So brokers take trades, who cares... | Forex Factory

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So brokers take trades, who cares...

  • #1
  • First Post: Mar 17, 2018 1:26am Mar 17, 2018 1:26am
Opening this thread to discuss the REAL impact of brokers either acting as counterparty to your trades or simply opening trades in the opposite direction of persistent losers.
If your broker acts as the counterparty to your trade, what does it matter? from a business model point of view it makes perfect sense.
Over the long run, the vast amount of retailer traders lose, meaning being counterparty to retail trades makes simple business sense.
But what is the effect of this on YOUR results?

Unless you're operating with a 10 pip or less SL, I would think the effect is zero.
From what I understand, brokers may push price a few pips,maybe not even this. And who says there is not another retailer trading in the opposite direction to you that the broker has also been counterparty to, who will not cash out from the resulting market movement.

Or,

If Brokers simply watch the trades of retail clients' who frequently lose and just open trades in the opposite direction to them as they are made without actually being a counterparty to them. So what??

Points of discussion welcome, but no depressive types who wish to simply kill themselves please...
Come with me if you want to live....
  • #2
  • Mar 17, 2018 3:30am Mar 17, 2018 3:30am
absolutely, if the broker feed is accurate, meaning no fake spikes and widening of spreads, and if the broker keeps the money properly and pays withdrawals, and has adequate contact with the client, it doesnt really matter. I don't know where do traders think their trades go, but it is not fairyland. The brokers are counterparty. People open up a 0.02 or 0.14 lot trade and then blame the broker because he probably sits on the other side of the trade. Not probably, but 100% sure, and they should thank there are such brokers that give small clients access to the market. If such market maker brokers did not exist, 99% of people that currently trade would not even smell forex.
  • #3
  • Edited 2:36pm Mar 17, 2018 4:24am | Edited 2:36pm
No problem if the broker takes the other side; but broker is human and get greedy after a while.

he will start hunting stops and making life difficult for profitable traders.

best way for all market participants is to eliminate conflict of interest. a market maker broker is a definite No No
  • #4
  • Mar 17, 2018 7:50am Mar 17, 2018 7:50am
I am interested in finding out how much brokers can actually move price. Links or other supporting documentation are worthwhile reads.
Do they hunt stops or does the market?

We read all kinds of things/opinions on forums, but little in the way of documentation.
Come with me if you want to live....
  • #5
  • Mar 17, 2018 7:54am Mar 17, 2018 7:54am
A list of market Makers.

https://www.allfxbrokers.com/brokers...l/market-maker
Come with me if you want to live....
  • #6
  • Mar 17, 2018 8:12am Mar 17, 2018 8:12am
Quoting alphadude
No problem if the broker takes the other side; but broker is human and get greedy after a while. he will start hunting stops and making life difficult for profitable traders. i personaly was asked *nicely* by a *friendly broker* to leave because it distubed their profit line. best way for all market participants is to eliminate conflict of interest. for me a market maker broker is a definite No No
Global Prime also is a market maker

"Global Prime’s Hedge Counterparty, Gleneagle securities, being a related entity of Global Prime, usually takes the other side of the transaction and it may choose not to place its hedge contacts directly in the market or it might hedge directly into the market."

99% of the retail brokers are market makers, now being with a market maker should not be a problem, as long as they are trustworthy and honest.
The only question is if they will stay honest in the future.
  • #7
  • Mar 17, 2018 8:14am Mar 17, 2018 8:14am
Quoting Ill-b-back
A list of market Makers. https://www.allfxbrokers.com/brokers...l/market-maker
I don't see Forex.com on "market maker brokers" list. it bought bunch of little brokers...so list is incomplete/inaccurate.
NO MATTER THE SITUATION,NEVER LET YOUR EMOTIONS OVERPOWER YOUR INTELLIGENCE
  • #8
  • Mar 17, 2018 8:35am Mar 17, 2018 8:35am
Quoting Trader-Waldo
{quote} I don't see Forex.com on "market maker brokers" list. it bought bunch of little brokers...so list is incomplete/inaccurate.
This list is very incomplete.
As mentioned in my comment above, almost all retail available brokers are market makers, even if they claim to be an ECN or DMA broker.
Most of those have some kind of counterparty which is related to the broker, like GP and IB, which means they still profit from your loss.

Most of these brokers work with so called A and B books.
  • #9
  • Mar 17, 2018 8:46am Mar 17, 2018 8:46am
Quoting Trader-Waldo
{quote} I don't see Forex.com on "market maker brokers" list. it bought bunch of little brokers...so list is incomplete/inaccurate.
Yes that doesn't surprise me.
If anyone has a more complete list of market Maker Brokers it would be useful.
There were quite a few websites listing market Maker brokers.

