Hi friends,
Let's talk about some fundamentals.
Not about fundamentals for trading, but fundamentals about the whole forex industry.
A brief overview of what we all are doing and rethink if it makes sense.
I noticed that there are lots (if not the majority) of scam brokers who take advantage of many tricks to add slippage, widen spreads, re-quoting, and even let you grow your account as much as you want but when you ask for a withdrawal they block your account for many reasons; they bring you back your initial investment if you deposited via credit card but they steal you all your hard-earned profits.
I was meditating seriously about it and I realized that this kind of people will never change this attitude, so I was asking myself if this business is really worth for the average mortgaged guy like you and me. The answer is no. Not at all.
We must start from the point that there's nothing impossible, but there are the stats. 95% losers vs. 5% winners.
So you have to ask yourself honestly:
Even if right now I'm losing like hell... Do I see in myself the potential to someday become one of them, the chosen profitable ones, probably after years losing money?
Do I really have something special?
I bet many of you will say yes, just like me.
We are programmed to be optimistic about our skills as well as our future, and even looking for faith to become more convinced.
That helped our specie to survive thousands of years.
According to stats, 95% of us will never be consistently profitable taking advantage of the game although it is so simple: buy cheap and sell expensive.
I am convinced that the current stats would not be so dramatic if some key fundamentals of the industry changed.
I don't think it would ever be close to 50%-50% winners-losers ratio, but I strongly believe this industry has to be driven by us, the people, not the big banks.
It is a matter of freedom, dignity and ethics.
Financial markets should not be over-regulated to allow all of us decide freely how, when and where we invest our goods, not to allow the big banks and their intermediaries make unfair tricks to the small fishes without any kind of liability.
Going back to our probability to become profitable, why do we have so little chances?
Because they want us to think that when we lose money there's another trader taking it and viceversa.
It's true but there's a but, and it makes the difference.
When we assume this idea we instinctively assume that the Forex market is a Zero-sum game, and it is not.
In a Zero-sum game ALL the money you lose goes to the guy who made your opposite trade, but what happens in the real world?
Your beloved brokers will take their little part out of the game.
No matter how tiny it is or how much they deserve it, we are not talking about that.
The key point is that this fact makes the Forex market a Negative-sum game, and our chances to succeed decrease dramatically.
Whether we like it or not, the ideal scenario of a Zero-sum game is just an unrealistic Utopia and we should not look for that, unless we are stupid.
But I do think we have our right to look for a realistic Utopia where we could trade anonimously (when the big banks or our broker know our trades they can trade against us in particular), where they were willing to be as transparent as possible, and where we all could see fair play in the game.
In fact, the best way right now to make money in Forex is to be a broker and not to be a trader. It is not easy to become profitable when we are dealing with costly commissions.
They get their spread commission, maybe just one pip per trade, it doesn't matter. It is a safe pip many times a day and they will never take a loss on the trades.
So it is a risk-free pip unlike our pips so hard to get under our own risk.
Under certain conditions there could be real slippage or re-quotes, what I don't like is when they take advantage of the route a trade makes through several servers to add negative slippage to the screen price or carrying re-quotes (artificially) on every step of the route of our trade, I don't like when they hedge against the client, when they reject unprofitable trades for them or any kind of excessively greedy behavior or simply criminal.
At the beginning of my trading I was just losing money due to inexperience, but since a few months ago I started to make profit but suddenly losing money again.
Then I tried a different broker and I was profitable again, but one month later started losing money.
Then tried another broker being profitable from the very beginning and a couple of weeks later I was just losing money again. There was something that did not make sense and I started to take a further look.
My shameful surprise was that they were widening my spreads or adding slippage deliberately and maybe other tricks I didn't realize. It happened over and over with no exception for all 7 brokers I tried as I was ruining their market making party.
That being said, I would like to hear your experiences, opinions and recommendations.
I would like to define with you how the best ever Forex brokerage must be.
The worst thing that could happen is that we bring some ideas to the current brokerages who are willing to improve.
So... why not?
I will make a list of the best conditions it should have according to my opinion and your additions.
The purpose should not be to make money blindly. We should be able to sleep with peace of mind.
