Hi all, im new and going through the babypips school. i came across the following and was wondering if part of the reason almost 85% of the retail traders lose money has anything to do with the MM’s manipulating prices to wipe out your trade (if theres a stop loss in place lets say 30 pips above your sell order)… basically they initiate a large enough trade to push the prices in the opposite direction to your trade, which is enough to wipe out your trade and then close their own position thereby making the profit for themselves.
'Trading using a Dealing Desk broker basically works this way:
Dealing Desk Forex Broker
Let’s say you place a buy order for EUR/USD for 100,000 units with your Dealing Desk broker. To fill you, your broker will first try to find a matching sell order from its other clients or pass your trades on to its liquidity provider, i.e. a sizable entity that readily buys or sells a financial asset.
By doing this, they minimize risk, as they earn from the spread without taking the opposite side of your trade. [B]However, in the event that there are no matching orders, they will have to take the opposite side of your trade.[/B] Take note that different brokers have different risk management policies, so check with your broker regarding this.’
PLease look at this with an open mind, and not just dust it off as a conspiracy theory. After all, we’re going against people with hundreds of years of professional knowledge in making/taking others money.