Here we go again…
Will it ever die?
The market makers do not need you to lose [B]at all[/B] to make money. Every single trader they deal with could be making a killing and they could still make money. The whole “market makers profit from your losses” is bullshix used by STP dealers to try to scare traders who don’t know how market making works. The STP dealer charges you either a mark-up or a commission, whatever they call it, do you then say that they “profit from your losses”? The market makers simply charge you the spread, if you are a retard who is selling to the bid and buying from the ask right away to lose the spread, then yes their income is exactly your losses. But who does that? What difference would there be if some moron did the exact same thing with an STP dealer? Nothing.
If you lose 150 pips on a trade that you hold several days, the market maker does not bag those 150 pips. He takes perhaps a few pips, whatever the spread was, but he is not “on the other side of your trade”. He is not waiting for you to close the trade so he can pocket your loss. That is not how market making works. Google it or something.
Forex.com is a market maker, so are most fx dealers. So what? So you get an account with an STP dealer? And what does he do? Ha! He forwards your order to an undisclosed market maker and charges you a markup in addition to the spread you paid the market maker. How is that really any better? Want to trade fx? Then you are going to deal with a market maker whether you believe it or not. Want to trade NYSE stocks without a market maker? Sorry, the NYSE is a market maker, or said more accurately it is a firm that makes markets using many designated market makers (google NYSE DMM).
If you want to protect yourself your options include:
1.) Open accounts with multiple dealers and diversify your dealer risk.
2.) Put only a minimal deposit on account with your dealers.
3.) Keep most or as much as possible of your capital in an FDIC insured bank account at home.
4.) Trade as long term as possible so as to reduce the percentage cost impact of the spread and fees on your trade.
5.) Trade as infrequently as possible so as to reduce dealer fees.
Those are some things you CAN do. Picking the most honest dealer out there is not anywhere near as possible as those options. There could be more, anyone out there can help me out.
Feel free to trade with market makers including forex.com, the only way to avoid doing so is to not trade at all.