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Why do people say brokers steal from traders no matter what?

  • #21
  • Dec 13, 2015 12:08am Dec 13, 2015 12:08am
Quoting Mingary
{quote} I have an account with them since about 2006. Never had any issues until now. I sent some money to cover a margin call. The money arrived on time, but OANDA decided to block / hold the funds until I answered some administrative question regarding "cross border" transfers in my account. By the time this was cleared up it was too late. IMO, the total disregard to their fiduciary obligation is a deal breaker. I will be escalating to the FSO.
99% of them are crooks. They differ only in what degree they are crooks.

Finding the 1% honest brokers is the most difficult part. As mentioned above, it is better to move to the Futures arena and trade with Futures brokers, instead of struggling and fighting with cheating Forex brokers.

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  • #22
  • Dec 13, 2015 12:11am Dec 13, 2015 12:11am
Quoting MasterGuru
{quote} 99% of them are crooks. They differ only in what degree they are crooks. Finding the 1% honest brokers is the most difficult part. As mentioned above, it is better to move to the Futures arena and trade with Futures brokers, instead of struggling and fighting with cheating Forex brokers. {image}
Indeed, I am looking into it ....
  • #23
  • Dec 13, 2015 12:22am Dec 13, 2015 12:22am
Quoting Mingary
{quote} Indeed, I am looking into it ....
The only argument for trading Forex is that it is easier and cheaper to experiment on a small Forex account then on a small currency Futures account, where the smallest contract size equals one lot.
  • #24
  • Dec 13, 2015 12:35am Dec 13, 2015 12:35am
Quoting MasterGuru
{quote} The only argument for trading Forex is that it is easier and cheaper to experiment on a small Forex account then on a small currency Futures account, where the smallest contract size equals one lot.

There is no doubt that if one can "graduate" from forex then the logical move is to move to futures.
  • #25
  • Dec 13, 2015 12:40am Dec 13, 2015 12:40am
Quoting JensG
{quote}Genuine brokers
Can you expand a little on what you consider genuine brokers vs market makers? "Broker" is a misnomer in the land of FOREX and either someone is a middle-man or they are a market maker. At the end of the chain you are dealing with a market maker one way or another, whether it takes 1 or 50 liquidity providers up the list before you hit someone who'll be the market maker to your trades.

.....

This isn't directed anymore at JensG: Some of you are under the illusion that your orders go... somewhere. Where do you think they go? Who is on the other side of your trades, in your mind?

As I just said above, at some point you are going to hit someone up the chain who is betting against you, and not even directly. Retail forex trading is a game of dealing with bucket shops. It's that simple. Brokers don't need to game the system when most traders will willingly fuck themselves up and margin-call their accounts. This doesn't mean that there aren't shit brokers who do dodgy things to worsen your trading chances, but they don't last long. Your orders are just a ticket in a game that plays charts in front of your eyes that match what the interbank rates are currently at plus some padding on the spread to pay LP's commission down the chain, but you aren't trading a damn thing or having any impact until you start swinging some decent size such that your orders can't be dealt-with so flippantly anymore.

All a broker has to do is be able to survive against your trades for long enough until you bust-out. That's it. In a zero-sum fair game where money is just shifting back and forth between players the deciding factor on who eventually wins this balanced and fair game is the player who has the most funds to back themself. They can withstand naturally occurring bad runs against them for longer than those with less funding.

Brokers with less money to take-on the risk of your trading activity may be inclined to rig the game further against you than it already is, but that's why it's best to not go with random shitbirds who operate out of some unknown islands lavatory. When have fly-by-night operations of any kind ever been legit? Never.

And even then they aren't necessarily taking-on as much risk as you probably think. They need to withstand every client trading one direction and possibly winning, but that's not reality. Reality is there will be plenty of clients who are more-or-less trading against each other within the bucket, although not at the exact same prices, but just in general and in profit/loss terms that more-or-less match-up. If orders balance each other out then all a broker has to do is thank both sides for losing the spread to them and let clients churn their accounts down to nothing and balance the risk overall risk against each other.

It's like the police allowing rival gangs to kill each other instead of stepping into the fight themselves when they don't need to. They can just let both sides wipe themselves out and then collect the leftover loot. They only need to take action when the power struggle gets too lopsided.