Mine (Go Markets), is listed as a Market maker and STP hybrid on the link I posted.
Come with me if you want to live....
  • #10
  • Mar 17, 2018 8:54am Mar 17, 2018 8:54am
Quoting Ill-b-back
Opening this thread to discuss the REAL impact of brokers either acting as counterparty to your trades or simply opening trades in the opposite direction of persistent losers. If your broker acts as the counterparty to your trade, what does it matter? from a business model point of view it makes perfect sense. Over the long run, the vast amount of retailer traders lose, meaning being counterparty to retail trades makes simple business sense. But what is the effect of this on YOUR results? Unless you're operating with a 10 pip or less SL, I would...
Doesn't make much of a fuckall of a difference until you cut into their profits too much(at which point you're asked to leave). Generally it has no impact on the actual trades unless you're scalping without dynamic stops and revealing them to the broker(It doesn't have to actually be in their system. If every trade you take is closed at 2 pips SL then it's not much of a mystery for their systems). Otherwise; it just works out to my benefit if they're manipulating price a few pips. It's the spread that's the real pain in the ass.

It's an excuse for losing traders to feel better about losing. The sooner they accept it the sooner they can get the fuck over it.
"The fun is in the hunt. Not the kill."
  • #11
  • Mar 17, 2018 9:04am Mar 17, 2018 9:04am
Quoting Ill-b-back
{quote} Yes that doesn't surprise me. If anyone has a more complete list of market Maker Brokers it would be useful. There were quite a few websites listing market Maker brokers. Mine (Go Markets), is listed as a Market maker and STP hybrid on the link I posted.
Not sure if there is a complete list, so far i have only found 3-4 brokers that are available for retail traders and don't act as a direct or indirect counterparty without ALWAYS hedging your trades in to the market.

Here is a quote from LMAX: "Execution of orders. We execute each Order you place with us by placing an order identical in all respects apart from settlement in certain cases (a Back to Back Order) on LMAX Exchange or another Liquidity Pool. Note that the Instruments we offer you are, unless otherwise agreed, cash settled rather than physically settled. We place Orders as principal and not as an agent on your behalf; we are the sole counterparty to your trades. When our Back to Back Order is matched, we will open or close a trade on your Account at the same price and size."

So in this way LMAX is always market neutral and will never benefit from your losses.
In the example of GP, they choose to hedge your order or not to hedge your order, which probably means when you are consistently profitable they will hedge your orders directly in to the market. If you are not profitable they will keep the trade in house so they win the commission, spread and loss. you made.
  • #12
  • Edited 9:33am Mar 17, 2018 9:07am | Edited 9:33am
Quoting Dkam
{quote} This list is very incomplete. As mentioned in my comment above, almost all retail available brokers are market makers, even if they claim to be an ECN or DMA broker. Most of those have some kind of counterparty which is related to the broker, like GP and IB, which means they still profit from your loss. Most of these brokers work with so called A and B books.
Yep, I've I've heard and read of these. Frequent losers go to the B Book where brokers act as counterparty.
But it only affects trading outcomes if there are significant slippages, spread widening etc, and mostly for those trading shorter term where every pip counts for profit averages due to spreads significantly eating into profits.

It seems that with deposits over $10,000, the losing rate drops significantly and is why A book brokers often require at least a $10,000 deposit.
Interesting towards the bottom of the link below (dated 2014 admittedly), Global prime claims to be a purely A book broker

  1. One of the pure A book brokers I’ve encountered is Global Prime Australia. How do I know?

Global Prime is able to show you the liquidity receipt for every single one of your trades. Just drop Jeremy from Global prime an email ([email protected]) with your trade ticket number. This is one of their unique selling points, which no other broker will do.

http://www.abundancetradinggroup.com...forex-trading/.

It's a commercial site, but was good reading.

Come with me if you want to live....
  • #13
  • Mar 17, 2018 9:15am Mar 17, 2018 9:15am
Quoting Ill-b-back
{quote} Yep, I've I've heard and read of these. Frequent losers go to the B Book where brokers act as counterparty. But it only affects trading outcomes if there are significant slippages, spread widening etc, and mostly for those trading shorter term where every pip counts for profit averages due to spreads significantly eating into profits. It seems that with deposits over $10,000, the losing rate drops significantly and is why A book brokers often require at least a $10,000 deposit. Interesting towards the bottom of the link below (dated 2014...
First of all, brokers do not care about your stops. There will be some market makers who are trying to delay your order so you get a worse price, widening spread etc, that is true. But you will notice soon enough if you have some experience.