It should be a profitable business based on having many satisfied clients, not by screwing a few ones.
The best possible Forex Broker should be:
1. Non-Dealing Desk.
2. Raw spreads from 0 pips and small commission.
3. Based in a regulated country. (Preferably the UK, Australia and Cyprus)
4. Additionally supervised by extra regulators in other countries to increase reputation. (Optional)
5. Withdrawals in less than 48h with all methods possible, also instant methods such as e-wallets and equity-linked debit cards.
6. No software to add artificial re-quotes or slippage.
7. STP/ECN.
8. Clients should not lose more money than what they invested.
9. VPS available cross-connected to the server for free.
10. All trading styles welcome.
11. EAs and scalping friendly.
12. Live chat available 24/5.
13. At least MT4 Platform and ECN platform like cTrader available.
14. Customizable leverage from 1:1 to 1:500 (Maybe 1:1000).
15. Segregated accounts.
16. Deposit bonus. Bad idea, it would probably be financed with extra costs for the trader.
17. No fees on deposits or withdrawals.
18. Investor's funds protected by insurance.
19. Transparent release of company profits and Board Members' info accessible to everybody.
20. No conflict of interest.
21. Small deposits available.
22. Ability to create many accounts for the same client, even if they hold different currencies. (Optional)
23. Exchange of funds between two accounts in different currencies at raw spread rate plus flat commission. (Optional)
24. PAMM/MAMM accounts available. (Optional)
25. Zulutrade and Myfxbook available. (Optional)
26. No software to artificially modify swaps.
27. Free tools available for using in MT4 such as scripts, trailing stops, etc.
28. Share 30% commissions with IBs.
29. Share 50% commissions with account managers only for profitable trades. (No-commission penalty for managers on every losing trade)
30. Employees should sign a "Declaration of Principles" and accept future penalties if they act in bad faith against the client.
Who wants to join?
Any good ideas you say in the comments will be added to the list.
If you want to comment you are welcome but please respect and try to be constructive.
The future belongs to the few of us still willing to get our hands dirty.
Let's talk about some fundamentals.
Not about fundamentals for trading, but fundamentals about the whole forex industry.
A brief overview of what we all are doing and rethink if it makes sense.
I noticed that there are lots (if not the majority) of scam brokers who take advantage of many tricks to add slippage, widen spreads, re-quoting, and even let you grow your account as much as you want but when you ask for a withdrawal they block your account for many reasons; they bring you back your initial investment if you deposited via credit card but they steal you all your hard-earned profits.
I was meditating seriously about it and I realized that this kind of people will never change this attitude, so I was asking myself if this business is really worth for the average mortgaged guy like you and me. The answer is no. Not at all.
We must start from the point that there's nothing impossible, but there are the stats. 95% losers vs. 5% winners.
So you have to ask yourself honestly:
Even if right now I'm losing like hell... Do I see in myself the potential to someday become one of them, the chosen profitable ones, probably after years losing money?
Do I really have something special?
I bet many of you will say yes, just like me.
We are programmed to be optimistic about our skills as well as our future, and even looking for faith to become more convinced.
That helped our specie to survive thousands of years.
According to stats, 95% of us will never be consistently profitable taking advantage of the game although it is so simple: buy cheap and sell expensive.
I am convinced that the current stats would not be so dramatic if some key fundamentals of the industry changed.
I don't think it would ever be close to 50%-50% winners-losers ratio, but I strongly believe this industry has to be driven by us, the people, not the big banks.
It is a matter of freedom, dignity and ethics.
Financial markets should not be over-regulated to allow all of us decide freely how, when and where we invest our goods, not to allow the big banks and their intermediaries make unfair tricks to the small fishes without any kind of liability.
Going back to our probability to become profitable, why do we have so little chances?
Because they want us to think that when we lose money there's another trader taking it and viceversa.
It's true but there's a but, and it makes the difference.
When we assume this idea we instinctively assume that the Forex market is a Zero-sum game, and it is not.
In a Zero-sum game ALL the money you lose goes to the guy who made your opposite trade, but what happens in the real world?
Your beloved brokers will take their little part out of the game.
