Quote:
Originally posted by Sasha
I'm really new to all of this but what I just can't understand is...
Everything is fast now. Why can't it be automated where if a trader presses "BUY" the order goes directly through the broker to intrabank where it is bought. The broker keeps the spread and makes his money there. If the client looses or wins, the broker still makes money.
Surely the intrabank is offering cheaper spreads than the broker offers to the client, so why would this system not work? In more simple terms, being a broker is a service provided to the individual. They take the low volume that the intrabank wouldn't normally have time to deal with, take a couple bucks for their troubles, and send the trades into the intrabank. What's wrong with this?
In this case scalping would work. Unless you're saying the prices posted on the charts aren't true. If thats the case where are they coming from?
There should be intrabank charts where you buy and sell on those prices. Maybe its just simple thinking, but sometimes its the simple thoughts that bring sence back into people.
It seems to me liek the brokers are just greedy, and want to make money off the loosers on more than just the spreads.
But then again as I said before I am so new to trading its almost sad.
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Don't forget that brokers are doing you a favour by letting you trade 10k lots with your $500. They can't offload those smaller lots one by one so will collect them up and match them off for the "better" traders and leave the losing traders positions to run off. At least that's how it works at one place.
The more money you have and the larger size you trade, the more say and control you'll get. But even then, you'll find that "retail" interbank isn't without problems, such as liquidity at certain times which is masked by your bucket broker isn't at retail interbank.