Is Trading Against An FX Dealer A Crap Shoot?

I've been doing a lot of DEMO trading and I was thinking of going live. I've come across a lot of negatives about trying to beat a dealer at their own game. Things like:

1. Requotes
2. Running Stops.
3. Holding a trade until it is in their favor
4. Changing the spread in the middle of a trade during a quiet time.

There are probably more but these are the ones that seem to keep popping up. It sort of sounds like trying to beat a dealer at a casino. The odds are always in favor of the house.

I know,for example, that the prices in a DEMO account are different than an active account and as such the prices are more consistent in the live account.

So this brings me to my question.

You open a live account.

If, you buy one lot EUR/USD (Spread & 3 pips) Does the dealer take the other side of the trade? ie: Dealer Sells one lot EUR/USD.

I know the spread is theirs, in this example 3 pips. But, if a dealer has more than a spread at stake then it stands to reason that the dealer wants the EUR/USD to go down while you want it to go up.

What is to keep the dealer from dealing from the bottom of the deck?

It seems that a small account could get wiped out in quick time.

Just curious
RT...

Plenty of options there. Go with an ECN. They have no incentive to screw you over. If you are profitable, more volume for them, and more commissions. Or, pick a fixed spread broker that guarantees stops, and no slippage....

in my opinion this only happens two times:

1. The broker sucks. In which case the trader didn't do enough homework to find the right one. They looked for the one with the biggest leverage or the prettiest web site, instead of asking people who actually use the broker and do not have a vested interest in them selecting that broker. i.e. traders fault.

2. The trader sucks. They don't know how to set stops, manage risk and usually do not have a decent system to trade. They think everything should be handed to them on a silver platter and that trading is something everyone can do. They have listened and fell for the claims of 300-500% daily returns.

all too often the broker gets blamed for bad trading decisions.

I have been trading live for nearly 2 years and I have never experienced any of this and I have traded with 8 different brokers (not my choice, different clients liked different brokers).

Sorry if this steps on any toes but it is just my opinion.

[quote=rtsurvivor;2610104]I've been doing a lot of DEMO trading and I was thinking of going live. I've come across a lot of negatives about trying to beat a dealer at their own game. Things like:

1. Requotes
2. Running Stops.
3. Holding a trade until it is in their favor
4. Changing the spread in the middle of a trade during a quiet time.

.............................................................................................

Requotes with a broker are a fact of life, which certainly points towards the ECN side of the world, as has been stated.

Running stops can happen at highly momentum driven points, when you place a stop loss OR a buy stop too close to the line of support or resistance ---- use smarter stop losses and be VERY careful where you set a stop buy

They DO NOT hold trades ---- not only is it illegal, but its so visible that they wouldnt stand a chance of explaining it away to anyone.

Changing the spread DOES happen, of course, but its rare during quiet times --- mostly during news and high momentum activity.

now please understand that with all of those things often said, most any decent broker will not partake of "too much" or things become dicey.

understand, while they will take a trade against you, with the many retraces and outright reversals, if theyre holding a short, they make back their money when it happens --- for them its simply a matter of waiting for the reversal and making back everything they didnt win before, just as done by a mm in equities. A "broker" or "mm" makes the market in his/her little domain, but their job is not to put themselves out of business, so they make the spread and they make their own trades and they control (at visible times of day, btw) when the market goes up and when it comes back down, with them now gaining back all the shares they put out, at lower and lower prices which then prepares them for the NEXT runup, where the whole procedure begins again.

But if any of this bothers you in the least, simply wander over to MB trading, who is now in alpha with their adoptation of the MT4 platform, and work on a straight commission basis. If MB has any "fault" it is the desire for you to trade constantly so they increase their commissions, naturally. But you can be sure they wont be doing any of the things you question.

enjoy and trade well

mp

Read this - http://www.forexfactory.com/showthread.php?t=7484

your concerns 1,2 are valid but are not show-stopper
1. use limit order or stay away with mt4 requotes
2. know that they will stop hunt you, then use a little bigger stop, I use t/p for stops... they hunt my t/p and slippage and give money to me O_O (joking)

4 don't quite happen except news,

what does 3 mean?
not allow you to close order at a profit? it's illegal
that one you can video tape it and ask for compensation. and disclose them in fpa and ff!

as far as losing money:
1. try live account microlot that allow 100$ or even smaller, and you can start with not using a leverage, meaning position = acc size, then unless you trade 1k times a year, by probability you will not be able to wipe it out, haha
2. most of the time you lose money to other trader by some bad habits... you can open a demo mt4 (I did with a ecn back-end - price are real) and watch their price while trading on your own platform, this make ease of your suspect of broker when you lose money, if you lost 100pips in a deal, you lost to other guys in the same pair, not broker, you will find this if you stand in E/U thread and watch people taking opposite directions
3. if by the time your most concerns are solved and you feel they cannot steal money from you, increase acc gradually; if still uncertain about bucketshops, then you can go ecn for day shorts where there is no conflict of interest

choose a good broker that has hundred feedbacks of >3star ratings. http://www.forexpeacearmy.com/public...broker_reviews

last one, lower your profit goal and build your expectation on profits that you are sure about 'before you enter trade'.
if you want to make more than madoff per year, you're risking more than madoff investors...
making 30% in one week in demo account by one deal means you picked the right side of the coin, it says nothing.