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Is this true?

  • Post #21
  • Quote
  • Edited 8:43am Jan 8, 2006 8:41am | Edited 8:43am
Quoting DrRock


I am not an employee of FXCM. I am associated with a company who is an IB to FXCM (they are also an IB to Sonray Capital Markets, HomeBroker, CMC)and I have a few FXCM accounts and a few Oanda accounts for that matter.
So you're associated with an introducing broker for FXCM and that places you in a excellent position to give an unbiased opinion does it? FXCM pays it's introducing brokers, such as those to whom you are associated, a portion of the spread as incentive fees. Therefore you too have a vested interest in trivialising the concerns voiced by the original poster.

Unless you have experience as an FXCM client, I would say your views regarding this particular discussion are not only prejudicial but beyond your field of expertise.

Steve
I was here, here I was. Was I here? Yes I was!
Quoting trevornd
For another point of view, have a look here



http://forexfacts.port5.com/index.htm
Trevor, thanks for posting that link. Probably will shock a lot of traders, especially new ones. But, I tend to agree with a lot of what is stated in that study regarding the deception and dishonesty in retail FX.

JohnFX
Quoting SterlingTDR
True but it would be nice to know the rules up front and without having to pay through the nose for them. To imply that those who question the rules are whining, or something to that effect, impedes the learning of these rules and actually promotes the fantasy that this is a "fair" game.
sterling, i wish it were different, but you have to pay through the nose to figure out the rules. this shit aint easy!!! trading successfully has rewards greater than any other profession, imho, so its not surprising that the game is as hard as it is.

to you second point that i am inferring "those who question the rules are whining", i have to say a huge YES. that is exactly what im saying. does this impede the learning process? i think it actually helps the learning process. when you dont worry about how things "should be", and start focusing on how things "are currently", your attention is on playing the game rather than questioning the rules.
Relax and be happy.
Merlin said:
and start focusing on how things "are currently", your attention is on playing the game rather than questioning the rules.
===============
It would not hurt to know who the players are, would it? And if the facilitator (broker) is in fact a player as well, as any market maker is, so there is a need to be aware of it. Learn all about your opponents before even entering the game. You broker is certainly one of them.
Quoting borpree
Merlin said:
and start focusing on how things "are currently", your attention is on playing the game rather than questioning the rules.
===============
It would not hurt to know who the players are, would it? And if the facilitator (broker) is in fact a player as well, as any market maker is, so there is a need to be aware of it. Learn all about your opponents before even entering the game. You broker is certainly one of them.
yes, of course you would want to learn as much about your broker as possible. thats not what im aurguing. i am a promoter and seeker of knowlege.

knowledge is about finding out how things "are currently". its when you start saying "this is how it SHOULD be...", or "it would be fair if..." that i consider it questioning the rules.
Relax and be happy.
Quoting JohnFX
Trevor, thanks for posting that link. Probably will shock a lot of traders, especially new ones. But, I tend to agree with a lot of what is stated in that study regarding the deception and dishonesty in retail FX.

JohnFX
One of the items this author addresses is Price Manipulation: " Price Manipulation occurs to trigger your Stop-Loss, to avoid your TakeProfit/Limit, and to move the current Pair price against you."

Still, I dare to question the ability of the so-called Operators to manipulate the price in such a way that it prevents you from making a profit.

I admit, I have experienced more than once that price-move drops dead one pip in front of my profit limit. Could be the influenece of an Operator. Nasty if this happens. But could it also have been a wrong placement of my profit limit? Would the same thing have happened if I had placed my profit limit three, four pips higher (or: lower)??

Obviously, in the long run, even an Operator has to follow the general price movement, and cannot hold prices before profit limits. Moreover, I am not the only trader he has to take care of. Others could greatly benefit from his fixating the price before a certain threshold, which would do the broker more harm than good. So, I believe in short-term manipulation, but tend the minimalize the effect in the long run.
Quoting Aroon
One of the items this author addresses is Price Manipulation: " Price Manipulation occurs to trigger your Stop-Loss, to avoid your TakeProfit/Limit, and to move the current Pair price against you."

Still, I dare to question the ability of the so-called Operators to manipulate the price in such a way that it prevents you from making a profit.

