Good day everyone, I am a newbie in Forex Trading and I am curious about something which I need an urgent clarification. my question is;
Can my broker manipulate the MT4 Trading platform to convert my trade to a lost?
I donât think so. However, some broker may trade against you. Like they may trade opposite direction of your trade.
Thatâs a pretty common question for new traders. Something like 285% of people fail at trading.
Tell us what happened and Iâm sure someone can shed some light on what you did wrong.
Thanks a lot @MattyMoney. I attended a training today and trainer in a bit to tell us about the advantages of their company (Forex Broker) over the other companies stated that some companies (Forex Broker) can manipulate your trade to end in a lost irrespective of what the market is saying
Your broker set the price back of house. Does he trade against you? No. They know they have the house edge anyway and that youâre more than capable of making bad decisions and losing all you money period.
This is just an excuse used by trainers, marketers mentors to cover their asses for bad strategies.
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Not sure I agree with you here. Have you heard of a dealing desk and a no dealing desk??
If you are on a dealing desk account then the broker will take your trade. So it wonât be filled at the best price and is subject to more slippage. So that can appear as though the house is maniplating your trade.
Cheers
Blackduck
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Doesnât matter unless you are with LMAX. Your broker is ALWAYS on the other side of your trade.
Again I am not sure you are correct on that either.
I am with FXCM and I run a standard account and it is a No Dealing Desk account.
Dealing Desk
Typically, retail forex traders can only access the market through a broker. However, forex brokers often offer two modalities of trading.
- The first is âdealing-deskâ trading, where brokers act as dealers and take the opposite position of a trader. Traders may pay larger spreads on average in such trades, and orders can be filled on a discretionary basis by the broker.
The other type of service is âno dealing deskâ trading. Traders are given direct access to the interdealer market, but they may be charged a fee for this service. They also could be exposed to wider variable spreads on occasion, depending on market conditions.[5]**
As you can see FXCM offer both.
Cheers
Blackduck
Who issues the contract cobber? Thats who holds the risk. And your broker should disclose this. Iâm with IC Markets and we are all familiar with them. Yet how many folks here know what a PDS is or read one. These are direct statements from IC Markets PDS.
âCFDs are sophisticated, high-risk, over-the-counter derivatives issued by
IC Markets. They are not Exchange-traded.â
âCounterparty Risk (financial resources) â You have the risk that IC
Markets will not meet its obligations to you under the CFD contracts that
you deal in. As IC Markets is the CFD product issuer, you are exposed to
the financial and business risk, including the credit risk associated with
trading with IC Markets. If IC Markets becomes insolvent, IC Markets may
be unable to meet its obligations to you (see Section 9.3).â
âCounterparty Risk (Hedging) - The term âhedgingâ refers to the
process where a financial services provider such as IC Markets reduces its
exposure by entering into a corresponding trade with another entity
referred to as a Hedge Counterparty. IC Markets may hedge CFD
transactions with its Hedge Counterparties for the purposes of disclosing
this risk you need to consider the selection procedures and counterparties
used by IC Markets (see Section 9.3).â
â9.3 YOUR COUNTERPARTY RISK ON IC MARKETS
When you deal in IC Marketsâ CFDs, we are the issuer of the CFDs and the
counterparty to each transaction, we also manage the platform you trade on.
For this reason, you have a counterparty risk on IC Markets, so you should
consider your credit risk of IC Markets having the financial resources at the time
to pay you the amounts it owes you.
IC Markets does not always hedge all CFD transactions with a Hedge
Counterparty as such we may have exposure to market risk. We have in place
internal risk management procedures to manage market risk.â
âCounterparty Risk â Hedging
The term âhedgingâ refers to the process where a financial services provider such
as IC Markets reduces their exposure by entering into a trade with another
entity referred to as a Hedge Counterparty. IC Markets manages its hedges of
its CFD with its Hedge Counterparties based on internal risk management
procedures and so, for the purposes of disclosing this risk you should be aware
of the general outline of the selection process and roles of counterparties used
by IC Markets.
Before entering into a relationship with a new Hedge Counterparty, IC Markets
undertakes a due diligence process. This process includes a review of a number
of key factors that relate to the risk of dealing with the counterparty. These
include the counterpartyâs credit worthiness, reputation, regulatory oversight,
funding arrangements, reporting processes, reliability, technology, fees and
charges.
You should note that:
IC Marketsâ Hedge Counterparties have not been involved in the
preparation of this PDS nor authorised any statement made in this PDS
relating to it.
IC Marketsâ Hedge Counterparties have no contractual or other legal
relationship with you as holder of the CFD. Our Hedge Counterparties are
not liable to you and you have no legal recourse against them (because
IC Markets acts as principal to you and not as agent) nor can you require
IC Markets to take action against our Hedge Counterparties.
IC Markets gives no assurance as to the solvency or performance of any
Hedge Counterparty. IC Markets does not make any express or implied
statement about the solvency or credit rating of any Hedge Counterparty;
however, we maintain a policy for managing the appropriateness of our
counterparties.
