Why would a broker want to go against your trades?

When 95% of people lose their money, and the rest 5% of lucky rich guys win what the 95% lose. Who is really winning that money?

The Br0kers? Or some people working in those br0kers? Or simply PRO's with a PhD in economics or some Brain like Bernanke or whatever that are trading exactly in the opposite direction as you?

What I am unable to understand after reading the First Class Lawsuit against FXCM, is why would the br0ker want people to lose their money?

If in the end, it's supposed that the br0kers are making money with the spreads and fees... It's supposed that they don't earn money when the trades go against people.

When the trades go against people, it's supposed that the 5% or rich lucky brains earn that money, and not the br0kers. Or am I wrong?

If that Scam ponzi sheme programming to make people lose trades really exist and it's proven, then it means that the br0kers are earning a big part of what 95% of people lose. And it would be an EVEN more serious issue, rather than the trick to make people lose money.

Can someone please explain How the Win-Lose issue really works.

Thanks.

my understanding is that retail traders (95% of traders) are trading in a fake forex market setup by their broker. the broker emulates the real forex prices to a certain extent. if you make money, they have to pay you from losing trades or their own money. so, to be profitable they need to statistically guarantee that winners are paid by losers within this fake market.

the premium subscribers (account over 100k) get a different treatment. they have a premium platform and price feed. their trades are likely to be carried out in the real forex market along with the broker's own trades.

These folks you call "brokers" are really Dealers. Just like at the casino.
Real brokers pass thru orders to be offset on a real exchange like CME or NYMEX and make their money from commissions. Plus it is well known that MT4 is rigged for the "broker". Get a real account, trade futures.

go for an ECN, then you won't have the problem. They just make money on commissions from your trades.

Well, and the 5% winners have an edge, while the 95% of losers obviously don't have one.

Trader A places micro lot buy for EurUsd

Trader B places micro lot sell for EurUsd at same price point as trader A.
(perfect world example)

Broker has earned spread from trader A and trader B. In perfect world example.

Broker becomes greedy and sees ways in which he can trade against both trader A and Trader B, stop them out and take both their money. Sometimes this might work by freezing one platform while price moves in favor of that trader causing the other trader to be stopped out.

Price then magically swings the other way and by then that mysterious freezing disappears, but the trade is now negative or not much profit.

If you had the power to control prices, control platforms, control errors of the platform among widening spreads, slippage and miriad of other dirty tricks why oh why would you be happy with just the spread?

They can pass the trade on to liquidity provider or they just hold it in the bucket. BUT, you don't know if they are holding it or if they have passed it on.

I never noticed broker goes against my trades.

SIMPLE:
- Broker = Market Maker
- Trader's Losses = Broker's Gains
- Broker's Gains = Trader's Losses

So now tell me, why broker wouldn't trade against successful trader, if he made two time money more than he invested. Broker should pay from his own pocket.
Do you like to lose money? Will you do something to prevent this, especially, when you can and that is easy.

Peace

LocoGuy!

thats from the oanda thread...it may help..

thats from the oanda thread...it may help..


.........Oh boy the oanda crew working over time, or is it oanda Asia ?

Lets just paint a picture....

Thousands of traders trading in the bucket

you have right in front of you clusters of S/L, and you see them to the pip in the bucket

You are a MM which means license to kill !! Well maybe not yet.....but at least by law you are the buyer/seller of last resort in the bucket, meaning that you can buy against the seller and sell against the buyer!!

Forex is OTC meaning that if you compare our charts among other bucketshops they will all look different anyways ( blame on the liquidity providers)

So ...lets see. You don't think that the broker maybe...errr...you know!! kinda...sort of..... could let a slightly spike fly by....kinda ....you know not with bad intentions at all !!! And make a killing!!

Again no harm intended oanda is a serious broker that watch for their costumers........errrr !!!!

Open your eyes folks !! Stop the naiveness nonsense.... If you aim for the 100 plus pips and have another broker to hedge in case of "technical" problems when your trade is wrong they can't get you.

Now if you are trying to make a living out of scalp or in the 20 pip range you better find a broker from heaven !! Other wise you are toast

Hi, I'm not agree with the opinion. How can the broker trade against each client?! How can he move the price to the different directions. Also I can't say that trader with 5K or 10K Very interesting for the broker to trade against. What is a point of trading against small traders: give them time and the will lose their money any way. I would say brokers trades against big players, $100.000 and up when it does meter for it's annual report - will be this trader successful or not.