Whether it's your broker, or their LP, or their LP's LP, etc, at some point there's a business/bank (which is the same thing anyway) who is actively taking on the risk of whichever side is lopsided at that time, longs or shorts. They have both the funds to handle it, if not the ability to front-run the orders and profit from it on top of the spread they charge down to the LP below them.

Stick with the reputable brokers and stop looking for the boogeyman. He's in the mirror each time you fuck up a trade, if you must go look.
Congratulations ScalaFX for coming out of the closet!
  • #26
  • Edited 6:05am Dec 13, 2015 1:09am | Edited 6:05am
Quoting nubcake
{quote} Can you expand a little on what you consider genuine brokers vs market makers? "Broker" is a misnomer in the land of FOREX and either someone is a middle-man or they are a market maker. At the end of the chain you are dealing with a market maker one way or another, whether it takes 1 or 50 liquidity providers up the list before you hit someone who'll be the market maker to your trades. ..... This isn't directed anymore at JensG: Some of you are under the illusion that your orders go... somewhere. Where do you think they go? Who is on the...
You are right. Most losing traders can blame only themselves for their losses (the cause of which is almost always over-leveraging). Forex brokers only facilitate the process by their "virtual dealer plug-ins".

The "ultimate" trick a broker can play is disappearing with ALL CLIENT FUNDS. Yes, it can happen and does happen.

I was a victim of such a scam by an Iranian-Canadian man, Reza Mokhtarian who had made his NZ-registered brokerage (Capital Trust Markets) vanish with $500k+ client funds...

This is an online summary of one of his victims: https://rezamokhtarianscamcapitaltru...t-market-scam/

And apparently he is not a favorite person in other FF threads either:
http://www.forexfactory.com/showthread.php?t=542156
http://www.forexfactory.com/showthre...68#post8416568

Reza Mokhtarian before the scam:
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Reza Mokhtarian just recently (that Heineken in his hand was bought from my stolen money):
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  • #27
  • Dec 13, 2015 1:18am Dec 13, 2015 1:18am
Quoting MasterGuru
{quote} You are right. Most losing traders can blame only themselves for their losses (the cause of which is almost always over-leveraging). Forex brokers only facilitate the process by their "virtual dealer plug-ins". The "ultimate" trick a broker can play is disappearing with ALL CLIENT FUNDS. Yes, it can happen and does happen. I was a victim of such a scam by an Iranian-Canadian man, Reza Mokhtarian who had made his NZ-registered brokerage (Capital Trust Markets) vanish with $500k+ client funds... Reza Mokhtarian before the scam: {image} Reza...
Unless you have something substantial to show about VDP then it's just more hypothetical boogeyman's to blame. If every single broker used VDP, or some variant thereof, does this mean anything? No - Nothing more than the fact that it facilitates automating setting the correct bid/ask plus spread padding so that they take their cut before passing it up the chain to the next fuck who does the same thing to them.

The MT4 server software is surely flexible, thus permitting all manner of shenanigans, but this doesn't equate to brokers doing dodgy things. It just means they don't have to have some dickhead sitting on his computer manually approving or denying everyones orders as they come in.

Hysteria around virtual dealer plugin/s is akin to hysteria around vaccinations and autism. You have to back the hysteria with something tangible before it can be given any due respect.

As for that guy, well, shit. I'm not sure there's much to say on the matter when you those are the types of images you find on the fuckstick. You wouldn't let him mind your pet, let alone handle your trades and account legitimately.

You lay with dogs and you'll wake up with fleas. There's nothing racist or prejudiced about not wanting to deal with someone who looks like a slimy fuck.
Congratulations ScalaFX for coming out of the closet!
  • #28
  • Dec 13, 2015 1:19am Dec 13, 2015 1:19am
Quoting MasterGuru
{quote} You are right. Most losing traders can blame only themselves for their losses (the cause of which is almost always over-leveraging). Forex brokers only facilitate the process by their "virtual dealer plug-ins". The "ultimate" trick a broker can play is disappearing with ALL CLIENT FUNDS. Yes, it can happen and does happen. I was a victim of such a scam by an Iranian-Canadian man, Reza Mokhtarian who had made his NZ-registered brokerage (Capital Trust Markets) vanish with $500k+ client funds... Reza Mokhtarian before the scam: {image} Reza...
I don't see the problem. He is just your average forex company CEO.
  • #29
  • Dec 13, 2015 1:23am Dec 13, 2015 1:23am
Quoting Mingary
{quote} I don't see the problem. He is just your average forex company CEO.
Fair call except you don't expect legit firms to be run by someone who looks like a quasi-pimp / gimp. You save that shit for the back room. It's not something you plaster on the internet if you want to be taken seriously.

