If you have a profitable system, will brokers sabotage you? | Page 3 | Forex Factory

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If you have a profitable system, will brokers sabotage you?

  • #41
  • Mar 24, 2015 10:03pm Mar 24, 2015 10:03pm
Quoting Purec
I have a question about a system ... It's true that if you have a consistent profitable system at a time brokers will realize and do something against you just to not make money ?
You know, it's a fun question. For example: I am opening a new order today's morning and I will close it tommorow with another price and with profit. How can broker do something? I don't think that broker will not close this order after I will send a command for closing. Or maybe broker will wait for the changing of price so this order will become loosing for me and then close it?))
  • #42
  • Mar 27, 2015 4:48am Mar 27, 2015 4:48am
If you're system is a scalping system then absolutely. If you are trading say 30 pips and up then not really unless you depend heavily on tight stoplosses then absolutely again.

Quoting Purec
I have a question about a system ... It's true that if you have a consistent profitable system at a time brokers will realize and do something against you just to not make money ?
  • #43
  • Apr 2, 2015 2:25am Apr 2, 2015 2:25am
Quoting Purec
I have a question about a system ... It's true that if you have a consistent profitable system at a time brokers will realize and do something against you just to not make money ?
Did this happen to you?
  • #44
  • Jul 5, 2015 10:47am Jul 5, 2015 10:47am
Most probably they will close your account or invalidate your trade if you make a big profit on single trade. That's why retail forex doesn't produce millionaires. There is direct conflict of interest between traders and brokers. To confirm this I just had a chat with forex.com:

Please wait for a site operator to respond.
You are now chatting with 'Bryan'
Bryan: Hello Tako, welcome to Client Services. May I have your email address to better assist you?
Tako: Is there conflict of interest between forex.com and its clients? Do you trade against client's trades?
Bryan: We are on the other side of the trade that is correct.
Tako: So if client wins money you lose money?
Bryan: We are still compensated by the spread. I'm sure we have contingencies in place to avoid heavy losses.

If you know what you're doing, then trade in stock market. As there is no conflict of interest, stock brokers will never close your account even if you make millions in a day, there will always be a trader on other end.
  • #45
  • Jul 5, 2015 3:17pm Jul 5, 2015 3:17pm
Quoting Nabz
Most probably they will close your account or invalidate your trade if you make a big profit on single trade. That's why retail forex doesn't produce millionaires. There is direct conflict of interest between traders and brokers. To confirm this I just had a chat with forex.com: Please wait for a site operator to respond. You are now chatting with 'Bryan' Bryan: Hello Tako, welcome to Client Services. May I have your email address to better assist you? Tako: Is there conflict of interest between forex.com and its clients? Do you trade against client's...
Let me ask you something .

Is forex.com a market maker or an ECN broker ? Because if it is the first one then YES they will try to rip you off . But if it is the latter then they are st**ids because if you lose money they can't make money from spread . They can't make money if you don't trade .

So answer my question
Make choices and don't look back !
  • #46
  • Jul 6, 2015 2:57am Jul 6, 2015 2:57am
The short answer is YES(MM) & NO(real NDD). For more details read below.

In order to trade on the Forex market, you need an account with a broker that provides access to the interbank foreign exchange market – the place where currencies are traded. It is crucial to know how to choose a broker.

Rules

Regulations imposed on the broker are extremely important. If registered in any offshore area, it is quite likely that they are dishonest. The EU has introduced a common standard – MiFID. It ensures the legitimacy of all licensed brokers. There are requirements for best execution of client’s orders, classification of customers, KYC (Know Your Costumer). You should not be surprised if you are required to provide a lot of documents when opening a new account. As long as the broker is MiFID registered, your personal data would not be misused and/or provided to third parties. The basic principle of this system is that a licensed broker in a European country has the right to operate throughout the Union. The regulation is based at a local level which leaves doubts among some traders whether the rules are strictly followed. If you wish to be extra protected you should know that the most stringent procedures and rules are effectively applied by the regulators in the UK – FCA; Germany – BaFIN; France – AMF.
There are two main type of brokers – Dealing Desk (DD) and No Dealing Desk (NDD)

