Why do some brokers not like scalpers? | Forex Factory

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Why do some brokers not like scalpers?

  • #1
  • First Post: Jun 19, 2006 7:55am Jun 19, 2006 7:55am
Just curious. I have a fulltime job so no scalping for me. But I was wondering why some brokers have a beef with scalpers. They get their spread so why would they care?

Squid
  • #2
  • Jun 19, 2006 8:00am Jun 19, 2006 8:00am
Quoting Squid
Just curious. I have a fulltime job so no scalping for me. But I was wondering why some brokers have a beef with scalpers. They get their spread so why would they care?

Squid
imagine on 2pip spread, a scalper takes 1pip profit.. every 10 seconds (as the price fluctates in 5pip range)

I believe they are not there only for the spread..
  • #3
  • Jun 21, 2006 6:13pm Jun 21, 2006 6:13pm
*bump*

I wonder the real answer to this too. I've been doing very well scalping on a demo account. Returned 10% of my account in a day on it. Would the broker stop me from doing this if I were to do it on a real account?
  • #4
  • Jun 21, 2006 6:17pm Jun 21, 2006 6:17pm
I've read several theories. The one that seems the most plausible is that as a scalper u do not give the dealing desk enough time to offset the bet so they end up holding the losing side of the trade.
ECN's on the other hand seem to be setup for scalping as they are a direct passthru to the bank.
In trading, there is no bullshit. You either make money or you don't.
  • #5
  • Jun 21, 2006 8:41pm Jun 21, 2006 8:41pm
Quoting Squid
Just curious. I have a fulltime job so no scalping for me. But I was wondering why some brokers have a beef with scalpers. They get their spread so why would they care?

Squid
i have wondered the same thing. johnfx has some good stories along these lines. bottom line is if you go with a no dealing desk broker its a moot point.
  • #6
  • Jun 21, 2006 10:52pm Jun 21, 2006 10:52pm
Interesting. Thanks, guys!

Squid
  • #7
  • Mar 18, 2008 4:35am Mar 18, 2008 4:35am
I think it also boils down to a dealing desk deciding on the basis of their clients profile whether it is worth hedging or not. And in a business where probably 90% of their speculative clients are losers, the temptation is always going to be to go unhedged. And then a client turns up who is part of the 10% of winners, and I guess it starts to get under their skin ....
  • #8
  • Mar 25, 2008 8:13pm Mar 25, 2008 8:13pm
Quoting Squid
Just curious. I have a fulltime job so no scalping for me. But I was wondering why some brokers have a beef with scalpers. They get their spread so why would they care?

Squid
maybe this can answer your question.

http://www.forexfactory.com/showthread.php?t=9320
If I Go Broke Trying Then I Will die happy.
  • #9
  • Last Post: Mar 26, 2008 3:31am Mar 26, 2008 3:31am
Thanks for that link Moe ... I enjoyed that piece and (think) I learned a lot.
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