how can we trust brokers if they are making money from our losses ?

kricka
06 Nov 2013, 16:10

Hi,

it all depends on what kind of execution model the broker is using. Market makers with a dealing desk kind of a broker is definitely trading againt you and will make money on your losses. They also have ways to manipulate the feed with spikes, delays and stop loss hunting.

ECN / STP brokers primarily make their money on spread and commission and therefore do not have any interest if you win or lose. This is why cTrader and cAlgo is such an interesting platform because the execution model is lightning fast, no dealing desk, no manipulation of feed and so forth. A regulated forex exchange would of course be the best but that's not what we have right now. 

rawand
08 Nov 2013, 11:42

RE:

kricka said:

Hi,

it all depends on what kind of execution model the broker is using. Market makers with a dealing desk kind of a broker is definitely trading againt you and will make money on your losses. They also have ways to manipulate the feed with spikes, delays and stop loss hunting.

ECN / STP brokers primarily make their money on spread and commission and therefore do not have any interest if you win or lose. This is why cTrader and cAlgo is such an interesting platform because the execution model is lightning fast, no dealing desk, no manipulation of feed and so forth. A regulated forex exchange would of course be the best but that's not what we have right now. 

do you know that each forex broker is such an exchange !!!!

what do yo think they can do if high percentage of their clients are making money ?

in america NFA regulated brokers must have 20 million dollars therefore they can pay their clients as much if they are right on their positions 

but with other brokers i don't  think forex is safe finincial market especially for those with high amount of money 

Kate
08 Nov 2013, 11:50

RE: RE:

rawand said:

what do yo think they can do if high percentage of their clients are making money ?

In that case they just take their commissions (and may be part of a spread) from those client's trades. This is what most of brokers do.

mikero
09 Nov 2013, 04:29

Only 7% of all Forex traders make money. The rest lose their house, their car, and their shirt.

90% of Forex platforms are brokerage houses. They lose out every time you win. You don't need to be Einstien to figure out how badly they want you to lose. The only remarkable thing is how ruthless they are. These guys don't steal from their grandmothers if they have to, they steal from their own family every chance they get. This is the personality you are dealing with.

And they certainly don't care about 'reputation' coz there's ten more idiots, just like you, waiting desperately in line to get rich quick.

A brokerage house sets the price and it has no bearing on (nor any effect on) the real market other than it sorta kinda follows the banks, when they want to. Other than that, it's whatever they have to do to set a price where winner takes all. It's all 'spikes' right?

As mentioned above, the only chance you have is via STP (straight thru processing), and that is regulated. The agent has a positive interest to see you do well because you'll come back for more. Forget about ECN the crafty brokers claim to be ECN, they are not STP.

A rule of thumb is, If the 'agent' charges a commission, and low spreads, they are stp. They want you coming back over and over again to grab a percentage. It's not a safe bet, it's not concrete, but the best you're gonna get.