If you start to be successful - Will your broker close you down? | Forex Factory

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If you start to be successful - Will your broker close you down?

  • #1
  • First Post: Aug 6, 2007 3:33pm Aug 6, 2007 3:33pm
First of all, my apologies if this has been asked before, but, I am too lazy to look through all other postings.

The reason I am asking is twofold - 1. A request to other successful UK FF subscribers to openly advise about their experiences of UK spreadbetting company reactions to successful traders, and, 2. The international perspective on the conventional brokers to avoid and the HONEST broker players who offset their losses by actually going into the market, happy just to take the spread.

Point 1.

In the UK we can legitimately win money TAX FREE by spread betting with UK resistered companies such as FINSPREADS, CAPITAL GAINS etc. It is necessary to point out that these spreadbetting companies rarely go to the market except to offset their potential losses if your trade is large enough and happens to agree with the general consensus of their in-house experts.
However, in the UK it is widely held that these organisations and their national competitors are really just glamourised BOOKIES, and as such are legally entitled to decline your business on a whim, if they decide to do so (they start to lose more than you and they see an emerging pattern of continuing success for you).
Is this true? and if so, at what levels do they start to get twitchy?

I hope the answer is NONSENSE - go ahead, we challenge you to bankrupt us.... But, somehow, I doubt it.

Point 2.

Are there really organisations out there internationally who will take your trades and allow you to continuously be successful?

If the answer to 2 is NO, then what is the point of trading?

However, I am hoping that the answer to 2. is YES - but expect to pay wider spreads and deposit at least $xxxxx etc.

I hope you guys can help.
  • #2
  • Aug 6, 2007 5:59pm Aug 6, 2007 5:59pm
i think with spreadbetting that's entirely possible.... as you said, they are bookies but what about the regulation ?

It's weird that they can accept to take your position and not pay you when you win...
  • #3
  • Aug 7, 2007 1:50am Aug 7, 2007 1:50am
Quoting melpheos
i think with spreadbetting that's entirely possible.... as you said, they are bookies but what about the regulation ?

It's weird that they can accept to take your position and not pay you when you win...
I'm sorry, I didn't mean to imply that they will not honour a winning trade, merely to point out that conventional bookmakers here in the UK can terminate your account if they feel you are going to win more than you lose.
I was really just looking for some feedback from successful UK traders as to whether thse are still using Spreadbetting companies or have moved on to conventional brokers\market makers - who they believe should be avoided and who they rate as essentially honest.
  • #4
  • Aug 8, 2007 6:47pm Aug 8, 2007 6:47pm
If your broker has not shut you down as of yet, one of two things needs to be considered.
1.) They will not shut you down once profitable.
2.) You are not profitable.
Just funnin'
  • #5
  • Aug 8, 2007 8:09pm Aug 8, 2007 8:09pm
This is a big misconception about brokers. Most would love for you to be profitable so they can earn spreads on every single trade you make. Once you blowout there is no more volume and no more spread for them. Too many people on this forum blame there broker for there inability to trade. Everyone wants you to be successful, so only you are holding yourself back.
  • #6
  • Aug 9, 2007 2:34pm Aug 9, 2007 2:34pm
Sorry, Roland, but self help and confidence don't determine success in Forex.

Most brokers make only a small percent of their earnings on spreads and rollover markups. The remainder is made on taking the opposite side of the trade, so a successful trader will cost the broker money in the long term.

That is business sense, not trading sense.
  • #7
  • Aug 9, 2007 3:52pm Aug 9, 2007 3:52pm
Quoting tdion
Sorry, Roland, but self help and confidence don't determine success in Forex.

Most brokers make only a small percent of their earnings on spreads and rollover markups. The remainder is made on taking the opposite side of the trade, so a successful trader will cost the broker money in the long term.

That is business sense, not trading sense.
I'm sorry but you are incorrect here. Most quality brokerages do not trade against clients and simply match up customer orders or pass them on to banks. I'm not sure where you trade, but it sounds like you need to find a new broker.

I also disagree that self help and confidence don't play a part in forex trading. In fact if you read "New Market Wizards you will find this is mentioned multiple times by successful traders.

In fact i would say "psychological approach" is the most important attribute of a succesful trader.

Ro
  • #8
  • Aug 10, 2007 2:48am Aug 10, 2007 2:48am
Quoting Rolandlc33
I'm sorry but you are incorrect here. Most quality brokerages do not trade against clients and simply match up customer orders or pass them on to banks. I'm not sure where you trade, but it sounds like you need to find a new broker.

I also disagree that self help and confidence don't play a part in forex trading. In fact if you read "New Market Wizards you will find this is mentioned multiple times by successful traders.

In fact i would say "psychological approach" is the most important attribute of a succesful trader.

Ro
Yeah. But who are the quality brokers? Is there a league table somewhere?

As for an earlier comment, I am not blaming my spreadbetting company for any lack of success, I am just concerned about the reputation of this type of organisation, i.e. they are effectively bookmakers (here in UK there is no tax liability, hence the initial attraction). And, I want to know that my eventual real broker (I have to face up to the fact that tax will have to be paid) will permit me to make good returns whilst they are happy in the knowledge that they are taking their spread.

Is this too much to ask?
  • #9
  • Aug 10, 2007 2:40pm Aug 10, 2007 2:40pm
Hello again Roland. While I agree w/ you that orders are matched against each other, the broker takes the OPPOSITE position w/ the banks (based on most traders failing.) That's why most brokers will tell you "we take the risk." Merlin or SMJones, correct me if I am wrong.

Now if what I have said is true, execution AGAINST clients becomes a key strategy. That is why there are so many threads posted saying "I had a profitable EA, and the closed my account." "I had a profitable EA, and they changed my execution."

As for confidence, it can only take you so far. That was my point.

Quoting Rolandlc33
I'm sorry but you are incorrect here. Most quality brokerages do not trade against clients and simply match up customer orders or pass them on to banks. I'm not sure where you trade, but it sounds like you need to find a new broker.

I also disagree that self help and confidence don't play a part in forex trading. In fact if you read "New Market Wizards you will find this is mentioned multiple times by successful traders.

In fact i would say "psychological approach" is the most important attribute of a succesful trader.

Ro
  • #10
  • Last Post: Aug 13, 2007 11:53am Aug 13, 2007 11:53am
Quoting Rolandlc33
In fact i would say "psychological approach" is the most important attribute of a succesful trader.
I guess in the long run this is true. When someone is always blowing his accnt due to a flawed strategy he'll be broke but he'll be happy. Otoh, blowing accnts doesn't really fit the description of a successful trader, does it? Hmm...does that mean a winning strategy is more important than psychology?
Sorry, maybe the subject of a new thread.
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