How does money actually change "sides" in forex when using true STP /true ECN broker

Beginner Questions
21

it’s ok mate
it’s not the first time i’ve come across this which is why i don’t take it personally

but to me it appears that you view forex as a slot machine, if that is the case , it means you should not trade

as for this

ok, thank you and i respect that
but then let’s move to this…

but… YOU SHOULDN’T
that’s the point

i could be completely full of BS, how would you know ?

Now. if i am full of it , It will negatively impact your trading results if you believe me… ok
so… the smart decision is
Dont’ believe anyone, but Consider what everyone says
but, Test Everything that you do to make sure it works

sometimes, in this industry, the most honest person can be the biggest scammer
then
the biggest scammer can actually teach you things
but here is the really confusing one

you can get an honest person that is losing, but they will be totally convinced that they are making progress and they will tell others what to do (Even though the advice is bad) but they dont’ realize it’s bad
you gotta watch out for this one

which is why you should test everything
the bottom lines is … something either works or it doesn’t

i understand you mate
i understand it’s a tough slog… i get that

but each one of us makes a decision as to , will we put up with it or not
some people just don’t have the discipline for it, others do
others also have the committment but lack the knowledge

ON THIS FORUM YOU CAN GET THE KNOWLEDGE
it’s up to you to get the committment , we can’t give you that

22

at the end of the day mate (if you want to accept it) and … to come back to your orignal question

HOW DOES MONEY ACTUALLY CHANGE SIDES IN FOREX WHEN USING TRUE STP/ TRU ECN BROKER

Mate, Why do care /

When you go to McDonald’s , for example
you buy a Big Mac Meal

do you ask

“How does Mcdonald’s make money on this i mean and what costs are involved” NO
You just order the burger and eat it … right

well. in forex
all that matters is… Can you derive money from the market consistantly, that’s all it is
Why is the rest important ?

that’s the answer to your question
it’s a waste of time in my opinion

i would advice you put more effort into testing what you can extract from the market

23

well I am interested in how the actual process works (as I said in one of the posts like to know how things work under the hood)

I want to know the inner workings and process, that would make me a better trader…and it’s just natural to put this question, I would be ignorant NOT to ask

I am curious how the money flows (if it does) from whom to whom…I think this isn’t at all trivial but important

24

it is also my intuition that even many veteran traders don’t fully understand this topic

25

i understand all that that you’ve said
and i understand why you’ve said it

but what i am still not getting through to you is

IT DOESN’T MATTER

and yet you still ask this

and this

mate, knowing this is not going to make you a better trader

but see, then we have this

hehe
Your mind is already made up… ok

now back to this for a second

let me try and give you some sort of an answer that you can use… ok

now i said IT DOESN’T MATTER

now let’s apply this to electrcal engineering for a second

Mate, you can go and switch on a LIght switch and you have light… right ?
ME PERSONALLY
i want to know the inner workings of it (at least , there was a time when i wanted to know)
so i had to learn about Electricity, ohms Law, KCL, KVL , Faraday’s Law, Alternating Current, Load, Electrical Potential , Watt’s etc

now. these things do matter
but what if i was to ask, what is the plastic in the light switch made of
it doesn’t matter

there are things that will help you to know them fundamentally and there are things that just serve as pointless discussion

but IF YOU REALLY WANT TO KNOW
do what i did with Electrical Engineering… STUDY IT… FIND THE ANSWERS FOR YOURSELF

i mean… at the moment you are convinced that the experts don’t know
OK THEN… GO OUT AND FIND THE ANSWER THAT IS REAL
you don’t need to listen to us

i think what you are missing is
i’m not answring this question becuase clearly you won’t believe the answer anyway.

but i am still trying to help you to get to a solution… ok

also Understand WHAT INTUITION IS
just because Your Intuition tells you something, does mean that your intution is correct
the dumbest people in the world can also have Intuition, Flat earthers have an intuition that tells them there is no gravity and the world is flat
so much for intuition

Just try to understand what i’m saying ok

26

I talked to a guy on the telephone and he said well, most brokers use a hybrid model between the a book and the b book … on this site What is the A Book and B Book that forex brokers use? it basically says that the (hybrid) brokers try to gauge if you are going to be winning or losing trade and put you either in the B book , they are taking the other side of the trade…or the a book (they pass you to the liquidity provider) witch I guess would be liquidity providers .and other traders ?