It's around now when I expect some muppet to come along and start calling me a broker's stooge and getting paid. My body is ready - Bring it on.
Congratulations ScalaFX for coming out of the closet!
  • #30
  • Edited 6:29am Dec 13, 2015 1:26am | Edited 6:29am
Quoting Mingary
{quote} I don't see the problem. He is just your average forex company CEO.
You are funny, Man!

Yeah, "your average Forex CEO".... He would be a good candidate for the TV-series of "American Greed", even though he is not American.

They could start the episode with this photo:

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OR WITH THIS:

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  • #31
  • Dec 13, 2015 6:35am Dec 13, 2015 6:35am
People putting the blame on brokers when losing are most of the time lazy people that need some hot chili peppers stuffed at their bottom.
Spread spikes and such can all be taken in consideration when creatig your own EA; all these broker activities can mostly be countered by smart coding.

Now stealing your funds or not able to withdraw, thats a different story...
  • #32
  • Dec 13, 2015 8:32am Dec 13, 2015 8:32am
What I don't agree on is that the "Cause of most losses is over-leveraging". If a person has 10,000usd in their account, and only places a .01 lot size wager, it would be pretty much for him to margin call. Yet, that same trader would be able to survive a 10,000 pip drawdown.... so would that make his trade and good if he goes in red 5,000 pips and then eventually closes it for 500 pip profit? The answer is NO! Over-leveraging isn't the cause or the main cause of the losses of most traders. The cause of their losses has everything to do with how they believe the market works, and what the market will do next.
That then leads us to the "zero-risk" theory that someone mentioned earlier. The reality is the only way a broker has "zero-risk" while being the middle man in a forex transaction, would be, if a client isn't allowed to use "ANY LEVERAGE" at all! Being that brokers offer "LEVERAGE" that means they take on the "risk" of having their loan turn into a big fat loss. Don't believe me? Well think about this situation.

Under normal market conditions say a broker offers you 1000:1 leverage, in which, you use 100% of your equity. Essentially, if the trade goes against you 10 pips, then you are stopped out! Now most people say, the broker offers you that much leverage, so they can bank against you when you stop out. That may indeed be true. Now what if I do this.
1) Open two accounts
2) Under two different names.
3) I use 1000:1 leverage
4) Right before market closes I go long with 1000:1 leverage and 100% equity.
5) In the second account I go short with 1000:1 leverage and 100% equity.

Then when the market opens up, the market gaps says 100 pips. One account will have a profit of 1000%, while the other will have a loss of -1000%. Guess who takes the loss for 1000% NOT THE CLIENT, but the broker! Leverage, and any use of it, can lead into the broker taking the hit, because the broker is fronting the money that we need to use the lot size we want. So unless a broker offers you "zero leverage" then the broker is taking a much higher risk then all of their clients together!
  • #33
  • Edited 9:03am Dec 13, 2015 8:51am | Edited 9:03am
Quoting NoobPie
What I don't agree on is that the "Cause of most losses is over-leveraging". If a person has 10,000usd in their account, and only places a .01 lot size wager, it would be pretty much for him to margin call. Yet, that same trader would be able to survive a 10,000 pip drawdown.... so would that make his trade and good if he goes in red 5,000 pips and then eventually closes it for 500 pip profit? The answer is NO! Over-leveraging isn't the cause or the main cause of the losses of most traders. The cause of their losses has everything to do with how...
"Guess who takes the loss for 1000% NOT THE CLIENT, but the broker!"

