If you make money in forex, broker will terminate you?

Beginner Questions
1

I have been reading many Forex reviews about different brokers.

Now I don’t know if this is true or not but a few people said that they had their account terminated by the brokers becaues they actually made money in Forex.

The big banks are known to pay big money to have people like that off the market because in the long run they will lose money.

Now is this true?

2

Not if you trade with a regulated, big broker based in a well regulated country such as the UK or US.

Forex broker reviews will sometimes be about losers wanting to blame someone other than themselves for their mistakes. Don’t believe everything you read, but of course don’t completely disregard it either.

3

There have been some wild and silly statements by newbies on this forum lately!! :frowning:

Here we have one of them. :stuck_out_tongue:

I suggest less reading of fantasy comics and more of the good stuff on this forum.

We veterans here can set you straight!! :slight_smile: :smiley:

4

That’s why I posted this. To get some insight into the topic. I don’t know if its true or not.

5

I’ve heard rumors of this, but I highly doubt any of them are true…

And even if it is true, so what? Even if the broker terminates your account they aren’t going to keep your money. Just take your winnings and open an account with another broker that appreciates your business. :slight_smile:

6

Exactly!! :smiley: :smiley:

7

As funny as this may sound there is no shortage of people losing money. And frankly what most people are able to take from the market is a blip on the radar. You have to remember that we are competing with banks and each other.

The only incentive a broker would have is for you to overtrade to collect the spread.

8

nobody come’s out alive who makes money?

9

Brokers make their money from the spread. For that to happen a trade has to take place. A trade consists of two parties taking opposing positions. Therefore one will lose and one will win. Brokers therefore need both winners and losers or there is no trade

best regards

10

Hi there buddy, as long as you stick with proper brokers that are regulated, you shouldn’t see a problem…

you can do some due diligence of your own and see if there are any complaints against your potential broker to be too!

This link leads to the National Futures Association database for complaints and disciplinary actions of US brokers. BASIC Search

all the best

11

It doesn’t matter if the broker is regulated or not, if you are taking him to the cleaners and he is a Dealing Desk or Market Maker he will start re-qouting you, and other silly things like manual execution. Remember at the end of the day, its you vs them…
As for regulated meaning you will be safe from this… well no offense, but the biggest guilty parties to this are the regulated boys.

12

If you stick with a major broker you should be fine. I think this argument in unfounded in the first place because I cannot see a broker having any incentive to make you lose. They make their money off of the spread and hence It would only make sense that they would want you to trade more often. But I don’t see how it would matter to them whether you win or lose.

13

I don’t think this is completely correct.

Bucket shop brokers (market makers) “warehouse” your trades and match the longs against the shorts.
They just collect the spread.

I am not 100% certain as to what they do with the excess.

To get a definite answer on this question we really need to consult [B]Rhodytrader [/B]- he is sure to know.

14

I dont think you guys get what a Market Maker is…
FX is not a competitive market, you dont have a central location where you can confirm the ticks… as a result your trading on the bids and asks that your broker gives you… ONLY NDD brokers pick up the spread… others and you know who they are ( fixed spreads, more then 2 pips on the Euro/USD type) play against you. As there is nobody else to offset it too.
Check out the Disclosure on the FXCM micro page, they spell it out for you…

15

They hedge the excess in the interbank market.

A Market Maker will only lose money when you win, if they’re unable to offset the exposure by matching your trade against one in their order book, or in the interbank market.

16

yeah i heard this about a broke ron another forum but cant remember

17

im paul nice to meet you guys,
i a new forex trader learning ang hope to be sharing information with yous in the near future. :slight_smile:

18

Thanks for confirming that to me [B]o990l6mh[/B]. :slight_smile:

I did think it was something like that but I did not want to stick my neck out and say something in case I said something very erroneous or stupid. :o :wink: