You have posted a very serious and important comment and it is a pity that it is here and not on its own thread since the issues you raise are quite common and very relevent to all retail traders. You say you have been trading for 30 years and so I take your views very seriously and with great credibility.
Whilst it is most likely true that there are major forces in the world markets that can influence direction and gain from it, I do not believe that these forces are targetted at wiping out mini-sized retail accounts - these just get caught up in the bow waves. However, there are clearly other players in the field that can and perhaps do take advantage of small retail accounts.
But there are perhaps two normal major characteristics of the forex market that cause the kind of problems and phenomenae that you mention in your post:
Firstly, whereas stocks and commodities are basically only single products, currency exchange involves the relationship between two separate products which are both reacting independently to market input. Therefore a reaction by one currency to a certain input maybe override the reaction by the other currency to the same or coincident inputs. This can result in the actual currency exchange rate moving totally contrarily to what one might anticipate.
Secondly, the forex market is huge and it is relatively unregulated regarding who can operate in it and how far it can move. It is therefore extremely reactive to sudden bursts of short-term activity as often witnessed following major releases such as the US NFP. But this freedom of movement is aggravated by the modern trend towards automated robot trading that simply clicks in whenever the market movement triggers a signal. This means moves can become self-fulfilling in short term bursts. Whenever the market moves it initiates and sucks in huge participation from both automated systems and technical followers without much actual consideration of the fundamental logic behind it. It is driven by pure profit-seeking, but often fails quickly as serious players take the opportunity for benefit from good levels.
Another factor that affects many forex traders is that technical analysis has become so widespread, simple and mechanical that it produces very precise, widely recognised, points such as support/resistance levels, fibs, recent high/lows, etc where vast numbers of stop levels/ entry triggers will be concentrated. This is easily targetted by broker market-makers whenever the current price approaches these levels. This is a quote from a large broker that is commonly used by new traders:
“Our spreads are dynamic, and are set automatically by our algorithms based on current market conditions: during more volatile or less liquid conditions, spreads tend to be wider than during normal trading.”
Spreads do clearly widen under specific market conditions (except maybe ECN types) and the trader cannot know what kinds of conditions these algorithms are set to recognise. I do not know if it happens, but it is easy to cynically imagine that “dynamic” spread widening could be something like: “whenever the market is within 5 pips on a recent high/low widen spread by 8 pips and trawl in the stops”.
But, apart from perhaps some unruly dealings by some unprofessional broker practices, I do not believe that anyone is out to deliberately smash the retail trader. There is no long term benefit from that nor are the sums involved so great. I believe the reason why so many retail accounts fail is simply because they are either incompetent or experienced as traders. If you have never driven a car, you do not read a book and then enter an international rally competition - a crash would be inevitable - and some newbies do not even want to “read the book” first before putting their small monies into the market.
The only qualification a broker requires is basically your identity and your assets. There are no competency qualifications required whatsoever before plunging into this huge volatile market. Broker marketing tactics and the general reputation of forex trading create the millionaire dream and the hope of financial freedom that draws in huge numbers of expectant and optimistic new players who have no conception at all of the risks involved or even how to (or more significantly, when not to) trade. They may make a few gains that boost their confidence but that only serves to increase the blow of depression when it eventually goes wrong. Winning is not the aim of the game - it is [I]consistent overall[/I] winning that is required to remain in the profession. The big players and brokers do not need to rip off the small retail traders because they are perfectly capable of failing all by themselves because of basic ineptitude, inexperience, consistency and lack of funds to sustain flexibility and buoyancy through the inevitable occasional rough seas and own mistakes that we all make from time to time.
It may be that the forex market is not for you, but I think it is due more to its peculiar and unique characteristics rather than underlying coordinated conspiracies to rip off small retail traders.