can someone explain to me what these guys are trying to do please - Page 4
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  1. #31
    Join Date
    Jan 2007
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    27
    Quote Originally Posted by pipbull View Post
    Parsush,

    First let me start off by saying i appreciate your persistence in trying to make me understand. Thanks

    I'm not sure i really understood your analogy but i do understand the basic fundamentals of your USD/JPY example.

    I do realize that you are not literally coupled with another trader inside some broker's list, but when you get down to it this is a zero sum game. For every winner there is a loser so in essence there is some form of coupling. Maybe it's not the right word to use but in the end you are either taking someone else's money or they are taking yours. I think we can agree on that. Despite what you may think, that other person is going to be the broker sometimes. They DO make their money in more ways that just collecting the spread.
    Put yourself in the broker's place. They are entering into a business where they know ahead of time that 90% of people who attempt to trade will fail. As a broker, would that not be a tempting idea to capitalize on? Pretend someone handed you a losing trading strategy. For some reason, you knew beyond a shadow of a doubt that this was a losing plan. Assume ethics went out the window for a moment, why wouldn't you be tempted to take the other side of that guy's trades every time? This is not a far stretch from the broker's reality. Of course they want you to believe they make money on the spread only because many traders like you and me would feel that to be a conflict of interest for the broker to be on the other end of a client's trade. But that is reality.

    Check out forexfactory and other forums and you'll see how many people refer to this practice.
    Yes, they DO..especially if you're using a dealing desk broker..who IS the market maker, the ONLY one you have access to...and there are VERY few "non-dealing" desk brokers out there...I.E., a broker that will give you the best bid/offer from MANY different bank sources..if he is a dealing desk broker AND your market maker, then HE takes the other side of your trade..and it is "sometimes" (read ALOT) in his best interest to not lose his money to you...

  2. #32
    Join Date
    Jan 2007
    Posts
    27
    Quote Originally Posted by vmcd62 View Post
    Yes, they DO..especially if you're using a dealing desk broker..who IS the market maker, the ONLY one you have access to...and there are VERY few "non-dealing" desk brokers out there...I.E., a broker that will give you the best bid/offer from MANY different bank sources..if he is a dealing desk broker AND your market maker, then HE takes the other side of your trade..and it is "sometimes" (read ALOT) in his best interest to not lose his money to you...
    For those that need to be educated on dealing vs. non-dealing desk FOREX brokers...very informative site..

    http://nondealingdesk.blogspot.com/

    and the forum to disuss being scammed by a dealing desk broker..

    http://nondealingdesk.com/

  3. #33
    Join Date
    Jan 2007
    Posts
    5
    Sorry for jumping in late. Wow! I didn't even know babypips had a forum. This is great - babypips is one of my favorite forex sites.

    I worked with another trader developing a system based on these hedge principles. On the one hand, yes, this can be done. It results in virtually no risk to the trader. However, there's a lot more to think about here than just finding a no interest broker. One, analysis has to be done to find the most profitable currency pair. That doesn't mean it's the pair that yields the highest interest, either. Other factors to account for include spread and average weekly range. The latter is important because it determines how large of a carry trade you can set based on your leverage. You don't want to be margined out frequently as it adds costs. Other things to consider are transfer fees to and from your brokers. As one account grows, you'll want to transfer funds from broker to broker.

    Anyway, once you do all this figuring, you'll realize that you can earn about 2-5% per month with no risk to your money. It's a great system.

    Regards,

    stockwet

  4. #34
    Join Date
    Dec 2006
    Location
    Wichita Falls, TX
    Posts
    2,805
    Quote Originally Posted by vmcd62 View Post
    Why not just trade two different contracts of a FUTURES currency...buy one and sell the other...that called spread trading, and doesn't require two accounts..
    Because the price of the futures contracts have the interest carry built in to them. That's why they don't match up with the current spot rate and why that difference narrows as the contract approaches delivery.

  5. #35
    Join Date
    Jan 2007
    Posts
    27
    Quote Originally Posted by rhodytrader View Post
    Because the price of the futures contracts have the interest carry built in to them. That's why they don't match up with the current spot rate and why that difference narrows as the contract approaches delivery.
    I learned a bit more about the interest carry trade after making the previous post...but thanks for pointing that out...

  6. #36
    Join Date
    Aug 2011
    Posts
    40
    what are these guys trying to do?

    they are trying desperately to find a profitable way to trade, without actually finding a profitable way to trade.

    just a heads up, if their multiple broker trading system were truly profitable they would not be talking about it...

    instead, they would be lounging on some beach somewhere and sipping margaritas..

    i sometimes wonder if those that are attempting to find a solution to this problem of whatever this problem is actually want to find a solution.

    btw, banks have been engaging in the business of ripping you off for quite a while.. isnt it amazing when some newbie thinks that he is just going to waltz in and turn the tables on the banks? like that is going to happen.

    good afternoon.

    Last edited by bbytrader; 08-27-2011 at 06:30 PM.

  7. #37
    Join Date
    Jun 2011
    Location
    Santa Cruz - Bolivia
    Posts
    1,965
    In case you don't know KISS means Keep It Stupidly Simple.

    Regards.

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