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Brokers business question

  • #1
  • First Post: Nov 4, 2020 9:28pm Nov 4, 2020 9:28pm
For example there are 10 clients each funded 1000$, so broker has 10000$. If all 10 clients lost, then broker has +10000$ profit.
If 1 client win 12000$, 9 lost 9000$, it is -3000$ difference for a broker. So where it will get the money? Nowhere? Broker will wait for more newbies to fund and lose to payback the winner? So this is just never ending pyramid until there will be some successful traders found to ruin the profits? Am I right? And there is no difference ecn or other type?
Observer effect
  • #2
  • Nov 4, 2020 10:31pm Nov 4, 2020 10:31pm
That is what we call a bucket shop.
  • #3
  • Nov 4, 2020 11:22pm Nov 4, 2020 11:22pm
Quoting BubaYaga
That is what we call a bucket shop.
And a gateway of misery.
I will tear the world apart for you.
  • #4
  • Nov 5, 2020 1:49am Nov 5, 2020 1:49am
Quoting ryuryu
For example there are 10 clients each funded 1000$, so broker has 10000$. If all 10 clients lost, then broker has +10000$ profit. If 1 client win 12000$, 9 lost 9000$, it is -3000$ difference for a broker. So where it will get the money? Nowhere? Broker will wait for more newbies to fund and lose to payback the winner? So this is just never ending pyramid until there will be some successful traders found to ruin the profits? Am I right? And there is no difference ecn or other type?
After your withdrawal accusations (https://www.forexfactory.com/thread/...6#post13246206), where the problem most certainly can be found on your end you are trying to blame a whole business now.
You are a typical scam crying newbie distracting people having real issues. Go and educate yourself before start accusing! Or just stop trading at all.

A broker earns on your commission/spread markup totally independent of your trading results. What you are describing is a so called pure B book broker, which nowadays are on the retreat all over the globe and therefor no real topic anymore. Nearly all serios brokers today off an at least hybrid ECN model.
You are trading against a liquidity provider on each single trade individually, who earns on your loss and pays for your win. On average most retails lose, so thats the justification for them to offer liquidity for you as a retail trader.
  • #5
  • Last Post: Nov 6, 2020 11:11am Nov 6, 2020 11:11am
Quoting ryuryu
For example there are 10 clients each funded 1000$, so broker has 10000$. If all 10 clients lost, then broker has +10000$ profit. If 1 client win 12000$, 9 lost 9000$, it is -3000$ difference for a broker. So where it will get the money? Nowhere? Broker will wait for more newbies to fund and lose to payback the winner? So this is just never ending pyramid until there will be some successful traders found to ruin the profits? Am I right? And there is no difference ecn or other type?
Not even a tiny bit close to how a broker operates.
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