How the retail Forex works. Dealers vs. Clients

Very interesting statistics.

I thought that retail brokers are just bringing sellers and buyers together and earning money by spreads.

Is there another way to earn money by brokers ?

If you knew a trader won just 45% (at 1:1) of their trades, why would you let someone else bet against them?

the retailer has still high risk to bankrupt, certainly with high leverages, suppose that many started the short position at 1.32 (euro/dollar) and still making big money.
Maybe it can try to optimize the positions for him. But income without any risk is much better.

If this is the case in the future we can get money for an account and without spreads we will be allowed to buy and sell

A good old thread, thanks for resurrecting it guys. I agree with pretty much all igrok says in his initial post about the possible abuses that retail clients may experience, but apart from the blatant nefarious activity, I see no problem with a dealer betting against his clients. Truth be told, the success or failure of a trade submitted by a client is the responsibility of the client. Just because a dealer passes off his inventory does not mean that someone isn't still betting against you. Whenever the client is in profit, you could say he's betting against his dealer.

Because the FX market is so competitive, many dealers must also successfully speculate to stay in business aside from just banking spreads (according to a paper I’ve read somewhere..) I’m sure that Oanda and many other bucket shops operate according to their target inventories, just like the bigger player in the broader market would. This means taking on and holding inventory (client trades), especially when your retail clients are exposing you to ‘favorable selection,’ as opposed to adverse selection.
Being a retail fx dealer would probably be a pretty lucrative venture in most cases, no wonder there are so many of them popping up all the time.

No doubt! Not just the commissions on hundreds of thousands of trades per day. This old thread (http://www.forexfactory.com/showthread.php?t=53237) mentions numerous revenue sources. The Sell side is a sunny side indeed!

If the market maker tells honestly what he is doing, dealer or broker, than there will be no problem.

I have an account at small market maker and they charge 1 spread for the important currencies. don't know what they are doing, maybe i will ask

Hi Igrok

I am coming to you with a concern that I have. A little background and the issue and I will await your response. I am a IT Guy so I can pick up things technically. This being said I am a self learned trader, did the whole baby pips thing and all that stuff and demoed to learn the actual functional mechanics of trading. I am trading a smaller acct which I have had ups and downs. I do trade on a technical level based on bigger fundamentals (sometimes) other times it is pure trend technical because I see where big money is at. I dont really trade H&S or inverted H&S, Flags or any of that although I can but I choose not to. I can scalp 10 or 16 pips at a time or even more but I choose not to. My goal is to position trade.

Now being able to know how to research on my own and live through the evils of the bucket shop which I am trading with FXDD I have learned to get around the stophunts so this is not my issue. My issue is the concern of Price Shading where they are as you say making a second market (market maker if you will).

Problem: Because they are a secondary market it is making it extremely difficult to be exact on my trend lines. I am sure you can understand when I am drawing my first 2 points they can be thrown off and days down the road that trendiness can be way off (Price shading days after day ect.. hence again Market Maker). I want to successfully position trade and I believe this is the problem throwing off trend lines.
I have yet to be come successful trading trend entries because my trend lines seem to possibly and most likely thrown off.

I need a broker and I am looking at these current brokers of a recommendation for someone one who has trade successfully for years:

interactive broker, dukascopy, fxcm, and alpari.

So can you confirm if I am trying to position trade that I need exact pricing from direct market so the huge trend is not thrown off with my trend lines.

Please I wait for your response, I am ready to move to a true broker that will allow a smaller fund such as the ones listed above.

FOr example see the 2 attachments. Which is the right tl and which is the false one.

Do you think FXCM is really a No-Dealing-Desk broker or does every broker in the end keep the trades in their house if possible?

this is old things have changed a bit since then. as long as you are trading min .1 lots you should be OK ecn. go to .01 and you are likely to get pooled or bucketed.