No matter how tiny it is or how much they deserve it, we are not talking about that.
The key point is that this fact makes the Forex market a Negative-sum game, and our chances to succeed decrease dramatically.
Whether we like it or not, the ideal scenario of a Zero-sum game is just an unrealistic Utopia and we should not look for that, unless we are stupid.
But I do think we have our right to look for a realistic Utopia where we could trade anonimously (when the big banks or our broker know our trades they can trade against us in particular), where they were willing to be as transparent as possible, and where we all could see fair play in the game.
In fact, the best way right now to make money in Forex is to be a broker and not to be a trader. It is not easy to become profitable when we are dealing with costly commissions.
They get their spread commission, maybe just one pip per trade, it doesn't matter. It is a safe pip many times a day and they will never take a loss on the trades.
So it is a risk-free pip unlike our pips so hard to get under our own risk.
Under certain conditions there could be real slippage or re-quotes, what I don't like is when they take advantage of the route a trade makes through several servers to add negative slippage to the screen price or carrying re-quotes (artificially) on every step of the route of our trade, I don't like when they hedge against the client, when they reject unprofitable trades for them or any kind of excessively greedy behavior or simply criminal.
At the beginning of my trading I was just losing money due to inexperience, but since a few months ago I started to make profit but suddenly losing money again.
Then I tried a different broker and I was profitable again, but one month later started losing money.
Then tried another broker being profitable from the very beginning and a couple of weeks later I was just losing money again. There was something that did not make sense and I started to take a further look.
My shameful surprise was that they were widening my spreads or adding slippage deliberately and maybe other tricks I didn't realize. It happened over and over with no exception for all 7 brokers I tried as I was ruining their market making party.
That being said, I would like to hear your experiences, opinions and recommendations.
I would like to define with you how the best ever Forex brokerage must be.
The worst thing that could happen is that we bring some ideas to the current brokerages who are willing to improve.
So... why not?
I will make a list of the best conditions it should have according to my opinion and your additions.
The purpose should not be to make money blindly. We should be able to sleep with peace of mind.
It should be a profitable business based on having many satisfied clients, not by screwing a few ones.
The best possible Forex Broker should be:
1. Non-Dealing Desk.
2. Raw spreads from 0 pips and small commission.
3. Based in a regulated country. (Preferably the UK, Australia and Cyprus)
4. Additionally supervised by extra regulators in other countries to increase reputation. (Optional)
5. Withdrawals in less than 48h with all methods possible, also instant methods such as e-wallets and equity-linked debit cards.
6. No software to add artificial re-quotes or slippage.
7. STP/ECN.
8. Clients should not lose more money than what they invested.
9. VPS available cross-connected to the server for free.
10. All trading styles welcome.
11. EAs and scalping friendly.
12. Live chat available 24/5.
13. At least MT4 Platform and ECN platform like cTrader available.
14. Customizable leverage from 1:1 to 1:500 (Maybe 1:1000).
15. Segregated accounts.
17. No fees on deposits or withdrawals.
18. Investor's funds protected by insurance.
19. Transparent release of company profits and Board Members' info accessible to everybody.
20. No conflict of interest.
21. Small deposits available.
22. Ability to create many accounts for the same client, even if they hold different currencies. (Optional)
23. Exchange of funds between two accounts in different currencies at raw spread rate plus flat commission. (Optional)
24. PAMM/MAMM accounts available. (Optional)
25. Zulutrade and Myfxbook available. (Optional)
26. No software to artificially modify swaps.
27. Free tools available for using in MT4 such as scripts, trailing stops, etc.
28. Share 30% commissions with IBs.
29. Share 50% commissions with account managers only for profitable trades. (No-commission penalty for managers on every losing trade)
30. Employees should sign a "Declaration of Principles" and accept future penalties if they act in bad faith against the client.
Who wants to join?
Any good ideas you say in the comments will be added to the list.
If you want to comment you are welcome but please respect and try to be constructive.
The future belongs to the few of us still willing to get our hands dirty.
About broker structure, 95-5% ratio, how brokers make prices, zero sum game check Darkstar 's thread: 
That kind of attitude is what I wanted to see!!! 