Hi there,
I'm pretty new to all this Forex stuff and I read a lot in this forum. Numerous people report brokers cheat on them and they cannot do anything about it. Since some brokers are pretty way off, as it were, with their pricing there must be more than one reason. Now my question is can anybody of you point me to an article or tell me how does a broker work internally? Specifically, I'm interested in answers to the following questions:
1) What happens if one or more traders open/close a position with a broker?
2) How does a broker hedge all its open positions?
3) Who needs to pay commissions to whom? Broker to bank(s), trader to broker. How much money is it in relation to the trade? When do they need to pay commissions and does the size of the commission change at a particular time (News or so)?
4) How does the clearing work?
5) What happens if the broker gets more and more traders?
6) Does the broker need a specific amount of own money and why?
7) What happens if the number of successful traders rises?
8) Why do some brokers reject scalpers?
9) Does a registration with the NFA, for example, really mean a broker won't cheat on you?
Thanks a lot in advance. Your input is highly appreciated!
Cheers,
Dietrich
I'm pretty new to all this Forex stuff and I read a lot in this forum. Numerous people report brokers cheat on them and they cannot do anything about it. Since some brokers are pretty way off, as it were, with their pricing there must be more than one reason. Now my question is can anybody of you point me to an article or tell me how does a broker work internally? Specifically, I'm interested in answers to the following questions:
1) What happens if one or more traders open/close a position with a broker?
2) How does a broker hedge all its open positions?
3) Who needs to pay commissions to whom? Broker to bank(s), trader to broker. How much money is it in relation to the trade? When do they need to pay commissions and does the size of the commission change at a particular time (News or so)?
4) How does the clearing work?
5) What happens if the broker gets more and more traders?
6) Does the broker need a specific amount of own money and why?
7) What happens if the number of successful traders rises?
8) Why do some brokers reject scalpers?
9) Does a registration with the NFA, for example, really mean a broker won't cheat on you?
Thanks a lot in advance. Your input is highly appreciated!
Cheers,
Dietrich