I think it is actually kind of fair …so they aren’t all bucket shops that take profit whenever you are at a loss…but (some) people on the forum (mainly Mister Bob, who said in a post i read that all brokers are bucket shops)like to troll us newbs :slight_smile: and get our jingles up

so anyway is this paranoia true? are brokers out to get you …or are theses just excuses of bad traders?

it seems to me that the hybrid model is pretty fair …

anyway…it may seem that I’m going from one extreme to the other being against and then for something…but I am actually conscious that i’m just hypothesiseing based on the chunks of information I gather, building up different versions of the story

27

yes they do want to know if you are going to be winning or losing

and they take trades out of necessity sometimes,
thus it stands to reason that if they take trades that they don’t really want, then they must have some way to make money on those trades or offsett the loss in some way.

see… IF YOU ARE FORCED TO THINK, YOU COME UP WITH INTELLIGENT CONCLUSIONS
this is what i was getting at
TEST THINGS , think about things
GOOD WORK

so no they are not all bucket shops
but they are all a business and thus they are there to make money
Now… in business there are many ways to make money, one of those ways is to scam the customer, this happens a lot in this industry
take Crypto for example.

now as for this

No mate, he’s not a troll
and it’s SIR BOB to you :stuck_out_tongue:

mate, just like you misunderstood me , don’t you think it’s reasonable to assume that you may have misunderstood bob as well
i think bob was trying to send you a message in his own way
we are all different personalities here, you also need to understand that
Just like i don’t take it personally when you throw out comments like you did, after i tried to help, but instead I SHOWED UNDERSTAND TOWARDS YOU
YOU TOO HAVE TO SHOW UNDERSTANDING TOWARDS BOB

yes the reality is… they are out to get your money,
they don’t actually care about you as such
but then… Any business is out to get you, it’s just that this one is more aggressive at it

but, what you need to do is Make it Profitable for them to not get you

what you’re doing now is PROCESSING INFORMATION, that’s pretty normal
the problem is when you enter this industry, you are just bombarded with crap and you don’t know what or who to believe any more

which again goes to my original point
Test what everyone says
Test every system and theory

Make your own conclusions as to what works for you
and if you do, YOU SYSTEM WILL BE ONE THAT WORKS, AND YOU WILL KNOW WHY IT WORKS

but if you rush it or you buy a bot or use someone else’s system , when you lose, you won’t know why
thats’ how it works

it’s like starting a business, you build it up, you try things, some things fail others work and you get to a point when you are profitable and have a stable business model
or
you can buy a business, but , you would expect that the past owner would explain the model to you,
if they don’t, you’ll probably go broke

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28

Yep, but then you have to keep working at it, it’s ever changing Is a never ending changing model, stand still and you get left behind - just like the market I suppose.

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29

yep this research is kind of like building a puzzel. i kind of tend to see information and immediatly connect it with what (else) i already know, and ask questions, draw conclusions.

this is both a blessing and a curse, because it sometimes helps form a more encompassing point of view, sometimes it just takes me on a convoluted tangent. connecting the dots is good but sometimes there are just too few, or too many dots (pieces of information) at your disposal, you also don;t really know if you should draw a conclusion or gather more info…so you alternate between gatehring info (reading) ,piecing the information toghether , and asking questions…

the road is very personal. you also come up with different versions about the matter at different times ,and upgrade your understanding as the time passes. you can not get everything right the first time, there is no perfect road, it;s personal )i think that;s what you are trying to say)- at least in my understanding(the last part with it’s a persona roadl)

thank you for the reply!

the sum is made of parts and the hole is also more than the sum of it’s parts

30

SO how is your demo trading going up to now ?

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31

see, now you;re getting it
that’s right , that’s why i keep saying TEST THINGS

32

haven’t opened a demo account in two years (from the time I started to be interested in forex, I was even newer to it than, than I am now…after that i I took a hiatus), i’m just reading the school of pipsology…is that bad? I figured I should read it all once and understand it theoretically fairly-good before I start to demo trade(practice).
I 'm not afraid of doing it or something, but the first time I did it (and the last) I had a even more rudimentary understanding of how to trade than now, and I was kind of blowing it up, so I thought I would wait a bit and knowledge up.
Anyway , when learning an instrument for example one generally learns a bit of theory and a bit of practice, do you think this parallel approach is better ?

33

Ok That’s basically what I thought.

I say it often - Anyone (who knows anything at all) can take losing trades with almost 100% accuracy. Yet it is very hard to make profitable trades.- Why should this be ?

All you have to do in theory is to trade exactly the opposite to what you do now - But that is impossible because your head won’t let you …Right ?

That is perfectly normal and that is what we are trying to overcome. You can find a beginning of explanation for the problem here ;

https://www.amazon.co.uk/How-Know-What-isnt-Fallibility/dp/B0155M0UX4/ref=sr_1_2?ie=UTF8&qid=1519559922&sr=8-2&keywords=how+know+isnt+so

Now what you seem to be saying to yourself is “If I learn everything, I will know enough to be successful” - Yes ?

That is a form of “Procrastination” and your own subconscious will keep telling you “Learn more”, “Learn more - then we can trade profitably”

That doesn’t work in this arena - and what you are trying to achieve here is a depth of knowledge which is not relevant. This thread and your previous one, which I was quite involved in, both revolve around the same issue “Who am I trading with ?”

The answer in words of one syllable is "Who gives a flying feckk? "

Calm down a little and get you another demo account. Learn to make profit and make losses doesn’t matter because this is a DEMO account. It is a learning tool - NOT a test of your ego - Not a place where you need to “Give yourself approval” - It’s just a Game !