I admit, I have experienced more than once that price-move drops dead one pip in front of my profit limit. Could be the influenece of an Operator. Nasty if this happens. But could it also have been a wrong placement of my profit limit? Would the same thing have happened if I had placed my profit limit three, four pips higher (or: lower)??

Obviously, in the long run, even an Operator has to follow the general price movement, and cannot hold prices before profit limits. Moreover, I am not the only trader he has to take care of. Others could greatly benefit from his fixating the price before a certain threshold, which would do the broker more harm than good. So, I believe in short-term manipulation, but tend the minimalize the effect in the long run.

Yes I tend to agree, that most of the manipulation is in the short term and very short term trading. Wether or not they move prices a large amount of pips, such as 50 or 100 is dependant on wether or not it is worth-the-while for the operator. In other words, if there are a cluster of stops at a particular price level.

JohnFX
Quoting Aroon
I admit, I have experienced more than once that price-move drops dead one pip in front of my profit limit. Could be the influenece of an Operator. Nasty if this happens.
this is truely my favorite broker tale, the "i got stoppped out by one pip" story. like i said earlier, if you think the broker is moving the market to take your measly 10 lot trade, you are seriously overestimating your relevance. in addition, you are not understanding that the broker is suseptable to arbitrage if they move the market more than a pip or two. im not saying this to you directly aroon, cause i realize that you understand there are other reasons. but for many novice traders, they actually think this stuff is true!
Relax and be happy.
Quoting SterlingTDR
So you're associated with an introducing broker for FXCM and that places you in a excellent position to give an unbiased opinion does it? FXCM pays it's introducing brokers, such as those to whom you are associated, a portion of the spread as incentive fees. Therefore you too have a vested interest in trivialising the concerns voiced by the original poster.
How does offering an opinion on FXCM promote an un-named introducing broker?

Quote

Unless you have experience as an FXCM client, I would say your views regarding this particular discussion are not only prejudicial but beyond your field of expertise.

Steve

I did say that I have several FXCM accounts in my follow up post. I have been trading with FXCM for about 2 year now.

Simon
Quoting merlin
this is truely my favorite broker tale, the "i got stoppped out by one pip" story. like i said earlier, if you think the broker is moving the market to take your measly 10 lot trade, you are seriously overestimating your relevance. in addition, you are not understanding that the broker is suseptable to arbitrage if they move the market more than a pip or two. im not saying this to you directly aroon, cause i realize that you understand there are other reasons. but for many novice traders, they actually think this stuff is true!
Arbitrage, too funny!

When you’ve been in this game a while, the way MM’s operate become all too clear and like me, you’ll probably find yourself switching and using ECNs rather than playing silly games with bucket shops.

New traders deserve to know the rules they have to play by even if it ruffles your feathers Merlin. J


Steve
I was here, here I was. Was I here? Yes I was!
yessss,i think of them as forex bookies rather than forex brokers, lol
another INTP
Quoting qweet
following quote:
Quoting qweet
following quote:
Since the VAST majority of forex traders fail, ALL those money go to FXCM. Once you start to trade profitably, they cut you off, since then you are in fact getting THEIR money - you are putting them on the WRONG side of your position. Losing trader puts them on the RIGHT side of his position, thus FXCM is happy to invite newer and newer losers.
I don't know about it, but I could imagine they've got some software when is the majority going this or that way and based on this information their taken actions can be much better.

comments?
If the "VAST" majoirty (I assume the 90 percent of all traders fail motto is being alluded to here), but still its 50% win or 50% loose generally speaking. So in the vast majority, do what FXCM does (according to your statement) and trade a "counter-account". As a novice trader, the system would fall into the 90% of doomed traders. So simply reverse the signals and viola! your in the 10% camp! And if you question whether you need to know FXCM's view of their books, simply judge if your own system works and go opposite.
Profitsee - Knowing the future is not enough.
Interesting discussion and {as yet} I'm not picking sides but I do have a question.

So who does move the market. I see the bid and the ask and I decide to buy at the ask. Why does that change the ask for the 'n' next trader.

I understand how it works in Stocks & Commods. But how does it work in FX with a fixed spread brker?
Quoting Profitsee
...... So simply reverse the signals and viola! your in the 10% camp! And if you question whether you need to know FXCM's view of their books, simply judge if your own system works and go opposite.
This would be very true except that most traders do not fail because of a bad strategy, Their failure is, by and large, due to poor trade management, emotional management and risk management. Finding a profitable strategy is the easy, but finding one that suits your personality can cost alot of money.

