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Market-Making Brokers

Discussion in 'General Forex Talk' started by David Brown, Jul 29, 2009.

  1. David Brown

    David Brown Recruit

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    Hi everyone. I have been an active trader in options for several years however I am new to forex. I want to get started in the forex market but I have read several articles that say that it is impossible to make money using a broker that is a market maker. Essentially the broker is making money when you loss because they are taking the opposition position. I'm told that you have to be a huge institutional investor to directly trade on the interbank exchange which is the only way to avoid trading through a market maker broker. I'm sure this must be a newbie question for a lot of you forex veterans reading this right now, but is it realistic to make a lot of money in forex without being worried about your broker betting against you ? and is it possible to trade forex without using a market maker broker if you're not a huge institutional investor? Any direction you guys can give me is greatly appreciated. Thank you.
     
  2. Pharaoh

    Pharaoh Colonel

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    It depends on the market maker. The better ones hedge themselves against the real market, so don't get hurt so badly when you win.

    More brokers are moving to an STP or ECN model, but a lot of brokers lie about how they really process trades.

    Even if you find a great broker that always honors your trades, keep an eye on your statements. Management can change, and the temptation to steal a little here and there can push good companies into doing bad things.
     

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