The regulation of a Hedge Counterparty is no assurance of the credit
quality of the Hedge Counterparty or of any regulated or voluntary scheme
for meeting the claims of creditors of the Hedge Counterparty. For
example, although a Hedge Counterparty may be licensed by the
Australian Securities and Investments Commission or other regulatory
body that gives no assurance that the Hedge Counterparty has good credit
quality, or it will perform its obligations to IC Markets.
The credit quality of a Hedge Counterparty can change quickly. IC
Markets is not able to make assessments of the credit quality of its Hedge
Counterparty which it can disclose and reports by independent credit
rating agencies may not be available because of their lack of consent.
IC Markets is not authorised to set out in this PDS any further information
published by a Hedge Counterparty and IC Markets takes no responsibility for
third-party information about the Hedge Counterparty which may be available
to you. If you require further information about the Hedge Counterparty used
by IC Markets before deciding whether to invest in CFDs, please first contact IC
Markets for that information or view our list of hedge counterparties on the
âLegal Documentsâ page of our website.â
And from FXCM AUST (the last broker I would trade with given their history)
So donât be fooled one minute by their trade talk. Your contract is issud by your broker. They and they alone are the counter-party to your contract. They are under no legal obligation to disclosure their business mode (and why would they). Your risk remain solely with them.
You are speculating directly with your broker on the underlying market. At no time does your order EVER EVER BECOMES THE MARKET.
We are merely spectators at the races placing our bets
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@therealInsideBar, You could count on one hand how many in these forums actually read their Brokers PDS in full⌠Hence the protesting when they get burned by price spikes, platform lockups, slippage and the occasional requoteâŚ
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Your disclosure with IC covers CFDâs which I donât trade. I admire your pessimism. Itâs refreshing.
I guess that as a commodities trader trading on the CBOT and the CME they also run dealing desks as well. So I guess i am screwed.
Blackduck
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@Trendswithbenefits Too too true my friend. Sadly.
Maybe my purpose here is simply to get punters to read their brokers PDS. Stay safe from the other side of the country cobber.
@Blackduck See, youâre dealing with folks here that simply donât have the funds to trade futures here.
Iâd trade commodities futures every day of the week if I had the funds. I simply donât so must choose the best alternate.
2+2 = 4
doesnât, so
@Blackduck, I read the complete document so I know who and what Iâm dealing withâŚ
US regulators slap down FXCM for trading against own clients
âUS regulators have punished retail currencies trader FXCM for using algorithms to trade against its own clients, in another stinging blow for global watchdogs against aggressive tactics in the mom-and-pop trading industry. New York-based FCXM has scrapped its US business and agreed to sell its accounts to one-time rival Gain Capital after the Commodity Futures Trading Commission banned two of the companyâs founders from the financial services industry and fined them and the company $7m for defrauding customers. âFull and truthful disclosure to customers and honest discourse with self-regulatory organizations such as the National Futures Association are vital to the integrity and oversight of our markets,â said Gretchen Lowe, chief counsel of the CFTCâs division of enforcement in a statement late on Monday. âTodayâs actions demonstrates that the CFTC is committed to protecting customers from harm in the markets it regulates.â The CFTC said that between 2009 and 2014, FXCM was false and misleading in its efforts to snag new customers by hiding the fact that it had conflicts of interests with clients. The company, and founder Drew Niv, gave false statements to the NFA about this relationship, the regulator said. Mr Niv and co-founder William Ahdout have been barred from registering with the CFTC or from engaging in regulated financial activity in future.â
This business model is still in play today⌠just better hidden⌠DYOR
Blackduck⌠Are you fully aware who youâre dealing with???
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I think he/she should read their on links
" So to sum up the whole NDD-DD story, as FXTimes analyst and trader Fan Yang puts it: âAll brokers have to hedge . . . but thatâs not defined as trading against the trader. They just have to take the opposite side of your trade sometimes. So with a dealing desk, there are people making those hedging decisions, but without a dealing desk, they have some algorithm that still does the same.â
It is important to remember that being a NDD doesnât mean that a broker isnât a market maker. A NDD broker still uses an algorithm to not only match your trades, but also make the market, just as a DD broker does."
Although the article uses the usual hype worlds âOftenâ, âSometimesâ,'Usually",âsimilarâ
~24 Months ago⌠Most in these forums believed that ECN meant direct access to the Interbank Market!!
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I think you and @therealInsideBar believe that I am a complete novice at this game.
I have been with FXCM for 5 years. In that time I have had zero and I repeat ZERO issues with FXCM
I trade Forex on a third party trading software called Track N Trade and I there is very little slippage with instant execution and respectable spread costs.
If I want to withdraw money from my account I just go to my account manager, nominate how much I want to withdraw and that amount is in my bank account within 24 hours.
I donât know what else you need from a broker.
Blackduck
She. 
Blackduck
I believe you have a much bigger account than me therefor are trading future contracts through a centralized market not CFD in a decentralized market.