Hi there,
I wonder if someone out there could clarify two things for me?
Do not fear your broker. Use a strategy the puts on stops wide enough to make it impossible for such nonsense to benefit a broker. If some brokerage has prices swinging way off the global market, he will probably come out the major loser, especially long run.
As far as who the loser is on a trade goes, it is not a single person. In fact, theoretically, it should be possible for every forex trader to run a profit taking in the losses of hedgers. The hedgers’ money is what we are truly after as an industry.
Who are the hedgers? Businesses, banks, governments, etc. that have currency risks they wish to offset by trading with forex traders. If a business has $100,000,000.00 USD in receivables due in 30 days and has a domestic currency of the euro, it stands to lose big on any move upward of the EUR/USD pair. So they want to short the EUR/USD and get traders to take the other side of their position. If they lose on their books, they gain in the forex. If the gain on their books they lose in the forex. This does come at a cost to them, but they would rather focus on their business operations, take a small certain loss, and have a more neutral currency risk so they take the hedge position. Forex traders as a group should be able to find and trade at the right rates to be the long term winners in that arrangement in the same way that insurance providers do for their clients.
The real opponent you should worry about is your biological lizard brain. Make him happy and keep him from destroying you. That is the key. At least that is what a voice told me…
Alpari is a market maker. You can trade either ECN or STP. Search the 3 on utube and you can see the difference for yourself. Hope that helps
Gp