Forex Forum - Ask-an-Expert - GoForex
Click Here to Visit GoForex
 
Sign Up To The Free Newsletter!
ZuluTrade Email:

Go Back   Forex Forum - Ask-an-Expert - GoForex > Expert Forums > Beginners Forex Forum


Read the disclaimer

Reply
 
Thread Tools Search this Thread Display Modes
  #1  
Old 2nd-March-2006, 23:16
breakofinsanity breakofinsanity is offline
Member
 
Join Date: Mar 2006
Posts: 1
Default How do brokerage houses rip you off (3 questions)

1) I have read that the brokerage house that you use to conduct your trades prey upon small investers. I've been trading a demo account for 3 months and plan on opening a standard account with $15k using 100:1 leverage. Anyways, I'm assuming they may be off 2 or 3 pips from the actual rate but can they actually create a spike of 10 pips to reach the stop loss of some of their clients? If they can only manipulate a few pips that don't seem too scary but I was wondering if they can do worse.

2) If I make money on a trade does that mean somebody else loses money? Or is it the case only when you are shorting?

3) Is there a website I can go to or a service I can pay for where I can obtain the true rate becuase the rate that the broker gives might be lagging?

Thank you for your help. Sorry I have so many questions but I'm trying to understand things clearer before i invest more money.

Thank you
Reply With Quote
  #2  
Old 4th-March-2006, 22:33
learn4x's Avatar
learn4x learn4x is offline
Expert
 
Join Date: Sep 2005
Location: Orlando, Florida
Posts: 4
Send a message via MSN to learn4x Send a message via Yahoo to learn4x
Default

There is no true rate. Only in listed exchanges are the exact prices of an instrument unambiguous.

The key is to enter with a set up that givces you a high probability of
a trade. 20-25 PIPS will work well in these set up.
Reply With Quote
  #3  
Old 6th-March-2006, 11:20
DrForex's Avatar
DrForex DrForex is offline
Expert
 
Join Date: Sep 2005
Location: South Africa
Posts: 266
Default Re: How do brokerage houses rip you off (3 questions)

Quote:
Originally Posted by breakofinsanity
1) I have read that the brokerage house that you use to conduct your trades prey upon small investers. I've been trading a demo account for 3 months and plan on opening a standard account with $15k using 100:1 leverage. Anyways, I'm assuming they may be off 2 or 3 pips from the actual rate but can they actually create a spike of 10 pips to reach the stop loss of some of their clients? If they can only manipulate a few pips that don't seem too scary but I was wondering if they can do worse.
You must make sure you do not stand out. Stay below the radar. Don't place close stops to highly leveraged trades. (Your idea to trade with 100K lots while only have $15K need some additional thought, I think).

Nothing stop them from spiking any price which will be a profit for them. Most properly regulated brokers will stay close to the EBS prices which are becoming some some of a "standard" in the online FX environment.

Quote:
Originally Posted by breakofinsanity
2) If I make money on a trade does that mean somebody else loses money? Or is it the case only when you are shorting?
It means your broker have to pay you, best to think that they lose the money to you, thats also wht they will gain when you lose (and why you should be very careful to place high leveraged close stops). It is the type of trading that can cause all sorts of targetting of your account.

Quote:
Originally Posted by breakofinsanity
3) Is there a website I can go to or a service I can pay for where I can obtain the true rate becuase the rate that the broker gives might be lagging?
Prices change 1000s of times epr day in the interbank, everyione quotes there own price as they see fit, no one can really lead or lag the market because no one has in sight in all the prices. Your whole trading apporach, considering that you do not have insight in this kind od information is not to be dependent of such things or open for abuse.
__________________
Chance favours the prepared mind
http://www.goforex.net/bwilc.htm
Reply With Quote
  #4  
Old 17th-December-2014, 10:09
gagansingh gagansingh is offline
Member
 
Join Date: Dec 2014
Posts: 2
Default Re: How do brokerage houses rip you off (3 questions)

Looking at your questions, I think youíve been trading with a Market Maker Broker. And what you have witnessed is indeed what they do. They make money when you make losses. So they actually hunt you SLs i.e. they make sure that your SLs get triggered. So yeah when you make profits they lose money. Also, there were many order processing delays. This is actually done to make sure that you buy at a high price or sell at a low price.
Maybe what you should do is trade with an ECN Broker. They are exact opposites of market makers. They actually earn when you make profit. As their income is from brokerage, so when you make more money, they earn more. So they assist you in making higher profits. Iíve been trading with Finpro and I havenít faced any lagging issues. Plus Iíve made decent profits using their Social Trading feature where I followed successful strategies.
Reply With Quote
  #5  
Old 8th-May-2015, 09:55
pennycourt pennycourt is offline
Member
 
Join Date: Oct 2013
Posts: 7
Default Re: How do brokerage houses rip you off (3 questions)

Forex is a zero sum game what means when you lose somebody earns and wise versa. Sometimes a broker can cheat you especially if the broker is a market maker and pay you the profit from it's own money.
Reply With Quote
Reply




Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Questions to experts... FxGuy Money Management & Trading Psychology 13 30th-April-2014 11:59


All times are GMT. The time now is 02:19.


Powered by vBulletin® Version 3.8.7
Copyright ©2000 - 2017, vBulletin Solutions, Inc.

Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.