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How brokers really does money? And how retail traders can benefit too?
Oct 27, 2013 at 18:20
674 Angesehen
6 Replies
forex_trader_75987
Mitglied seit May 02, 2012
113 Posts
Oct 27, 2013 at 18:20
Hi all,
Someone here know how a respectful broker , ECN or Market Maker , does a serious and transparent money?
I am doing this question because in fact nobody wants conflict of interests making hard relationships between the trader and the company.
Someone says that broker only profit when newbie traders loses. Another persons says that broker profit with spread division.
But how the serious profit happen? For both?
Specially talking, Market Makers call me too much attention.
I will give an example: a company like City Credit Capital UK is a respectful market maker. Spread in EURUSD is 3 points such that 1 spread is shared with trader (when he/she gets a profit) , 1 spread is directed for the broker , 1 spread is directed by HSBC bank which both companies are in partnership.
So,in this case, no matter how many money you do, rarely there would exist conflicts ? Spreads are fixed and shared for all parts.
If you start with 10,000usd and uses a wonderful advanced system taking for example 50,000usd.
The company also takes 50k in profit?
Some experienced trader can talk with us ?
Att,
Someone here know how a respectful broker , ECN or Market Maker , does a serious and transparent money?
I am doing this question because in fact nobody wants conflict of interests making hard relationships between the trader and the company.
Someone says that broker only profit when newbie traders loses. Another persons says that broker profit with spread division.
But how the serious profit happen? For both?
Specially talking, Market Makers call me too much attention.
I will give an example: a company like City Credit Capital UK is a respectful market maker. Spread in EURUSD is 3 points such that 1 spread is shared with trader (when he/she gets a profit) , 1 spread is directed for the broker , 1 spread is directed by HSBC bank which both companies are in partnership.
So,in this case, no matter how many money you do, rarely there would exist conflicts ? Spreads are fixed and shared for all parts.
If you start with 10,000usd and uses a wonderful advanced system taking for example 50,000usd.
The company also takes 50k in profit?
Some experienced trader can talk with us ?
Att,
forex_trader_75987
Mitglied seit May 02, 2012
113 Posts
Oct 27, 2013 at 18:23
its a good question because if you know how a broker does profit and you can collaborate with them. Would be possible to build a solid relationship taking a win-win solution. Never a win-lose solution..
Mitglied seit Oct 09, 2013
16 Posts
Nov 10, 2013 at 21:38
Igor123472 posted:
its a good question because if you know how a broker does profit and you can collaborate with them. Would be possible to build a solid relationship taking a win-win solution. Never a win-lose solution..
The money has to come from somewhere..
Preserve your capital!
forex_trader_75987
Mitglied seit May 02, 2012
113 Posts
Nov 11, 2013 at 20:50
true..
Nov 11, 2013 at 20:58
Igor123472 posted:
its a good question because if you know how a broker does profit and you can collaborate with them. Would be possible to build a solid relationship taking a win-win solution. Never a win-lose solution..
I think that this situation is possible with brokers like STP or ECN where your volumes are in their interest. Therefor if you find a winning system or a bit aggressive, as long as their liquidity provider ("LP") doesn't mind, they won't mind, hence you are good to go!
I feel like its awful but its a little bit the cat and mouse game. If the LP is tired of all the people scalping with SL as close as 3pips they'll simply change the rules and make a lot of system obsolete.
Never forget that as long as we don't have enough liquidity to be considered an institutional investir, you will always have the "retail" stamp and be most of the time "used" or taken advantage.
A smooth sea never made a skillful sailor.
forex_trader_75987
Mitglied seit May 02, 2012
113 Posts
Nov 11, 2013 at 22:24
Thalantas posted:Igor123472 posted:
its a good question because if you know how a broker does profit and you can collaborate with them. Would be possible to build a solid relationship taking a win-win solution. Never a win-lose solution..
I think that this situation is possible with brokers like STP or ECN where your volumes are in their interest. Therefor if you find a winning system or a bit aggressive, as long as their liquidity provider ("LP") doesn't mind, they won't mind, hence you are good to go!
I feel like its awful but its a little bit the cat and mouse game. If the LP is tired of all the people scalping with SL as close as 3pips they'll simply change the rules and make a lot of system obsolete.
Never forget that as long as we don't have enough liquidity to be considered an institutional investir, you will always have the "retail" stamp and be most of the time "used" or taken advantage.
I don't know if ECN is just a marketing tool guy.
Broker isn't charity.
@Thalantas,Do you think that is possible to trust on CySEC? Cyprus has a lot of fx brokers online offering services and they do a big marketing for attracted clients,mostly ECN brokers.
Cyprus is a double-edged sword.
Nov 11, 2013 at 22:29
I unfortunately never worked in the industry and I don't know much about every regulation agency. I believe I once read that CySEC inflict ridiculous fine whenever a broker is caught cheating. Hence, if its true, they probably do their dirty little thing on and on.
I don't know if the bankruptcy of the country helped but I feel like most brokers slides to NZ and Russia. If I were you and I wasn't hunting for millions of brokers to try different EA or do something really specific I would look at brokers in the UK.
I was always told that the top broker for "serious" retail traders is the swiss broker Dukascopy. I think the only drawback is that they don't have MT4, at least they didn't they last time I checked. You can always look for a bridge between MT4 and their platform.
I don't know if the bankruptcy of the country helped but I feel like most brokers slides to NZ and Russia. If I were you and I wasn't hunting for millions of brokers to try different EA or do something really specific I would look at brokers in the UK.
I was always told that the top broker for "serious" retail traders is the swiss broker Dukascopy. I think the only drawback is that they don't have MT4, at least they didn't they last time I checked. You can always look for a bridge between MT4 and their platform.
A smooth sea never made a skillful sailor.
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