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

  • #41
  • Edited 11:42am Dec 13, 2015 11:30am | Edited 11:42am
Quoting NoobPie
{quote} 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...
Yes. You are correct. Like the swiss franc debacle ...
If this ever happens to me I will make sure to send the broker my best middle finger salute. There is no need to add insult to injury (:
In the long run ALL the money from ALL the accounts goes into the broker's pocket. The business model of any brokerage firm is simply to tranfer the customer accounts to the broker's account.
  • #42
  • Dec 13, 2015 1:41pm Dec 13, 2015 1:41pm
Inserted Video
  • #43
  • Dec 13, 2015 4:04pm Dec 13, 2015 4:04pm
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...
Holy shit if you are doing this type of nonsense then you are precisely the type of client the brokers want. So stupid.

That you would even think to type this so others could see it, read it, and attach it to your username, speaks to how utterly perfect a client you would be. Bucket shops need as many people like you as possible. Fish in a barrel.
Congratulations ScalaFX for coming out of the closet!
  • #44
  • Dec 13, 2015 4:07pm Dec 13, 2015 4:07pm
Quoting nubcake
{quote} Holy shit if you are doing this type of nonsense then you are precisely the type of client the brokers want. So stupid.
I actualy don't trade that way, but from the looks of it, some people do indeed trade that way, and once they are about to margin call they redeposit to keep the position open.
  • #45
  • Dec 13, 2015 4:31pm Dec 13, 2015 4:31pm
Quoting NoobPie
{quote} I actualy don't trade that way, but from the looks of it, some people do indeed trade that way, and once they are about to margin call they redeposit to keep the position open.
So you presented this utterly stupid example for what reason? You posted it here as though it has some type of merit, when it has none.

Pointless.
Congratulations ScalaFX for coming out of the closet!
  • #46
  • Dec 13, 2015 5:15pm Dec 13, 2015 5:15pm
Quoting nubcake
{quote} So you presented this utterly stupid example for what reason? You posted it here as though it has some type of merit, when it has none. Pointless.
The example isn't stupid because people actually trade that way. People take a position, have the position go 1000 pips in red, and when they stop out they blame the broker! Or in the case of a member who posted before you, they "deposit" to avoid margin call. You strike me as a poster who doesn't read before replying. Then again most people do that when they feel that they know what they are doing or in this case "typing about".

As for doing what I mentioned towards the end of the post, yes, I have done it (using two accounts in anticipation of a gap) and it works very well. Of course people like your self are to simple minded to see how one could profit trading that way, so you write it off as being pointless. My recommendation for you is to type less, and chart more so you can actually profit from forex.
  • #47
  • Dec 13, 2015 5:31pm Dec 13, 2015 5:31pm
Quoting seahorse
https://youtu.be/W90V_DyPJTs
Good video.... "Who cares about the fundamentals" The sad part is that most of the social traders do, and that is why at the end of the year they give away all their profits away in one sitting. The market, and all markets are created off of manipulation and moves we see today sets up moves we will see later.
  • #48
  • Dec 13, 2015 5:41pm Dec 13, 2015 5:41pm
Quoting NoobPie
{quote} The example isn't stupid because people actually trade that way. People take a position, have the position go 1000 pips in red, and when they stop out they blame the broker! Or in the case of a member who posted before you, they "deposit" to avoid margin call. You strike me as a poster who doesn't read before replying. Then again most people do that when they feel that they know what they are doing or in this case "typing about". As for doing what I mentioned towards the end of the post, yes, I have done it (using two accounts in anticipation...
That's 3 for 3 so far of your posts that have no actual content of value, and has left me cringing at what I'm reading. Think what you like, but your posts vs my posts... there's a difference in the content and themes, and I'd like to think that others have it in them to see that.

This simple-minded person isn't impressed, and now is no longer interested in your worthless posts.
Congratulations ScalaFX for coming out of the closet!
  • #49
  • Dec 14, 2015 2:38am Dec 14, 2015 2:38am
Most people lose at Forex trading because they have no idea what they are doing and don't bother to learn anything and the ones that do attempt to understand and actually place trades are like deer in the headlights and are scared to death to make any profit.

Therefore, most spot Forex brokers act as market makers and take the opposite trade of the morons and scared rats. If you don't disintegrate on your own, then they have to resort to head fakes and stop hunts to force your loss.

That is how the game is played by most traders and brokers. That is why most people lose. Traders don't understand the math, the behavior psychology, nor how to control their emotions. Most brokers take advantage of that.

I also see stories of traders that learn how to win, but then cannot collect their profits. Their broker decides they broke some rule and they can't have their money. I don't know if that is true or not, but if it is, that is yet another tragedy to contend with.
You cannot be extraordinary by being normal
  • #50
  • Dec 14, 2015 2:44am Dec 14, 2015 2:44am
Quoting dkrock
Most people lose at Forex trading because they have no idea what they are doing and don't bother to learn anything and the ones that do attempt to understand and actually place trades are like deer in the headlights and are scared to death to make any profit. Therefore, most spot Forex brokers act as market makers and take the opposite trade of the morons and scared rats. If you don't disintegrate on your own, then they have to resort to head fakes and stop hunts to force your loss. That is how the game is played by most...
Good summary of the facts.
  • #51
  • Dec 14, 2015 8:01am Dec 14, 2015 8:01am
Quoting Mingary
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.
They don't even have to. People will flock to brokers and part with their money without the need for coercion or thievery.

Retail brokers understand something that a lot of people miss through ignorance or self-deception; that speculation is a game of attrition. If anybody is to profit from the rare market trend they have to be able to withstand the noise in between. The average retail trader focuses on intricate forms of analysis. Regardless of their analytical merit they don't have much of a chance unless they have sufficient capitalization and sound risk management. Things that are often ignored.
  • #52
  • Dec 14, 2015 8:05am Dec 14, 2015 8:05am
Quoting Atokys
{quote} They don't even have to. People will flock to brokers and part with their money without the need for coercion or thievery. Retail brokers understand something that a lot of people miss through ignorance or self-deception; that speculation is a game of attrition. If anybody is to profit from the rare market trend they have to be able to withstand the noise in between. The average retail trader focuses on intricate forms of analysis. Regardless of their analytical merit they don't have much of a chance unless they have sufficient capitalization...
Agree 100%

What I wanted to say at first, was not the lack of knowledge of people about the whole market system, but the broker's techniques for stealing money.

I still don't think that brokers "steal" money from traders, I've read somewhere that some brokers make slippage and requotes a part of their technique, but what I don't understand yet, is why should they do that, if "technically" they're not against the trader.
A good strategy for trading is... the opposite of having a bad strategy.
  • #53
  • Dec 14, 2015 8:22am Dec 14, 2015 8:22am
Quoting PowerTrade
{quote} Agree 100% What I wanted to say at first, was not the lack of knowledge of people about the whole market system, but the broker's techniques for stealing money.
I still don't think that brokers "steal" money from traders, I've read somewhere that some brokers make slippage and requotes a part of their technique, but what I don't understand yet, is why should they do that, if "technically" they're not against the trader.
There is no malevolence here. Brokers are simply managing risk on their end. The rules are clear and the retail speculator should do the same.

Brokers don't have to steal, people will line up on their own to fill their pockets.
  • #54
  • Dec 14, 2015 8:28am Dec 14, 2015 8:28am
Quoting Atokys
{quote} There is no malevolence here. Brokers are simply managing risk on their end. The rules are clear and the retail speculator should do the same. Brokers don't have to steal, people will line up on their own to fill their pockets.
So do you think?... (real question, you, as the other members in this thread, have a lot more of experience than me).

That there's no broker agains traders in regular trades? I mean, low lot trades (less than 50 lots).

That's what I've read in this thread and in some others, that traders like us, are always playing against broker.
A good strategy for trading is... the opposite of having a bad strategy.
  • #55
  • Dec 14, 2015 8:39am Dec 14, 2015 8:39am
Quoting PowerTrade
{quote} So do you think?... (real question, you, as the other members in this thread, have a lot more of experience than me). That there's no broker agains traders in regular trades? I mean, low lot trades (less than 50 lots). That's what I've read in this thread and in some others, that traders like us, are always playing against broker.
Regardless of whether the broker profits off a trader's loss, whoever realised that profit did not 'steal'.

If a broker is actually criminal and sabotages clients then call the police. However, the normal relationship between a market maker and the trader is obviously not theft.
  • #56
  • Edited 9:21am Dec 14, 2015 8:52am | Edited 9:21am
Quoting PowerTrade
{quote}I still don't think that brokers "steal" money from traders
HAHA. Go to google and type Forex Broker, or the actual name of a Forex brokerage firm, and then type FINE or LAWSUIT, and then you will be introduced to the real world. I got some money back from FXCM when I used them, but if they had not been caught, I wouldn't have. So, there ya go. By the way, when their Refco investor went bankrupt, they kept all their clients money. I have a friend they stole $20,000 from. Greed changes people, and not for the better.

Here are two links for when they got caught using that virtual dealer plugin that someone posted didn't exist, or broker's do not do.

http://www.financemagnates.com/forex...tric-slippage/

http://www.ft.com/cms/s/0/1b5dcd8c-9...44feab7de.html
You cannot be extraordinary by being normal
  • #57
  • Dec 14, 2015 8:56am Dec 14, 2015 8:56am
Quoting Atokys
{quote} Regardless of whether the broker profits off a trader's loss, whoever realised that profit did not 'steal'. If a broker is actually criminal and sabotages clients then call the police. However, the normal relationship between a market maker and the trader is obviously not theft.
It's not theft until they get caught (:
  • #58
  • Edited 9:51pm Dec 14, 2015 11:50am | Edited 9:51pm
Quoting Mingary
{quote} It's not theft until they get caught (:
Correct!

Similarly, all thiefs and politicians "feel sorry" ONLY AFTER being caught with their hands in the "cookie jar"...

Until that moment none of them feel "sorry"...

Actually - after being caught - they feel sorry ONLY for BEING CAUGHT... and NOT for their actions...
  • #59
  • Dec 14, 2015 12:14pm Dec 14, 2015 12:14pm
Quoting MasterGuru
{quote} Correct! And all thiefs and politicians "feel sorry" ONLY AFTER being caught with their hands in the "honey jar"... Until that moment none of them feel "sorry"... Actually - after being caught - they feel sorry ONLY for BEING CAUGHT... and NOT for their actions...
But I guess making the right moves makes you not stealable.

I mean.

If you have 2000 pips in your favor, how could you get robbed?
A good strategy for trading is... the opposite of having a bad strategy.
  • #60
  • Dec 14, 2015 1:02pm Dec 14, 2015 1:02pm
There are some simple steps preventing a trader from becoming a client of any type of shady brokerage.Only look into brokers that are regulated,so any type of Belize brokerage does not fall in that category from the start.Then check if you "like" their platforms,pricing etc. Then check whether they mention anywhere something about conflict of interest and how they handle them.When you still like what you see,take a close look at the contract you would enter with them.Study carefully the parts that talk about the counter-party of your trades,the technology involved etc. If you are ok with that check with the regulator of the brokerage what exactly they are allowed to do.Avoid market makers in general.A good brokerage does not do any trading themselves they simply route you through to a partner of theirs thereby preventing the partner from tampering with you through being anonymous to him.
Ok if your trading sucks,the best broker in the world wont be able to help you.
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