How do Forex Brokers earn money?

marco_mmbiz

Sergeant
Messages
184
"How do Forex Brokers earn money?"

- Spreads (which can always change depending on the market)
- Commissions (if there are very low or no spreads, like for ECN accounts)
- Swaps (which can always change depending on the market)
- Slippages (where your EA or signal provider might not work properly)
- Time-Outs (where orders won't start or stop)
- Spikes (where SL's can be caught)
- Rollovers (adding some fees to the original rollover-price)
- Deposit and Withdrawal fees (adding to the original banking fees).

That's it.
 

Granigamand

Private, 1st Class
Messages
51
When you trade and you gain profit you will always notice that it is never a 100 percent profit. That profit that you get, there is some of it that has gone to the broker. That is how they do it. Also whn you lose trades most of the money goes to them because it would not just dissapear into thin air or where do you think it goes.
 

Enayess

Recruit
Messages
110
There are many ways that forex brokers make money even though they never tell us is to sometimes make us lose trades. If you go to playstore and read the reviews about the various brokers available in there then you will realise that quite a lot of people complain that the apps are programmed to make them lose after they go live.
 

marco_mmbiz

Sergeant
Messages
184
But what about brokers who trade against you ?
Every retail-broker is "trading" against you. It's just luck to find a good retail-broker which is not "trading" against you. Try to find out the difference between investment banks (prime brokers) and retail-brokers.
 

Quinuiacl12

Recruit
Messages
69
Marco, very good answer. And also very honest considering that you have mentioned slippages and time-outs. Indeed common way of earning money from not so honest brokers.
 

benisback

Private, 1st Class
Messages
70
Every retail-broker is "trading" against you. It's just luck to find a good retail-broker which is not "trading" against you. Try to find out the difference between investment banks (prime brokers) and retail-brokers.
I thought most just put your trade to market ?
 
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