No risk to the broker at all.. The broker takes the money in your account via the margin call. His gain, your loss (your friendly neighborood fx bucket shop is not that stupid)
  • #34
  • Dec 13, 2015 9:43am Dec 13, 2015 9:43am
Quoting Mingary
{quote} I have an account with them since about 2006. Never had any issues until now. I sent some money to cover a margin call. The money arrived on time, but OANDA decided to block / hold the funds until I answered some administrative question regarding "cross border" transfers in my account. By the time this was cleared up it was too late. IMO, the total disregard to their fiduciary obligation is dishonest. I will be escalating to the FSO.

That proves my point right there. The guy DEPOSITS money to cover a "potential margin call" and then he uses an excuse about the broker mentioning "cross border" transfers.
  • #35
  • Dec 13, 2015 10:02am Dec 13, 2015 10:02am
Quoting NoobPie
{quote} That proves my point right there. The guy DEPOSITS money to cover a "potential margin call" and then he uses an excuse about the broker mentioning "cross border" transfers.
I think you are saying the broker found a reason to hold the funds with total disregard to a customer's best interest.
  • #36
  • Dec 13, 2015 10:32am Dec 13, 2015 10:32am
broker will want commision..probably trading wasnt profitable,loss the account then get commision from upper guy.i was a financial consultant and my account went empty. I was mad at my manager because no advise given to save the account.even my friends client account been given false information.the account goes empty in a day. I bet my money,inside play(they only have one person in the office that have brokage certificate). just dont trust any broker.the good one with a lot of credential will play their own money.why brokerage for people and made them rich.its only my opinion.the other broker fall into other categories.just looking for easy commision.(could be from upper guy)..my advise learn to trade.put order sl/tp.go to work.check it when u hv time..i havent found broker that play for the sake of game.maybe if he/she exist and want to ride flow of trade.surfing profit.just for game.then trust that one.people got greedy.big profit=same commision,lost it but got salary+commision+long time contract.never know what the office offer.
  • #37
  • Dec 13, 2015 11:14am Dec 13, 2015 11:14am
Quoting Mingary
{quote} I think you are saying the broker found a reason to hold the funds with total disregard to a customer's best interest.
How would you consider "funding a dead in the water position" in the best interest of the customer? All in all, you took what ended up being a bad position, and to make it worse you wanted to redeposit to avoid margin call. Seriously, what does that say about you as a trader, and as far as the brokers excuse for not accepting your deposit right away, I honestly don't believe it! Those type of issues should be supported with facts, and not just with words from someone who has just admitted of "almost margin calling" and to avoid it, redepositing.
  • #38
  • Dec 13, 2015 11:19am Dec 13, 2015 11:19am
Quoting Mingary
{quote} "Guess who takes the loss for 1000% NOT THE CLIENT, but the broker!" No risk to the broker at all.. The broker takes the money in your account via the margin call. His gain, your loss (your friendly neighborood fx bucket shop is not that stupid)
You should read the situation again. If account A margin calls, then the client will simply lose 100% of what he/she deposited. Yet if the account goes into 1000% loss (meaning 10x the original deposited amount) then the BROKER will have to assume the remaining loss, as they fronted you the money which allowed you to "over leverage". The situation I set forth reveals how the broker has ALL the risk compared to the client who has minimum risk as the client can't lose more then what he/she deposited, while the broker can go bankrupt for allowing their clients to use leverage, should a black swan event, or a simple GAP occur against the clients position.
  • #39
  • Dec 13, 2015 11:27am Dec 13, 2015 11:27am
Quoting NoobPie
{quote} How would you consider "funding a dead in the water position" in the best interest of the customer? All in all, you took what ended up being a bad position, and to make it worse you wanted to redeposit to avoid margin call. Seriously, what does that say about you as a trader, and as far as the brokers excuse for not accepting your deposit right away, I honestly don't believe it! Those type of issues should be supported with facts, and not just with words from someone who has just admitted of "almost margin calling" and to avoid it, redepositing....
I see that you would be ok with your broker putting a hold on your account deposits indefinitly. You must be a "preferred customer" at your local fx bucket shop. (:
I think you must be very naive to believe that your favorite broker does not have meetings at least 3 times a week on how to get the most money from your account.
  • #40
  • Dec 13, 2015 11:30am Dec 13, 2015 11:30am
When a person is about to margin call, and they refund their account to prevent it... It's like doing this...

https://www.facebook.com/deasia.haye...2760644387420/
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