FOREX truth

[FXMART]

First of all, a few notes:
1) This is NOT a recommendation to do anything
2) This is NOT an advertisement, I am NOT an IB, I am a TRADER
3) I learned a lot from FOREX forums so I feel a responsibility to give something back
4) This is just a warning based on my very own experience that I will send across forums - take it or leave it

My main message to YOU is that the vast majority of brokers are robbing traders every single business day! And YOU are probably also one of the robbed!

A) Practically any broker that offers you deposit bonuses, big competitions etc. will NOT ever let you make any money due to direct conflict of interests as that type of broker is usually a market maker. Such a broker opens trades against you. Really I know what I am talking about, one of the market makers already canceled my profitable account and told me that I am too much profitable!
Those are robbers number 1.

B) Almost any other broker is NOT transparent (expect a couple of them). Their costs on majors are somewhere around 0.05 - 0.3 pips depending on broker possibilities and they charge you at least 1 pips, maybe 1.5 pips, maybe 2 pips or even more!
Don't forget execution costs (slippage) which is at least 0.5 pips to even tens of pips! Depending on qualities of the broker, his liquidity providers, market situation, trade volume etc.
Those are robbers number 2.

Just count for yourself. If your trading costs on EURUSD are 2.5 pips (1.5 pips spread and at least 1 pips slippage) and you would trade 5 lots per trade, 20 trades per day *- your expenses after one year of trading = 660 000 USD

Frankly, I was introduced to a very reliable broker with banking license by an IB partner of the broker. I feel responsibility to mention him as he extremely helped me on my way through FOREX world. He provided me very individual institutional type of account where I trade with true interbank market spreads and the broker charges a commission - that's what I call transparent trading! Also the execution is great as the broker has a lot of liquidity providers - major banks. My trading costs on EURUSD are with average slippage counted 0,45 pips. So 5 lots per trade, 20 trades per day - expenses after one year of trading = 118 800 USD

That's over 540 000 USD of difference! Huge mathematical disadvantage in the case of broker with 2.5 pips costs!
I will not write more concretely about anyone due to advertisement conflicts.

It's just beginning from my side.

 

[cyberpinoy]

Firstly let me say I am not saying you are wrong, but there is some information I would like you to clear up for me so we all can better understand your input. You said you have been involved in forex forums across the internet and dont want to advertise for IB. That part I clearly understood. but a couple of things that both I did not understand and I did not like about your post are as follows. Please help me to make more informed decisions.

Things I did not understand

A). You say certain brokers will not let you make money on a hedged account Right? Now, would this not be counterproductive to a broker? From what I understand on a 1:200 hedged account, you put in 1 dollar your broker then puts in 200, is that correct? If this is correct would it not be absolutely counterproductive for them to not want you to make money? I mean if its it hedged 1 to 200 and you make 1 dollar they make 200 right? So please explain to me why a broker would NOT want you to make money. It just does not make sense to me.

What I did not like about this post.

You said and I quote "Really I know what I am talking about, one of the market makers already canceled my profitable account and told me that I am too much profitable!" it is awesome you want to prove this to us and "really" push this point, yet why not mention said broker. Dont just say "Market Maker", name them so we know and have the opportunity to investigate. Along wiht this again I ask why would your broker not want you to be profitable. the more money you have in your account the larger volumes you trade, the more trades you make the more your broker makes thru the spreads they charge right, so again I ask why would these broker not want you to be profitable and go as far to even close your account for being to profitable?

Things I agree with in this post

B) I do agree with these spread problems, I watched a 40 dollar profit go to a 30 dollar loss due to a spread change. this spread change was so fast to, and I am sure the broker made a lot of money on this small spread change that happened so quickly. it went from a few pip spread to a 12 to 14 pip spread back to a few pip spread in less than a second. but I was getting ready to close that trade for the profit when I caught the spread change and stopped closing it. after the spread changed the market dropped and my trade was then sitting in the negative. I waited only a few minutes and still made a 40 dollar profit on the trade, but that could have been very costly if I was not watching so closely. I also notice weird spreads throughout the market, one minute a currency pair will be a few pip spread then as the market begins to move the spread goes up to 5 or more pips until that market slows back down again. Very weird. I am not afraid to say who my broker is, I trade the MT4 platform thru Forex.com UK.

Let me just add I am not a pro trader, but things I have realized when trading the past year,
I watch the spreads very closely. I utilize these drastic spread changes in my trading strategy. When I make a trade I alays try to leave room for a spread change so i can still make a profit. It does not always work and limits my potential of trading, but it does help to keep my as profitable as i can be.

