Many forex brokers are labeled as bucket shops. I would like to know what determines if a broker is a bucket shop .Is it constant requotes or is it delays in filling orders? I would like some information about this subject so I know what to watch out for before I deposit my hard earned money with one of these companies. I do not believe that demo trading mirrors real time…some help…please.
Bucket shop - Forex broker that sells buckets. 
Beware of them.
Regards, Tymen Wortel, Perth, Western Australia.
I believe that is a very important question for the many of us who are new to forex trading. It is a term that is used alot to describe certain companies and the way that they do business. Can someone please elaborate?
Everybody who is participating in financial markets should read urgently the classic ‘Reminiscences of a Stock Operator’, written by the legendary speculator Jesse Livermore who operated around 1900 - 1940. This book give very valuable information about timeless practices on the stock markets. The first chapters describe Jesses first experiences as a teenage boy in his home town with the local Bucket Shops.
A ‘Bucket Shop’ was a brokerage shop in the times when there was no internet. These shops were located in towns outside the big cities, and received actual stock quotes from Wall Street by telegraph. Small speculators went there and bought and sold stocks for prices the shop owner itself made up.
This of course was an invitation to fraud by price manipulation done by the shop operator.
Jesse Livermore was one of the few guys with such a big talent for speculation that he managed to make his first real money by speculation over an bucket shop. As an result, at a certain time he was so well-known that no bucket shop operator allowed him to do speculation there anymore.
Many forex brokers are called the ‘Bucket Shops’ of the 21st century because of the same principle: They are an interface between the real market and the speculator. The forex broker itself makes up the prices, and there of course is a lot of potential for unfair price manipulation (like stop loss fishing or similiar). Some people also suspect that some dubious forex brokers simply exclude good traders, by suddenly not executing orders anymore, executing orders for a bad price…
Forex is dangerous because you get your prices not from a regulated official market, but from a party which could have interest in just ripping you off. A good forex broker should take care of you and teach you to trade well, by offering educational trading material on his website for example. A bad forex broker just advertises with ‘Huge returns guaranteed!!! Make more then 800% per year!!!’
As Jesse Livermore wrote in another book, speculation is as old as humanity. And the basic principles of the markets have always been the same and will always be the same.
FXCM = Bucketshop…stay away from them, theyr a BIG SCAM.
If you’re going to toss out accusations like that, you need to provide evidence. Otherwise it’s hard for me not to think that you’re just another disgruntled trader who wants to blame someone else (brokers are convenient) for your own trading mistakes. If you feel you have a legitimate gripe, then let us know so we can make an informed decision.
Hi forexmentor
please can you tell me why fxcm are a big scam?
I currently have a demo account with them and they seem to be ok,I would like to know of your experiences with them.
buyer Beware!!! Buyer Seriously, Seriously, Seriously, Very And Extremely Seriously Beware!!! If You Open An Account With Forex.com ,they Will Manipulate Your Market And Steal Your Money!!! Alllllllllllll Your Money!!! They Will Even Give You V.i.p Treatment In Theft!!! They Will Personalize The Market Manipulation To Your Own Trading Desk To Make It Look Like A Fault With Your Computers’ Cpu Or Memory!!! A Word Is Enough For The Wise!!! Fxcm Is Saintly And Honest In Comparision
A bucket shop is a online casino which replaces blackjack, roulette and the likes for a nasty line which goes up and down everyday.
EXCELLENT HISTORY ON JESSE AND THE BUCKET SHOPS – a good movie to see is “THE STING” which was a bookie joint bucket shop con game set up to win from ONE deep pockets customer, but thats what bucket shops were like back in livermores day.
i disagree a bit with your 21st century version, but only in part, simply because of the internet and direct feeds from the interbanks ---- it doesnt take much to seperate the crooks (more to fear with their going bankrupt than the stealing) from the more honest brokers, although crown and interbank are two “buckets” that dont give REAL prices, cutting back by a few pips constantly from the interbanks prices.
while “brokers” (referred to as “bucket shops”) can be nasty during late nite hours and times of NO liquidity (like after 5pm, est), theyre actually pretty good in the main — just a few, and they are usually well noted, that one shouldnt trust too easily !
some of the real truths behind the modern day buckets, is that they actually arent trading against you, but simply a middleman between the banks and the retail trade — they pull in orders from us, and throw them to the banks as a large block, to execute — the brokers really do make their money from the spread, but the interbank traders are the ones you have to watch, because THEY are the ones actually trading against you !
enjoy and trade well
mp
WOW! FXCM a scam. I trade full time on a live account with them. They pay me a very honest living.