Do you really think a broker will let you get away with that? | Forex Factory

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Do you really think a broker will let you get away with that?

  • #1
  • First Post: Jul 22, 2007 9:17pm Jul 22, 2007 9:17pm
It has occured to me that people making SIGNIFICANT money w/ forex will take away from any MM broker's operating capital.

Correct me if I am wrong here:

On any given day for the EURUSD, maybe 500 lots are long and 400 lots are short..... the broker takes a 100 lot short position to cover the exposure, and bets that "95% of traders lose money" so essentially they act as "the house."

If anybody is compounding their wins over time, they eventually will dominate either side of the exposed position. This means that a consistent winner will cost the broker huge money long term.

Now let's say I can make $1 million in 2 years w/ my broker. Most can't cover my wins because it would simply bankrupt them.

What do you guys think?

http://www.cftc.gov/files/tm/fcm/tmfcmdata0704.pdf
  • #2
  • Jul 22, 2007 9:40pm Jul 22, 2007 9:40pm
don't use a MM then?
  • #3
  • Jul 22, 2007 10:28pm Jul 22, 2007 10:28pm
Quoting tdion
It has occured to me that people making SIGNIFICANT money w/ forex will take away from any MM broker's operating capital.

Correct me if I am wrong here:

On any given day for the EURUSD, maybe 500 lots are long and 400 lots are short..... the broker takes a 100 lot short position to cover the exposure, and bets that "95% of traders lose money" so essentially they act as "the house."

If anybody is compounding their wins over time, they eventually will dominate either side of the exposed position. This means that a consistent winner will cost the broker huge money long term.

Now let's say I can make $1 million in 2 years w/ my broker. Most can't cover my wins because it would simply bankrupt them.

What do you guys think?

http://www.cftc.gov/files/tm/fcm/tmfcmdata0704.pdf
they will simply offset that trader trades they won't take on the risk they will put that trader on s.t.p.-straight thru process with there l.p. and would e happy to just earn the spreads.
If I Go Broke Trying Then I Will die happy.
  • #4
  • Jul 22, 2007 10:55pm Jul 22, 2007 10:55pm
Spread-commission (dealing desk) brokers are a dying horse, go with ECNs. ECNs make this discussion irrelevant.
  • #5
  • Last Post: Jul 23, 2007 4:42am Jul 23, 2007 4:42am
Quoting Moe
they will simply offset that trader trades they won't take on the risk they will put that trader on s.t.p.-straight thru process with there l.p. and would e happy to just earn the spreads.
Yes, that's may be the ture cases. They will put the all-time winner on their black list and offer them quotes manually. LOL

btw, what's the meaning of "l.p."

regards
mike
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