Learn by all means we all need to do that, but trading in DEmo is a really good way of trying to do new stuff - TRY to Bet a “Buy” when your head is screaming “Sell” - TRY to “Sell” when your head is screaming “BUY”

Practice, practice, practice -

This is not a perfect post - I am going out in a moment, But I sincerely hope it helps you to see the problem and think about what I have said here.

[EDIT - The “School of pips” is fine basic knowledge, pick a way of trading based on what you learn there and research that at the same time as practicing Demo - in fact practice demo Now ! ]

All the Best

F

34

thank you, if you read the final post my other thread (the end) you can get an idea (if you wish) for why I am so h*ll bent on finding out the answer to the question…because it kind of counts in certain ways…also the fact that the answer is dodgy is a bit fishy and I ain’t that keen on running through a forrest blindfolded

35

OK so you bet 10 $ - you win $5 - You bet $10 you lose $3 !

Why does it matter whether it’s a machine or little old Lady in Tasmania - who you are betting with ?

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36

I just thought - If you’re thinking it matters because you want to know why “Smart money” wants to take the other side of your bet ?

It is because Smart money KNOWS that 90 percent of retail traders lose 90% of their accounts in 90 days.

You are betting against that statistic is all.

ie At the end of the day - you are betting against your own head !

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37

ok if you are the the winning side of a trade… than someone else has to be paired up with you in order to pay you

it is highly unlikely that you can be paired with other traders because they should have an equivalent position to your own witch is highly unlikely ( if you want you can read the calculations I posted in the other thread that explain this, this can happen only if somebody is trading very precise amount of custom lots that match your trade)

and it is also unlikely that you are going to be paired up with a hedge fund (if your are a winner) and they accepting the other side of your trade because they are also smart money (winners) and because they actually can see as to my understanding a pending request from your side of the trade… if they want to close part of their position , so why would they if it’s a win for you and a lose for them?

so you can’t be paired with other traders because they don’t have the exact amount you are looking for…wo pays the difference?

and you can t be paired with the “liquidity providers” because they can see your trade pending against their larger position and won’t basically do it I

if I think about it more (the liquidity provider) may accept your trade because a win for you is not necesarrily a lose for them, you can both win…but how likely is this?

in theory all participans can win and also all participants could lose on a sequence of trades by buying and selling at different times to different entities at different prices. in theory everybody could win, everybody could lose, and everything in between

so the concept that A wins B’s money and B is losing money to A is a bit misleading in the sense that the 10% doesn’t get the other 90% money…somebody doesn’t have to lose , we can all in theory be winners (and also we could all potentially be losers) because of volatility and selling/buying at different time. for example if I buy and the price goes up I make a profit …if the entity i bought from sold what he got from me but not immediately, waited for the price to reverse he could also make a profit…and so on (but this does not happen infinitely, only if price moves in one direction) …in anyway the liquidity provider you are paired up with wouldn’t buy unless he was going to make a profit ,why would he buy from you in the case you are selling (closing) a trade that is about to go sour (at least for the time being)…so the question why would the liquidity provider buy a a trade from you (the winner) on a trend that is about to go sour is pretty legit still…i tought he was the smart money!

the concept that someone else automatically has to win and somebody else has to automatically lose is kind of wrong, but not totally wrong…the economy (fundamental analysis) could THEORETICALLY expand to infinity, shrink to infinity, tehncal anaylsys could theoretically just be stuck in an uptrend , and news could every 5 minutes be positive … it’s evidently this does not happen but by the nature of these parameters you can deduce it’s a bit more complicated than somebody winning and somebody automatically losing the same amount

in anyway the liquidity provider you are paired up with wouldn’t buy unless he was going to make a profit ,why would he buy from you in the case you are selling (closing) a trade that is about to go sour (at least for the time being shown in technical analysis)…because of fundamental analysis that shows long term profit? but why would they buy on a down trend …they still do utilize some technical analysis to maximize profits right? and what fundamental analysis shows doesn’t run anywhere!!

38

OK mate, Have it your way.

I’veexplained and tried to humour you, @anon81929759 has tried,others have tried yet you persist in this assinine banality.

If you’re trolling, you’re quite good - but what is the point ? If not, Then I think we have to let you work through it yourself.

Sorry , Life is too short and my life is more interesting than to be wasted on trying to educate someone who just plain doesn’t want to understand - Farewell.

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39

@Falstaff
and i sincerely applaud your patience with him.
i was seriously asking myself, how much longer were you going to do this

this is why i’ve decided there are some questions i won’t answer
it’s not personal towards the asker
it’s just a choice on my part where i believe it becomes a waste of my time

you can’t say we didn’t try.

40

i was asking why would someone, especially a big bank offer to take up the other side of a trade (that is to their disadvantage) …I understand your statistic point of view, but they actually can see the trade will go their way or yours. so are they so blind as to take any trade from traders because 90% of traders lose money…or are they actually going to utilize their smarts and see the way the trade is going just in case they encounter one of the 10%

it’s ok, you don’t have to respond to my posts if you don’t want to