Now one of the reasons GP can show you the liquidity receipt is because they have a hedge counterparty which is related to GP. So if you request a liquidity receipt and you see Gleneagle Securities then this means Global Prime took the other side of your trade, since GP is a part of Gleneagle's.
The retail broker world is much more complex then you realise.
  • #14
  • Mar 17, 2018 9:20am Mar 17, 2018 9:20am
Quoting Redeflect
{quote} Doesn't make much of a fuckall of a difference until you cut into their profits too much(at which point you're asked to leave). Generally it has no impact on the actual trades unless you're scalping without dynamic stops and revealing them to the broker(It doesn't have to actually be in their system. If every trade you take is closed at 2 pips SL then it's not much of a mystery for their systems). Otherwise; it just works out to my benefit if they're manipulating price a few pips. It's the spread that's the real pain in the ass. It's an...
Well I kind of thought so and was in part the reason for this thread.
There is a lot of talk and commotion by FF traders about brokers being counterparty but terming it as "trading against you", as if your trades are under the brokers microscope, they are pushing the market against you and hunting your stop which maybe 50 pips or more (mine are much more as I trade sall size on high TF's).
Being the counterparty is just that, buying what you are selling and selling what you are buying.
As outlined by feline207 above, it needs to be done for the market to exist.
Come with me if you want to live....
  • #15
  • Mar 17, 2018 9:28am Mar 17, 2018 9:28am
Quoting Dkam
{quote} First of all, brokers do not care about your stops. There will be some market makers who are trying to delay your order so you get a worse price, widening spread etc, that is true. But you will notice soon enough if you have some experience. Now one of the reasons GP can show you the liquidity receipt is because they have a hedge counterparty which is related to GP. So if you request a liquidity receipt and you see Gleneagle Securities then this means Global Prime took the other side of your trade, since GP is a part of Gleneagle's. The...
Yes I'm sure it is.
I didn't post the quoted text from the commercial website to challenge peoples' views about Global Prime, but to generate discussion/prompt a response from someone (like you ).

"brokers do not care about your stops"...
I sort of suspected this without being concrete in my thoughts. It's seems more about probabilities, being counterparty to take the spread and be the profiting counterparty (someone has to) of the losing (majority of retailers) trades.
Come with me if you want to live....
  • #16
  • Mar 17, 2018 9:41am Mar 17, 2018 9:41am
Quoting Ill-b-back
{quote} Well I kind of thought so and was in part the reason for this thread. There is a lot of talk and commotion by FF traders about brokers being counterparty but terming it as "trading against you", as if your trades are under the brokers microscope, they are pushing the market against you and hunting your stop which maybe 50 pips or more (mine are much more as I trade sall size on high TF's). Being the counterparty is just that, buying what you are selling and selling what you are buying. As outlined by feline207 above, it needs to be done...
The only benefit of knowing that they take the other side of the trade is to know that there's a conflict of interest. Any information that comes from them with the intention of 'helping' should be taken with a grain of salt and thoroughly scrutinized.
"The fun is in the hunt. Not the kill."
  • #17
  • Edited 12:06pm Mar 17, 2018 11:51am | Edited 12:06pm
I think that due to the restrictions of legalized gambling only being in certain global locations, most people have no concept of spread, or "juice" nor the risk a broker takes by accepting your trade. If most traders lose, then duh. I think the larger firms track you and can switch from being counter party to trading with you if you are a consistently profitable trader. If they kick you out of their business, that is nonsense, and means they are probably a clone that is targeting losers for personal income and not a real brokerage.
You cannot be extraordinary by being normal
  • #18
  • Mar 17, 2018 12:09pm Mar 17, 2018 12:09pm
when i was new,all of the you tube sites was teaching us to place stop loss and even tight stop loss,and my Sl was always been hunt by my broker,so i eliminated placing SL and would keep the trades run,then i noticed that the market would reverse a few pips before my TP. The brokers make our life miserable by playing all these mischieves.
  • #19
  • Mar 17, 2018 12:18pm Mar 17, 2018 12:18pm
Quoting T4Trade
when i was new,all of the you tube sites was teaching us to place stop loss and even tight stop loss,and my Sl was always been hunt by my broker,so i eliminated placing SL and would keep the trades run,then i noticed that the market would reverse a few pips before my TP. The brokers make our life miserable by playing all these mischieves.
These are just excuses used by unprofitable traders.
Of course there might be brokers who try to create spikes to take stops, however there will be very few and most of them will be in Rusia or something.
If you pick shady brokers to start with, well you are kind of asking for it.

A regulated broker (FCA, ASIC, ..) will not do this.
Spread widening of course is something that can happen during certain conditions/news/weekends.
  • #20
  • Mar 17, 2018 12:21pm Mar 17, 2018 12:21pm
Quoting dkrock
I think that due to the restrictions of legalized gambling only being in certain global locations, most people have no concept of spread, or "juice" nor the risk a broker takes by accepting your trade. If most traders lose, then duh. I think the larger firms track you and can switch from being counter party to trading with you if you are a consistently profitable trader. If they kick you out of their business, that is nonsense, and means they are probably a clone that is targeting losers for personal income and not a real brokerage.
Correct, that is why GP has this in their order execution policy: Usually takes the other side of the transaction and it may choose not to place its hedge contacts directly in the market or it might hedge directly in to the market.

Basically this means if you are not profitable they will take the other side so they take the spread, commission and the loss from the trader.
If you are consistently profitable they will hedge so they do not lose if you make a profit and only take the commission.
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