What's more, (sorry this is way off topic) as human beings, our emotional make-up and personalities are not static. What I mean by that is that over time, we change. Not completely, but in subtle ways. These changes influence the way we see and react to everyday life and of course the markets. Therefore, from time to time, we may have to adjust our trading method and style.
I was here, here I was. Was I here? Yes I was!
I'd like to chime in on this thread too.

I am in the camp that believes that brokers are imperfect, but not perfectly deceptive.

I can't imagine that it is in the best interest for most brokers to try and trade directly against every single trader on their books. It makes no sense...it may be that MOST traders just happen to be trading in a direction that they are not, but, I just don't see it as strict business policy.

Think about it this way...

If I had the perfect business model, it would be based on transactional volume...why? because volume is where the money is...if a broker were to trade against every single position on the books, their net gain would be AT BEST all the capital in their client accounts and AT WORST, the spread on all trades ever opened to the extent that there is money in the client accounts. So, in the case of a trade-against policy there is CAP on the amount of earnings (equal to all the capital in the accounts). That may seem like alot, but it's really not compared to recurring revenue from 2 sources (interest in the equity on all the accounts) and the spread paid. Over an infinite period of time, volume will FAR FAR out distance total account equity.

In fact, I think it's in the broker's best interest for people to trade often because the spreads generate more income than the capital...and if a trader is doing well against the market, the trader will undoubtedly be inclined to trade more volume...which increases the amount of money made PER TRADE for the broker.

If the trader does poorly and blows out the account, the broker can make no more money off of him/her.

I can see where conspiracy theories come from. The lack of order...it "feels" like the world is against you...and your first crosshair is on the most obvious, the broker. It is a way to make yourselves feel a bit more adequate in a game that you think you understand...but really don't. We all want to see the market as being perfect...we want to feel that we can predict things...it's human nature...and when things happen that are against our actions, we justify it by making up stories to make ourselves sleep better in a world that is truly just too random for our comprehension...because, "by golly, we're just ALWAYS right and markets are NEVER EVER supposed to move that way and THAT'S why we lost".

Setiments may run together, but so does indecision and reaction. The prediction of those forces on the market is nearly impossible.The market is merely a compilation of thoughts. However, there is no indicator or event in the world that can possibly predict the complete outcome of all those thoughts. Generally, people move (and apparently think) in herds...it's the human thing to do...so that's what causes trends...and then invariably, people question what they're doing...this causes reversals. How much and how far is impossible to predict. Understanding this will make all the difference in the world...if only to your sanity...

The broker has only a slight advantage over this randomness than you do, so trust me, the only sure money in the game is to 1) collect interest on the equity on client accounts and 2) make the spread...period...if you were a broker, wouldn't you choose the 100% chance of a win over trying to predict which traders are going to be right and which ones are going to be wrong???
Quoting SterlingTDR
This would be very true except that most traders do not fail because of a bad strategy, Their failure is, by and large, due to poor trade management, emotional management and risk management. Finding a profitable strategy is the easy, but finding one that suits your personality can cost alot of money.

What's more, (sorry this is way off topic) as human beings, our emotional make-up and personalities are not static. What I mean by that is that over time, we change. Not completely, but in subtle ways. These changes influence the way we see and react to everyday life and of course the markets. Therefore, from time to time, we may have to adjust our trading method and style.
I couldn't agree more, LOL,

However, I do agree with Merlins' view. You either play the game or complain about the rules...It's not the olympics to ask for a fair game or fair competition....You just need to know the rules, and then you have the choice, either to play or quit...

And I also believe that everyone must try several brokers before settling about one...That's what demo accounts are for...You test your broker, you test the uptime and so on, until you are comfortable with this particular broker....Demo accounts are not for testing your trading strategy in the first place...Yes, they should be used to test your trading strategy, but your strategy should work anywhere using any broker, you should now choose, which one, and this is completely personal...

For example, I trade with MG Financial, not because they are the best, but because I feel very comfortable with their platform, I feel good about the company, they are into the business since 1992, they are registered with NFA and CFTC, and they don't have an IVR system when you call them over the phone...


