A disturbing quote about forex trading

Here's a disturbing quote about forex trading taken directly from a great book I'm reading at the moment called "Come Into My Trading Room" by Dr Alexander Elder:

"The bulk of currency trading takes place in the interbank market, directly between dealers. Beginners turn to unscrupulous currency trading shops that bucket their orders (hold their money without executing trades) and kill them with commissions, spreads and interest charges. Survivors discover currency futures, where spreads are more narrow, commissions more reasonable and no interest is charged for the privilege of holding a position."

Are we all beginners here who use "unscrupulous currency shops", because what Dr Elder seems to be describing are the very businesses (without naming names) that we as small forex traders have to deal with.

I'm really concerned as to why he is so scathing of forex shops. Can anyone shed any light on his words.

Finally can anyone explain what a "currency future" is, as opposed to a direct forex trade?

This thread should clarify the difference between spot and futures forex.

http://www.forexfactory.com/forexfor...ead.php?t=3482

Silver

Many brokers and SBs are bucket shops in the sense that they bucket together trades, only hedging out the risk if their net risk exceeds their tolerances. The problem is if they are the dealer, and if the dealer knows all the hands in play, there is an information assymmetry to their advantage. Also, with fx, there is no physical market, so quotes can differ across the board. Because of this, people complain over getting stopped out, bad quotes, bad fills etc etc.

However, if a broker is really engaging in these bad practices, clients will stop doing business with them and complain all over these chat boards...the beauty of the internet: bad news travels fast. I'd go with the more reputable brokers, making sure they are regulated by the relevant authorities. I've settled with a handful of brokers/SB's, who meet my needs and have dealt with me honestly and fairly.

Hello abobtrader
Could you kindly tell me the names of the reliable
Brokers
Se3nbanda

after my last post I noticed the word broker becomes a hyperlink. I'm guessing these are Merlin's recommendations. Maybe your answer lies there?

There are a billion and one discussions on the best brokers, but I don't think there is a definitive answer as you have to find a platform that best suits your trading style.

For example, FXCM may be okay for medium or long-term trading but to my detriment I discovered it is not so good for short-term trading. The most important thing is to stay away from the duds.

My preferred broker in the US is Oanda. Its a fully automated system. However as I am based in the UK and prefer using spread-betting companies due to the tax benefit. I use Cityindex (uh hum, 5 pip spread on daily fx!), Man financial, CMC and Capitalspreads (3 pip spreads on the majors). Overall, I like Capital due to their friendly service. Interactive brokers are highly rated (okay, bar the occasional hiccup) so I may try them one day, but as it is, I am happy using the SBs.

sorry, but if you are not based in the UK, this isn't going to be of much use.

Thank you very much
I am in canada. i am demo trading InterbankFX
I will try Oanda
Senbanda