broker is trading against me?...are u kiddin?

[DAVE T]

How am I to believe that I am being treated fairly by a broker when he is taking the opposite position to me in the market? I am having trouble understanding how he is expected to be fair when he stands to lose money if my trade is successful. There is absolutely no way for me to be sure that my order is being placed correctly and without bias. They use terms like "slippage" and "requote" to justify these inaccuracies. In all of my research ...and it is quite extensive....it appears to me that the only way you have a chance at success in this market is go with a broker with very high liquidity. This also means you have to put up substantial capital to trade successfully. Thats fine...I have no problem with that....but why all the b.s about mini and micro accounts. C'mon guys lets be real...you ain't makin' money without a substantial initial cash investment. Stop pandering to these brokers who are just out to rob the average joe of his hard earned money. Tell it like it is!!!!

[rhodytrader]

You really don't need to open new threads each day saying the same thing.

I will repeat what I said to you (and others) before.

Brokers DO NOT trade against their customers.

A market maker will take the other side of your trade when you make the trade. That is true. But they have loads of other customers with whom they are making trades at the same time. As such they are continuously offsetting positions against each other. They do not want price risk. They want to buy at the bid on one side and sell at the offer on the other size over and over again to make the spread. If they end up buying more than they sell on the customer side, meaning they have a net short position, they go in to the market and buy to offset the risk.

[tymen1]

Thank you, Rhodytrader for an educational answer.

Kind Regards, Tymen Wortel, Perth, Western Australia.

[bazooko]

Since everyone says that forex is gambling then let me put it in trems that relate to gambling. When you goto the casino and play the "slots" you put your money in the bandit pull the lever and hope you win. That is more or less the stock market. Putting you money in the bandit is like paying your broker. Pulling the arm is your gamble that the stock will go up. Granted this may not be a good anolgy but I hope you get the idea.
In the forex market you goto the casino and go straight to the poker table. The dealer deals the cards to 7 or 8 players and the person who has the highest hand wins the whole pot. The difference with forex and poker is that you are placing a bet against 1 other person not 6 or 7. Also you can get an edcauted play. It is like when the dealer takes the cards away and flips them over so all the players can see what cards have been played. When the game (or trade) is over you give the dealer a tip or pay the broker a spread. So you see it is in the brokers best intrest to keep you in the game because the more trades you make the more tips they get. The broker does not make money off of you by losing money, and if you continue to feel this way then maybe it is time for you to quit, becuase your parinode attitude will only eat you up.

[tymen1]

Originally Posted by bazooko

becuase your parinode attitude will only eat you up.

trems=terms

becuase=because

parinode=paranoid



Otherwise, good post.

Regards, Tymen Wortel, Perth, Western Australia.

[rhodytrader]

Originally Posted by bazooko

Since everyone says that forex is gambling then let me put it in trems that relate to gambling. When you goto the casino and play the "slots" you put your money in the bandit pull the lever and hope you win. That is more or less the stock market. Putting you money in the bandit is like paying your broker. Pulling the arm is your gamble that the stock will go up. Granted this may not be a good anolgy but I hope you get the idea.

Actually, I don't think a binary chance game like slots is a good gambling analogy for trading in the markets for one simple reason. In trading it's not an all or nothing thing. Because you can use money management to limit the amount of your ante (or whatever you want to call the money you put down), it's not a good comparisson.

In those games, like poker, where you combine chance with skill, though, there are definitely similarities.

[abner]

i would like to see my broker trade against my positions, but seeing that i hegde every one of them it would be kind defeating the purpose

lololol,

who ever told you that brokers do that had to have lost money.

[DAVE T]

so many trading books and trading systems alike all state that one of the biggest reasons for failure in the forex market is an underfunded trading account. Listen guys, I am not trying to be one of those negative idiots who has lost his shirt and is spewing all kinds of negative crap on these forums. I am merely trying to avoid this. I just want the straight poop on the issue. You can have the greatest trading strategy known to man but it only stands to reason that loses are to be expected. If your loses are compounded by leverage..doesnt it stand to reason that new traders should avoid high leverage trading. How come you guys dont warn against this in all of these forum threads? Could it be those advertising banners I see prominently displayed at all time? People get the wrong idea thinking they can earn big profits with a minimum deposit...its a disgrace. C'mon babypips you say as much in your teaching platform.....hey rhody...save your free advertised opinion!!! ok bro

[bazooko]

OK ty and rhody I never said that I could spell. Next time I make a post I will email you first for editing. I hope that will help. And rhody I said this may not be a good anolgy. But I was trying to explain it in a simple term. It seems like dave is missing the point. And ante is the way I would have spelt it. Lets ask ty if that is right.
Dave yes your losses are componded but so are your wins. If you are trying to warn people of the hazards of the forex market then I commend you for trying but I think that you are going about the wrong way.

[rhodytrader]

Originally Posted by DAVE T

so many trading books and trading systems alike all state that one of the biggest reasons for failure in the forex market is an underfunded trading account. Listen guys, I am not trying to be one of those negative idiots who has lost his shirt and is spewing all kinds of negative crap on these forums. I am merely trying to avoid this. I just want the straight poop on the issue. You can have the greatest trading strategy known to man but it only stands to reason that loses are to be expected. If your loses are compounded by leverage..doesnt it stand to reason that new traders should avoid high leverage trading. How come you guys dont warn against this in all of these forum threads? Could it be those advertising banners I see prominently displayed at all time? People get the wrong idea thinking they can earn big profits with a minimum deposit...its a disgrace. C'mon babypips you say as much in your teaching platform.....hey rhody...save your free advertised opinion!!! ok bro

The warnings you see in books, etc. about underfunded accounts are not wrong, but I would restate what you've said. It is not specifically high leverage that causes so many people to blow up. It is also not specifically small trading account size. It's trading too large relative to your capital.

For example, I could deposit $100 with Oanda and trade $50 positions by applying 50:1 leverage on $1 of margin. I don't think too many people here would suggest I'm taking too much risk, and I can acheive % returns just as high with that $100 as I could if I had $50,000 trading the same strategy. Of course, the actual $ amount wouldn't be the same, but that's not the point.

On the flip side, if I put up $5000 for an account with another broker that will only trade full lots ($100,000), then I think unless my strategy is very, very low risk I am probably overtrading in terms of position size vis-a-vis my capital.

But even by saying that in the second example one should put up at least $20,000 in the account (or whatever number you choose) doesn't fix the basic problem of trading too big. If you have $100k in your account and risk 20% at a time, then you are almost certainly trading too big and are just as likely to blow up your account as the guy with the $5000 account trading full lots. That's why the question should be about position size relative to your account and not about absolute account size.

The other reason the small account size thing is noted as problematic in many places is because of transaction costs. In a situation where you're paying commissions on your trades, that's a definite consideration. In forex, where in most cases there are no commissions, that's not really a problem.

By the way, maybe if you spend a little more time reviewing the threads, and less time lobbing personal attacks at folks just trying to help new traders, you'd see that indeed there is a lot of discussion of leverage and it's application.