I plan to quit forex!

Hey, hanover.

Regarding this statement, how br0kers will treat you if you're winning consistently? They'll just have nothing to do about it?

Pure theory discussion.

If you are doing so poorly with forex and your brokers, then it might be a good idea to quit this activity. I have been with Oanda for 6 years and now they even offer me a small payback for all my daily trading activity. It is not much but it pays for some of the interest that is charged on short position.

Here is my understanding. Somebody please correct me if I'm wrong.

It depends on the br0ker. If a br0ker is a genuine STP, they make their money from spreads/commissions, and simply bundle up your orders with other orders in the same instrument, and pass the net result on to the interbank market (see the attached diagrams), which matches up these orders with opposing orders from other traders and br0kers. In other words, you get treated fairly.

However, many br0kers apparently operate as market makers (MMs). If you're a winning trader, you're put on their 'A book', and get treated as if they were an STP. Whereas new and/or losing traders (i.e. the vast majority) are kept on their 'B book', which means that the br0ker actively trades against you: obviously if you keep losing, and he takes the opposite position, he keeps winning. There are apps available that gather data on retailers' behavior** for br0kers to study. Check out the threads by mooniekool (who used to work for a brokerage), e.g. here and here.

[** Conventional logic would suggest that many retail traders attempt to:
(1) "buy low, sell high", which means they're effectively trying to "catch a falling knife", rather than trading in the direction of established momentum; and
(2) they bank their profits quickly, and leave their losing trades open, hoping that they will eventually return to profit.]

Trading against you might also include the use of MT4 dealer plugins (VDPs), which manipulate price or widen spreads to take out your SL, slow execution to increase slippage, and other similar nasties. Most newbies like to scalp, and it's easier for a br0ker to justify a 2 pip discrepancy in price than a 200 pip spike.

If you think that your br0ker is cheating you, the solution is obvious: close your account, and take your business elsewhere. To find out if your br0ker is manipulating price to cheat you, simply check his price feed against the feeds of other br0kers. Also, to get around VDPs but still use MT4 indicators for your analysis, consider the possibility of performing your analysis on a demo account with one (MT4) br0ker, while running your live account with another (non-MT4) br0ker.

There are conspiracy theorists who believe that all br0kers are MMs, e.g. here. Money involves ego, and I suspect that a lot of folk want to put the blame for their losses elsewhere. Personally, I've had small accounts with Pepperstone and AxiTrader, and I have no evidence that either has cheated me. All my losses are either the result of my own silly mistakes, or my inability to forecast future price movement with perfect accuracy (some reasons in this post).

Here is another post of mine that has links to compare different br0kers, and also further explanations of the terms STP, ECN, NDD, and how these different types of br0ker operate.

Thanks for the reply.

The above means the broker can see the indicators we use and therefore be aware of when we are going to open our positions and what they would be?

he quit already?

I don't think MT4 br0kers can see a trader's indicators. Your trade positions are kept on the br0ker's server (that's why you can log into your trading account on a different computer, and see your orders), but your indicators, EAs, charts, templates etc remain only on your computer.

Instead, MT4 includes an option that br0kers can run, which simply takes the opposite positions of all clients they nominate as 'B book'. So (for example) whenever one of these traders buys, MT4 would automatically place a sell order on behalf of the br0ker. And when the trader exits this position (the exit is effectively a sell order), MT4 would automatically place a buy order on behalf of the br0ker. Hence whenever the trader loses, the br0ker wins, and vice versa. Since novice traders lose more than they win, the br0ker profits by doing this. I've never worked for a br0kerage, but I think it operates something like that.

why quit... your sounding like a gambler when you say forex gives me no luck.

like any business u are going to have times where you make money and loose money.

last year I made 260k profit and could pfade
320k but lost 60k.

this year I have already made 50k plus..
tips:
1) stick to three different types of pairs
2) never have open positions when u are sleeping
3) research and read like hell
4) be discipline

I have seen some loss recovery EA's that use trading zones and multiple lots to recover losses. I have my own ideas I would like to try out so I have decided to build my own EA. This in itself will be quite a task!
I was hoping someone would be kind enough to explain to me, or better yet, point to a snippet of code that will enable me to calculate the breakeven point of multiple buys and sells on aÂÂsingle currencyÂÂpair. ÂÂ
If I'm short 1 lot and price goes against me x amount of pips, I hedge my trade with a buy order at 2 lots. These two trades combined will have a breakeven point. How can I calculate that?
I would be most grateful for any help!
Thank you.ÂÂ

Example: suppose you sell 1 lot at 1.0100 and buy 2 lots at 1.0200, i.e. when your sell trade is -100 pips. When price reaches 1.0300 your sell trade will be -200 pips x 1 lot, but your buy trade is +100 pips x 2 lots, which is breakeven (-200x1 + +100x2 = 0, ignoring transaction costs). Hence if the lot sizes are 1:2 ratio, then the BE point will be another X pips north, where the difference between the sell and buy prices is X pips.

In my humble opinion, you are getting too complicated in trying to avoid losses. If you can contemplate it, I have not used a stop loss since the last quarter of 2015 and have stopped losing money. In fact, my $62000 have grown to $113,000 in a little over a year. I know that this is "heresy", but it works for me and I am not going back to tradition again. Observe what the market does, how it does it, incorporate other people's ideas into your trading, as long as they work, and develop your own trading system. When you find one that works for you, shut out all other opinions and enjoy your gains and peace of mind.

this is wonderful info!

Ohhh. that's a hard statement! I going to follow this thread and see how you're doing now. I am just started, but take my time to learn some basic stuff as: recognize candlestick patterns, money management, emotions, and patience. Hope you find your way back to the trading business.

Trading is just a skill that requires great amount of time, patience and experience. Like a child learns to walk, failed many times at the beginning, a trader needs to stand up and keep trying. But it is always better to start with very low amount of money and don't expect to become billionaire in one day.

I can't say you should stay. But I have "quit forex" a couple of time. My problem in forex is not that I don't winning the trade, I take higher risk when it goes well and dosen't stick to the system, If i start with 100 usd and walk that up to 200 using 1:500 and trading 0.01 lot. I start using lot 0.02-0.1 and then take a wrong step and all money is gone.

Maybe you are doing similar mistake. I can recommend you to use Signals or "auto trading" to see the discipline and the strategy that other use and maybe see where you have done wrong and add that to the strategy.

Just my advice :-) If you quit or not I will wish you a Good luck in the future!

It has been just a little over one year since the original post was made. I’m curious, did you quit Forex? If yes, I hope you have found some other fulfilling occupation to make you happy. If not, how are you doing? I hope your fortunes have improved.

i don't think its possible to quite trading, maybe quite trading with real money, but not quite trading all together

I don’t know about that. Some people do move on eventually, even though Forex can be quite addictive.

Then just quit, no need to open a thread on FF.

I always told myself to quit fx once I burn my account.

But I burned many times, still trading

You are probably right! If you want to quit Forex trading it's your call. Success in any trade is not for quitters. If you don't have the guts to lose some and win handsomely when you have the opportunity, keep improving your skills with patience and trade an efficient functional system you really master, you won't make it in Forex trading. So go on and quit! Otherwise, learn to trade safe and prosper.

KP