Dealing Desk (DD)

The first category also known as Market Makers does not provide access to the interbank market. This means that the broker takes your order in but does not guarantee that they will execute it. It is as if they are taking “bets” from their clients. If the client loses, the broker makes money. If the client makes money, it comes from the broker`s pocket. Some of them, but not all, hedge against their clients’ positions on the real market. This creates a conflict of interest.
You may find an honest DD broker, however you should be very careful with most of them. They are aware of the fact that many traders lose money and they try to take advantage of this. Often they are called Bucket Shops. DD brokers also use a few dirty tricks:
Slippage – this is a change in the execution price compared to the one you see when you actually place an order. This can happen with NDD brokers, but only in extreme circumstances.
Re-quoting – it is similar to slippage, but instead of receiving a bad quote the client does not enter a position. In the trading platforms you can find settings for maximum deviation – this is the level beyond which the order would not be executed. From an ethical point of view it is difficult to determine which of these tactics is worse, but they both bad.
Charts manipulation – if you compare charts of DD and NDD brokers you will find some distinctions. The main differences are the huge spikes which cannot be found on the actual market. These are sharp movements targeting stop-loss activation. This is called stop-hunting. Usually they appear during the night when few people are monitoring the charts. From 100 customers probably 20 will seek their rights and this means the broker will make money from the rest.
Fraud – some brokers will refuse to pay your money back. This could happen with non licensed brokers or those who are registered in offshore zones.

No Dealing Desk (NDD)

These brokers execute the orders directly on the interbank market. Their profits are based on commissions for each transaction. Therefore, they are not influenced if their clients loses. They benefit if their customers trade more. You have to be a good trader in order stay longer in the market. Sometimes the commissions are directly charged, in other occasions they are added to the spread.Brokers who put commissions and spreads together are called STP. Those who do it separately are know as ECN. There is no major difference between both types. In the second instance it is clear how much money goes to the broker.
  • #47
  • Jul 6, 2015 8:17am Jul 6, 2015 8:17am
Dear kvv888,

How we can understand which broker is MM and which is not?
  • #48
  • Jul 6, 2015 11:12am Jul 6, 2015 11:12am
Quoting hinkoff
Dear kvv888, How we can understand which broker is MM and which is not?
Market Makers (in the sense in which you understand the term (I wont go in to details about what a real MM means)) most of the times offer fixed spreads, big bonuses and big leverage in addition to the dirty tricks mentioned above.
In the UK for example - firms' are either "full scope" or "limited license" brokers - the exact permission from a regulatory perspective if you are "full scope" i.e. you can take on risk, and therefore opposing trades to your clients" is called being able to "Dealing in investments as principal" without limitation and the second type is an agency broker is called "Dealing in investments as agent" which means they cannot take risk on their books i.e. opposing trades to their clients.
  • #49
  • Jul 7, 2015 2:47am Jul 7, 2015 2:47am
truth is terms like stp, dma, ecn are all bollocks. you're just trading forex CFDs. In the Terms of Service agreement you agreed to, you agreed they have the right to sabotage you when it's no longer in their interest to have you as a client.
  • #50
  • Jul 7, 2015 3:33am Jul 7, 2015 3:33am
Quoting BubaYaga
truth is terms like stp, dma, ecn are all bollocks. you're just trading forex CFDs. In the Terms of Service agreement you agreed to, you agreed they have the right to sabotage you when it's no longer in their interest to have you as a client.
This is not true, if the broker is regulated by reliable authority Like FCA for example. He is obligated to operate in your interest. This brokers have to follow certain rules.
  • #51
  • Jul 7, 2015 8:07am Jul 7, 2015 8:07am
Quoting kvv888
{quote} This is not true, if the broker is regulated by reliable authority Like FCA for example. He is obligated to operate in your interest. This brokers have to follow certain rules.
You describe it very clear, "the broker is obliged" . But he really holds onto his obligations and where is the proof for it? What we see day by day in our trading doesn't make us believe that brokers do.

