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Discuss Why Broker Manipulate Trades?

General discussions of a financial company

sigitpambudi144

Private, 1st Class
Messages
45
i already posted about mydilemma about choosing broker, but there are ussues that bother me
1. If general forex brokers or even regulated brokers could take profit from spread, commission, swap and etc, why brokers need to manipulate chart for their trader like changing candle, requote, freeze accounts, and etc ? Cause the manipulation could make their image looks bad and down the rating
2. Why broker not just throw all positions to LPs why they have to manipulate charts and make their client lose ? If their just throw all positions to LPs i think it doesnt make the brokers bankrupt
3. Why even regulated brokers could scam or could potentially become bucketshop ? Cause they have sustain business and trusted by alot of client
Thank you
 
1. If general forex brokers or even regulated brokers could take profit from spread, commission, swap and etc, why brokers need to manipulate chart for their trader like changing candle, requote, freeze accounts, and etc ? Cause the manipulation could make their image looks bad and down the rating

In some cases, real market slippage can happen and real price feed and/or LP issues happen. But, for sleazy brokers, it's not hard to add in a small bit of slippage against the trader on both entry and exit. Alternatively, giving the trader the worst price during a 100-2000 millisecond window as the trading is "executing" is also something that can be arranged. Done subtly, this sort of thing is easy to suspect, but very hard to prove. Imagine a small broker that processes an average of 500 round lots per day (500 lots opened, 500 lots closed). Grabbing an extra 1/10 pip on entry and exit would allow the broker to pocket an extra $1000 per trading day.

2. Why broker not just throw all positions to LPs why they have to manipulate charts and make their client lose ? If their just throw all positions to LPs i think it doesnt make the brokers bankrupt

A large number of brokers only pass net client positions to their LPs. So, if you and I decide to place opposite trades for the same amount on on the EURUSD, there's nothing to pass on to the LP until one of of closes our position. In this case, the broker keeps 100% of the commission, spread, and swap. Brokers that do this (or worse, like in the next paragraph) usually have strict rules about the minimum time trades are allowed to be open.

Some brokers never pass trades on to LPs. These are pure bucketshops. This means they, like a casino, get to keep client losses, but should have to pay client wins. And, just like a casino, anyone who routinely wins too much playing against the house will be invited to leave. Unlike a casino, the broker gets 100% of spread, commission, and swap on every trade and can also declare cheating with zero evidence to confiscate not only profits, but also the initial deposit.

3. Why even regulated brokers could scam or could potentially become bucketshop ? Cause they have sustain business and trusted by alot of client

More than one regulated broker has been caught scamming. They've been caught using plugins that allow them to manipulated spread, slippage, and than can give worst price during a small time window. They've been caught with inexplicable ratios of slippage against clients vs slippage in favor of clients. They've been caught "passing on trades to an external LP" that turned out to be a separately registered company operating inside the same office as the broker. When this happens, they pay fines and may lose licenses.

I recommend traders stick to well regulated brokers. Well regulated or not, keep a close eye on your broker at all times. Even a broker that has never cheated might be tempted to start cheating if they think it can be done in a way that few, if any, clients will notice.
 
1. If general forex brokers or even regulated brokers could take profit from spread, commission, swap and etc, why brokers need to manipulate chart for their trader like changing candle, requote, freeze accounts, and etc ? Cause the manipulation could make their image looks bad and down the rating

In some cases, real market slippage can happen and real price feed and/or LP issues happen. But, for sleazy brokers, it's not hard to add in a small bit of slippage against the trader on both entry and exit. Alternatively, giving the trader the worst price during a 100-2000 millisecond window as the trading is "executing" is also something that can be arranged. Done subtly, this sort of thing is easy to suspect, but very hard to prove. Imagine a small broker that processes an average of 500 round lots per day (500 lots opened, 500 lots closed). Grabbing an extra 1/10 pip on entry and exit would allow the broker to pocket an extra $1000 per trading day.

2. Why broker not just throw all positions to LPs why they have to manipulate charts and make their client lose ? If their just throw all positions to LPs i think it doesnt make the brokers bankrupt

A large number of brokers only pass net client positions to their LPs. So, if you and I decide to place opposite trades for the same amount on on the EURUSD, there's nothing to pass on to the LP until one of of closes our position. In this case, the broker keeps 100% of the commission, spread, and swap. Brokers that do this (or worse, like in the next paragraph) usually have strict rules about the minimum time trades are allowed to be open.

Some brokers never pass trades on to LPs. These are pure bucketshops. This means they, like a casino, get to keep client losses, but should have to pay client wins. And, just like a casino, anyone who routinely wins too much playing against the house will be invited to leave. Unlike a casino, the broker gets 100% of spread, commission, and swap on every trade and can also declare cheating with zero evidence to confiscate not only profits, but also the initial deposit.

3. Why even regulated brokers could scam or could potentially become bucketshop ? Cause they have sustain business and trusted by alot of client

More than one regulated broker has been caught scamming. They've been caught using plugins that allow them to manipulated spread, slippage, and than can give worst price during a small time window. They've been caught with inexplicable ratios of slippage against clients vs slippage in favor of clients. They've been caught "passing on trades to an external LP" that turned out to be a separately registered company operating inside the same office as the broker. When this happens, they pay fines and may lose licenses.

I recommend traders stick to well regulated brokers. Well regulated or not, keep a close eye on your broker at all times. Even a broker that has never cheated might be tempted to start cheating if they think it can be done in a way that few, if any, clients will notice.
Lot of talk, but no trustworthy, hones brokers to be found. Truth is, traders are used to keep the illusion og a "market" allive. There is no "market". One owner and subordinates, sucking up the "savings" of the people like a vakuum cleaner.
 
Not all brokers are bad, but there are a lot of bad brokers. Regulation makes things seem more secure but I've seen a ton of posts about issues with regulated brokers, same as with offshore ones. I think reading honest reviews from real traders on a variety of sites is the best way to find out which brokers are truly trustworthy.
 
Sometimes slippage and real time feed disruption or errors can happen.
Also the servers may be freezing but yeah some brokers are just bad actors and regulated or not some will always try
 
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