following: In a horse race, you bet on the outcome of the race. You cannot take part profit at the halfway mark if your horse is in the lead. We do that every day by cutting a trade early. It could be made that that you set your stop and profit level and that stays fixed to stop or target... There is a strong argument that such a method is only fair to the broker - then he knows what his risk is for each trade we take and can plan accordingly. That's when I find something else to do. Happy trading to all.

I hope some of you went to the FT site to complain about their defence of the ignorant or novice trader. I know that you can expect a 'rag' to sensationalise the situation, that is how they make money, but I feel the journalist was armed with just enough knowledge to be dangerous!

I hope some of you went to the FT site to complain about their defence of the ignorant or novice trader. I know that you can expect a 'rag' to sensationalise the situation, that is how they make money, but I feel the journalist was armed with just enough knowledge to be dangerous!

IDK i dont see a difference in ECN v. DD. I know the difference but i dont see what is has to do with profitable trading. If your trading against the broker your probably not going to win anyways. The broker and market maker has WAY more market information than you he has every deal and every pending order displayed. I think a lot of people dont understand a market maker or broker is not trading against you your trading against him(or her). That is why when i started getting serious about trading i decided to look at the underlying structure of trading. Who wins and how can i win with them. MM ALWAYS WIN.

Here is a scenario. Im the MM there is an uptrend. Lets just say for out purposes i am flat i own nothing. I know by the number of orders there is a lot of profit taking and a lot of new short contracts. I will take advantage of this area of mixed sentiment. I want to Bait New Long Contracts. I will keep selling to traders everything i can meaning us as traders would be buying. I know because of the orders there is a price ceiling of profit takers and new short contracts that keeps getting lower and lower. So now i am satisfied with how much i have shorted. This pattern has created a "FALSE" support. Then i pull the trigger instead of supporting it i just let it fall. All the people who are either too inexperienced or scared because they are in denial about losing Exit in one giant impulsive move. So now im flat again as a MM with more cash than i started.

He is the boss he handles the orders sets the traps and risks the volume. Good trading is about mimicking the market makers Trade with them Its kinda ridiculous to assume that a market maker or broker would never trade against you. YOU ARE SMALL FISH IN A BIG POND. Just because you place a trade doesn't mean the market is heading that way. I think this really boils down to not accepting responsibility for a trade that didn't go as planned.

IDK i dont see a difference in ECN v. DD. I know the difference but i dont see what is has to do with profitable trading. If your trading against the broker your probably not going to win anyways. The broker and market maker has WAY more market information than you he has every deal and every pending order displayed. I think a lot of people dont understand a market maker or broker is not trading against you your trading against him(or her). That is why when i started getting serious about trading i decided to look at the underlying structure of trading. Who wins and how can i win with them. MM ALWAYS WIN. Here is a scenario. Im the MM there is an uptrend. Lets just say for out purposes i am flat i own nothing. I know by the number of orders there is a lot of profit taking and a lot of new short contracts. I will take advantage of this area of mixed sentiment. I want to Bait New Long Contracts. I will keep selling to traders everything i can meaning us as traders would be buying. I know because of the orders there is a price ceiling of profit takers and new short contracts that keeps getting lower and lower. So now i am satisfied with how much i have shorted. This pattern has created a "FALSE" support. Then i pull the trigger instead of supporting it i just let it fall. All the people who are either too inexperienced or scared because they are in denial about losing Exit in one giant impulsive move. So now im flat again as a MM with more cash than i started. He is the boss he handles the orders sets the traps and risks the volume. Good trading is about mimicking the market makers Trade with them :) Its kinda ridiculous to assume that a market maker or broker would never trade against you. YOU ARE SMALL FISH IN A BIG POND. Just because you place a trade doesn't mean the market is heading that way. I think this really boils down to not accepting responsibility for a trade that didn't go as planned.