Jibala
PDF & BCC (Patience Discipline Focus & Belief Confidence Consistency)
  • #52
  • Jul 8, 2015 3:26am Jul 8, 2015 3:26am
Quoting JibalaPasan
{quote} You describe it very clear, "the broker is obliged" . But he really holds onto his obligations and where is the proof for it? What we see day by day in our trading doesn't make us believe that brokers do. Jibala
Yes, obligated does not mean "holds onto his obligations". But this is the reason that you have to look for brokers under the supervision of the right regulatory authority. FCA, SEC, BaFIN this is what you have to look for. Then if you have problem with your broker, you know that you have back up.
  • #53
  • Jul 8, 2015 3:53pm Jul 8, 2015 3:53pm
In all my years of trading, I have never had an issue with any broker. However, I only use regulated brokers with FCA regulation. I advise not to take advantage of signup bonuses and the rollover( amount of money you have to trade) can be significant and also impossible in some cases. As has been said on here, brokers make money very time you trade with the spread.

In brief, do your homework!

MT
  • #54
  • Jul 13, 2015 10:11pm Jul 13, 2015 10:11pm
ive just found that broker just sabotage me when i put SL lol, so i close orders manually and also tp manually
Perfecting your entry will increase your profits
  • #55
  • Nov 3, 2015 2:27pm Nov 3, 2015 2:27pm
A genuine broker will not sabotage your trade as long as your trading system is not a fraudulent one or against the brokers rule
  • #56
  • Nov 3, 2015 3:25pm Nov 3, 2015 3:25pm
Quoting Purec
If you have a profitable system, will brokers sabotage you?

A genuine broker won't; no.

A genuine broker has no incentive at all to do so (quite the opposite, in fact!) because he has no involvement, himself, in the outcome of your trade.

Those situations arise only when one trades with a counterparty market-maker rather than with a genuine broker.

It's really a very simple point (yet sometimes I feel I could visit ten or twenty threads in this forum making exactly the same point in every one). It really is as simple as that!
  • #57
  • Nov 4, 2015 9:36pm Nov 4, 2015 9:36pm
I know a professional trader who got almost a million bucks in his live account. Once he was about to withdraw them, the broker was against him, he couldn't withdraw his balance in his account.
So, it's not just about your trading system, but you gotta be careful when you got a great profit and big balance in your live account, some brokers might be blocking your path to withdraw it.
  • #58
  • Nov 4, 2015 11:46pm Nov 4, 2015 11:46pm
If you have a profitable system you need to be trading it at the right place. Most of these so called retail brokers are not the place. You need a DMA broker. This stands for Direct-Market-Access. If you do some research they're not hard to come by, usually these types of brokers require larger deposits, however if you are serious, going with these kinds of pools of liquidity will prove to be what will allow your trading to be scaleable.
  • #59
  • Nov 6, 2015 2:25am Nov 6, 2015 2:25am
Quoting Purec
I have a question about a system ... It's true that if you have a consistent profitable system at a time brokers will realize and do something against you just to not make money ?
In my experience if the system is based around scalping or quick day-trading, yes brokers (especially MT4 brokers) will be able to delay price action by a few seconds or widen the spread. If you are trading in M15 frame and more they cannot do much.
  • #60
  • Nov 19, 2015 6:58am Nov 19, 2015 6:58am
[quote=Xela;8573418]{quote} A genuine broker won't; no. A genuine broker has no incentive at all to do so (quite the opposite, in fact!) because he has no involvement, himself, in the outcome of your trade. Those situations arise only when one trades with a counterparty market-maker rather than with a genuine broker. It's really a very simple point (yet sometimes I feel I could visit ten or twenty threads in this forum making exactly the same point in every one). It really is as simple as that!
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