Against small but successful trades broker can do something like increase execution time, send requotes.

Good Luck.

Neveroff

They don't trade against you personally, they trade against clusters of SL. They can move price in their platform ( the bucket) as they please and just say that it was the cote they got from their banks.

Charts on OTC forex don't look the same anywhere so they are free to act in a certain range, lets say 20 or even 30 pips once in a while, they can go even further with spread widening.

The only way they cant take you is if you know what you are doing. For as long you trade in the market direction if they trade against you they will lose and they know it, so they may kick you out of their business but they will not screw your money.

for market makers: more traders, more transactions, bigger spread costs.
these days, most brokers are "ECN"
the issue has became: Real vs Fake ECN

Ding, Ding, Ding we have a winner Johnny. Open up door # 3 and tell him what he's won.

hey idiot, what's up with your nedging strategy

I have been trying to ascertain exactly how spread betting brokers generate income in addition to the advertised spread and over-night interest so that I can assess the likelihood of making a profit in reality and avoid excessive direct/hidden charges that some may have. There appear to be many currently operating, which if nothing else indicates that they think there is plenty of money to be made either now or in the future.

If you look at all the comments there are those who believe that such companies can fix the market through price feed manipulation and stop loss hunting for example. Such blatant attempts do not seem likely in most cases at least as it would surely show up on the historic price record for instance. I have also compared feed prices from several different sources and they do show remarkably similar prices and movements. If anything the fixed spread brokers show less volatility than say those quoted by FXCM with a variable spread. In well regulated jurisdictions gross market manipulation would presumably also be illegal and it would be difficult to silence all those involved in setting up and running such a system.

There are however other opportunities to hide charges which I am not sure can be so easily dismissed. The most obvious is rejecting positions / exits if the market moves in favour of the client while always accepting them if it does not. This would probably not occur on every event, only those where there has been significant movement and the broker can claim legitimately that it was within its rights to reject while not giving you a better price when it moves a similar amount in your favour. Averaged over all positions it is not hard to believe that this could gain them at least another pip spread. There is also the opportunity for overnight interest rate manipulation, but by my calculation this is only a fraction of a pip and unlikely to be as high unless the position is held for a significant length of time.

I suspect that the root cause of any price issues would be the business model of quoting fixed spreads in a fundamentally variable spread market. This means that the often repeated statement that brokers simply hedge your bet in the market and don't care if you make money can not always happen unless they are prepared to make an initial loss if the market spread is higher than their quoted values, which it usually is. My guess is that in order to make their own market function they simply take the other side of your position for anything other than significant amounts and those with a proven track record of winning. If this is true then they obviously do then have an interest in you loosing, which history probably shows that on average more do than don't.

I've been reading some stories lately of FXPro putting stipulations on certain EA's and not allowing them to trade or function during times of the day in which the EA typically operates.

The reason they used is "low liquidity" in the market at certain times. When asked if this affected all EA's they said no, just certain ones. LOL.

So when you and your buddies have success at a certain broker, that success will be limited either by you losing your whole account or the broker making up various things to get you to go away.

Why would a broker go against your trades? To take your Money.

I do not agree the idea that brokers would go against their clients. If all they provide is a service so that we can deal with the bank directly, why would they want to go against their client? They make money from the commission anyways. They should be happy that their client is making more money and in turn giving them more business. The real loser in this game is the consumers, the people who actually need to use the currency, whether it is for busienss or personal reasons. If you find a broker that really want to go against you, they can easily manipulate their system and just give out spiky prices which will only trigger stop loss but never on profit limits. This way it is sure win for them. There is no need to really bet against their client to make them lose because we are talking trillion of daily transaction here in the FX market, one will need a sizable amount of capital to really move the market in one direction or another. And making such a move is relatively high risk.

I doubt money market brokers really wants to trade against you.........If you are successful, its more likely they will trade "with" you.........Hell, if you got a proven track record, they can see it, and in all common sense should follow you......

But then again, there is always some trading against you.....EUR/USD........If you buy, there is someone selling.......(Even in ECN, or esle how would your trade get filled?)

So the question is more about how good the spread is.....

A lot of traders blame their b0rker when they lose money. Let them win a few trades and all of a sudden they're a FX Guru!

Nice observation.

I wonder how many of those who switched from “bucket shops” to ECNs have improved their P&L