New to this forum, new to forex, new to trading (when you look up “newbie” in the dictionary…that’s right, that’s my picture there next to it). That being said, I need to ask something really basic:
I’ve heard many horror stories of how the forex is the Wild West of trading. It’s unregulated; unless you’re trading through a bona fide ECN (and good luck trying to find an ECN that’s a true ECN rather than a bucket shop posing as an ECN), the broker knows your position 100% of the time and is gunning for you; the broker can requote at his leisure; he can change the terms of your account at any time; and, if all that fails, you get put on “manual”. And, of course, all those stories of brokers just suddenly closing up shop and absconding with the money in your account.
Now, I know I’m taking a particularly jaundiced view of this market, and playing devil’s advocate a little bit (not to mention my boundless ignorance). But honestly, when looked at this way, isn’t it like playing one-on-one with Michael Jordan, with one hand tied behind your back?
Not at all.
- Don’t use a broker that doesn’t have a proven track record.
- Use proper money management.
- Brokers gunning for your stops on a micro, mini, or even a standard account is a more fallacy, or sour grapes, than it is fact.
Brokers don’t necessarily want you to go broke. They would rather you break even, or make money, and keep paying the spread over a long period of time.
The guys and gals complaining about the broker tagging their stops, are just putting their stops in the wrong places. And more likely, they are actually placing their stops where their entries should be…
This game is all about playing where the crowd ain’t.
Thanks for your response, Master Tang - much obliged. I guess it’s normal to have some trepidation when what I’m looking at is a veritable terra incognita (at least from my perspective). I suppose that will attenuate somewhat as I become more intimate with this market.
I concur with MT… its the market makers who will SL hunt. Setting your SL one pip above a high or below a low on a given TF is the percieved wisdom. Frankly its asking to be taken out! LOL!!! Go for a ECN/ STP broker that has the required credentials i.e. conforms with the relevant regulatory body in US or UK.
Thanks RC. Your comment, along with MT’s advice, makes me feel better about embarking on this new endeavor. There is just so much negative stuff out there about the state of modern retail trading. To hear it, you’d think that we’re all just fodder for the liquidity gristmill.
Some apprehension is natural, but this forum has been around a good few years, now (look at the join dates of some of the experienced members). If none of us ever made any money, I expect that it would have packed up and gone home ages ago. It works, there are just a good few bitter people out there. Tune out anyone who cannot evidence what they say, particularly if their view differs from your own experience. The internet gives voice to an awful lot of people, but many of them are just wrong.
Thanks, Simon. I appreciate the moral support. I feel very fortunate to have found this site. I know that I’ll learn a great deal here (and, Lord knows, I have a lot to learn).