Thanks,

Nader
There's gold in them words... I did not say that out loud did I?

I also trade with MG and to the best of by recollection I cannot pin down even one time when I felt that they were gunning for me. Again, it makes no sense. I would just pull my account and move on. Besides, If it were even remotely true, there is no way they could have lasted for 14 years in this business. I have never experienced any down time and have never experienced any appreciable slippage. But hey, life is not fair, so why should trading be any different?

Also, I want to see Merlin say "bug A boo" again, that just cracks me up.

see ya SMJ


Quoting narafa
I couldn't agree more, LOL,

However, I do agree with Merlins' view. You either play the game or complain about the rules...It's not the olympics to ask for a fair game or fair competition....You just need to know the rules, and then you have the choice, either to play or quit...

And I also believe that everyone must try several brokers before settling about one...That's what demo accounts are for...You test your broker, you test the uptime and so on, until you are comfortable with this particular broker....Demo accounts are not for testing your trading strategy in the first place...Yes, they should be used to test your trading strategy, but your strategy should work anywhere using any broker, you should now choose, which one, and this is completely personal...

For example, I trade with MG Financial, not because they are the best, but because I feel very comfortable with their platform, I feel good about the company, they are into the business since 1992, they are registered with NFA and CFTC, and they don't have an IVR system when you call them over the phone...


Thanks,

Nader
Quoting narafa

However, I do agree with Merlins' view. You either play the game or complain about the rules...It's not the olympics to ask for a fair game or fair competition....You just need to know the rules, and then you have the choice, either to play or quit...
... ...
For example, I trade with MG Financial, not because they are the best, but because I feel very comfortable with their platform, I feel good about the company, they are into the business since 1992, they are registered with NFA and CFTC, and they don't have an IVR system when you call them over the phone...


Thanks,

Nader
I know no other way to Change The Rules than complain about them.

When I was trading Commodities, I had an account with MFG
{it's probably still active and if I can somehow convert it to FX I may do so...}
I remember a few occasions when I contested my "Fill" whether it be Entry or Exit using tick charts to quote why I disbelieved } and after very few communiques was satisfied with the resolve.
It should be noted, however, that MFG as the referee {at least at that point in time, although I know that the resolve to my benifit was covered by them} were not wearing the same uniform/strip as the opposing team.
For the security of this resource they did tend to be on the high side of "Required Margin" can anyone tell me if this is still the case?

I think that, eventually when fx is regulated, brkers will be required to include a third party settlement desk. That's when your cioce of Brkers will greatly diminish as their revenue stream will have, in effect, lost an arm. Hence, the shylocks will close their doors.
Of course complaining is a way to change, but isn't action a lot louder. I mean if one feels they are being cheated, why not just move on a broker without a dealing desk. I know why, because we want our cake and eat it too. Lower leaverage, less hand holding, less service.. Everything comes at a price.

If the spot market ever does become regulated, sure there will be less charlatans, but then leverage and opportunity will diminish also.

This is not a business everyone. There are hidden risks and overt risks. I think everyone knows that a market maker can be on the other side of a trade. That is their function. When one signs on with a broker it is disclosed that they are a market maker or a IB or a Bank or a ECN or whatever. It is the responsibility of the person signing on to know this in advance. After all, it is their money at stake.

There is no FDIC protection in FOREX, nor should there be.

One has to have trust in their broker. If for what ever reason they do not, it is time to find another. Simple as that.

SMJ

]
Quoting smjones
Of course complaining is a way to change, but isn't action a lot louder. I mean if one feels they are being cheated, why not just move on to a broker without a dealing desk. I know why, because we want our cake and eat it too. Lower leaverage, less hand holding, less service.. Everything comes at a price.

If the spot market ever does become regulated, sure there will be less charlatans, but then leverage and opportunity will diminish also.

This is not a business for everyone. There are hidden risks and overt risks. I think everyone knows that a market maker can be on the other side of a trade. That is their function. When one signs on with a broker it is disclosed that they are a market maker or a IB or a Bank or a ECN or whatever. It is the responsibility of the person signing on to know this in advance. After all, it is their money at stake.

There is no FDIC protection in FOREX, nor should there be.

One has to have trust in their broker. If for what ever reason they do not, it is time to find another. Simple as that.

SMJ

]
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