I always keep in mind, no matter if this ie true or not, I say better safe than sorry, But I think your broker is not the only bad guy out there, we have HUGE banks pushing and pulling this market daily, possibly even the central banks themselves tying to control a certain pair on any given day. Example I watched yesterday where 2 reports came out for japan with medium impact on a market. one of the reports was the highest it has been for the past 5 years. The japan yen market just stopped moving completely. literally stopped moving for 5 minutes, then had very very low impact on the market. To me (keep in mind I am new) The yen had 2 reports both positive and one was a great report having the most positive effect higher than the past 5 years, that market should have moved in favor of the yen right. I was trading against the USD, that had little movement and no reports coming in at that time, and actually was losing strength against other pairs as well as gold getting stronger all at the same time. So what was causing that pair to literally stop movement. Now to better understand my side, I do not just have my platform opened, I have my platform opened, an economic calendar opened with a streaming set of currency pairs up, as well as dailyFX alerts with another chart of the same currencies I watched all 3 of these charts and it stopped moving on all 3 charts.

In summary I am not saying you are wrong, but I need more proof on a few points. In my opinion telling us who this broker was that closed your account is in no way "advertising" however naming the broker who did help you does. Because of the way you have worded your post, it seems a lot like an advertisement to me. I am sorry this is just my opinion, if you didnt want to advertise your new broker, maybe dont name them much like you did not name the broker who did you wrong. Just my 2 cents.

 

[FXMART]

Hey cyberpinoy!

I like your open minded approach. Let me explain the things that you could fully understand my purpose.

A) That is not correct. You are probably referring to leverage 1:200. It works like that: if you put 1 buck than you are allowed to trade as if you had 200 bucks. Nothing more, nothing less. Leverage just allows small retail traders with a couple of bucks to participate in the game.

You understood that market makers hedge trades. You open BUY, they open SELL. You open SELL, they open BUY. Simply one trade must be profitable and the other one must result in a loss. As price moves there are only two ways:
A) You made for example 1000 USD and market maker lost 1000 USD
B) Market maker made 1000 USD and you lost 1000 USD

That is very simplified, just to explain how it works. You are talking about spreads. Market makers use spreads and widening them, commissions, spikey, bad execution, trading platform freezing, server crashing and so on just to create mathematical advantage to them and huge mathematical disadvantage to YOU!The game with market makers is about the profit or loss from whole trades.By the way you recognized one of these techniques in point B) as Forex.com is a market maker robbing people all around the world. My friend lost with them 10 000 USD and almost every second day called him someone from Forex.com pushing him to deposit more money and trying to advise him how the market will go (IN FACT HOW TO LOOSE OF COURSE).

The broker which cancelled my account is FXDD. If I am being specific, lets name other market makers robbing traders money every single day: INSTAFOREX, IRON FX, FOREX.COM, PLUS 500. Very bad brokers are also ALPARI, FXPRO… Full list of them would probably never end. These guys are having really good days making huge profits thanks to their sponsors - traders..
For example: IRON FX told me that they are 6th (I am not sure, if they told me fourth, fifth or sixth, but it doesn't matter) biggest broker in the world considering their trading volume. However they are far from that big at true interbank market. I checked their true volume at interbank market and they don't do the volume there. So where else they could? Think about it…..

Of course as you mentioned the market isn't predictable however that's another topic. First assumption for fair trading is a broker.

As I wrote earlier, this is NOT an advertisement. I won't post any information about the broker that I trade with. Even if I would, the type of account isn't publicly available so it won't help you in anything. The only way to access this account is through the IB. However I won't mention anything about him, I just felt a responsibility to not forget about him. The IB usually cooperates with big portfolio managers and financial companies. He has a lot of interested traders, so he doesn't need any type of advertisement. He doesn't provide the institutional account to anyone.

FIRST POST: 4) This is just a warning based on my very own experience that I will send across forums - TAKE IT or LEAVE IT

BTW: I'll create a list of forums (and publish it publicly) where admins refused my post based on their connection with some broker and aren't interested in providing the TRUTH to their users

 

[GOR FX]

Too much ado about nothing. There isn't any reputable and transparent broker that will offer anything less than one pip for a NDD account.
One more thing: you wanna spend your energy fighting for one pip instead of making 50?? Really?

 

[bigdolly]

That's over 540 000 USD of difference! Huge mathematical disadvantage in the case of broker with 2.5 pips costs!
I will not write more concretely about anyone due to advertisement conflicts.

Huh, thanks god you didn't count those trade-in money you would lost, 540 K dollars of which is just spread.

Of course if you make 100%/ month consistently, the only way for it is seeking price inefficiencies ("bugs" in forex). It's ridiculous to heard that broker accused you making too much money in trading. Really can't take it in.

 

[fxstrategist]

Market makers take the othe side of the trade and if you win they lose, period. Look for a non dealing desk broker or ECN and that's it.