Thanks for your comments here. I think that maybe you have missed the point that was at issue here - i.e. the claim that a broker will match your trades with another trader’s position as your counterparty.
I do not believe this is done, or even possible - what do you believe about this?
But if my trade of, lets say, long 5 lots was matched against your position of short 5 lots, how could I or you affect one another’s positions? And what would happen to your position if I closed all or part of my position? And from the broker’s perspective he has nothing to gain or lose whichever way it goes as either I or you would gain and the other lose. This simply does not happen. in this way.
This is not the same thing as a broker matching opposing positions back to back to calculate his own outstanding overall net exposure as the counterparty to all his trades as MM. This will change constantly as client multitudes continually enter and exit their trades.
In addition, it is a fallacy to always accuse the broker of ripping off their clients. Yes, there are dubious brokers and there are suspicious examples. but on the whole the broker is far more interested in building up an active clientele of regular traders that deals in large size and on a frequent basis - and they do have such clients! They even offer discounted commissions on trading size.
It is true that the multitudes of Newbie accounts that come and go do add an appreciable income to brokers in gross terms as they blow their accounts (which they do without any concerted interference from the broker), but in net terms, these small Newbie accounts can often cause more overall costs to the broker than they actually make from the trading losses/spreads/commissions and are more bother than they are really worth - especially as they would have to constantly be marketing and advertising for fresh “meat”.
Interesting input @m.k.a, thank you.