FOREX.... is it real trade ... or just Big Game ??? need help

[peteuk]

Originally Posted by JR97

Retail forex is a game. The new casino of the 21st century. People who think otherwise are suckers. Especially "news" traders. Doesn't mean you can't win the game. Just don't kid yourself that youj're a market trader.

I see, so just explain to me what happens to that 100 lot trade placed right on NFP release, are you saying the broker takes the other side and doesn't hedge any of it to cover his risk??? Why the delay in filling it then? Why the requote? Does his business model include taking the risk of paying out to the tune of 100k if price moves 100 pips in the clients favour? Now multiply that risk by the number of clients who trade data like that profitably, the marketmaker would go broke double quick time!

Marketmakers only hold positions they are comfortable with, the rest gets hedged in the "real world", part of which may be your trade.

[JR97]

Consider the fact that 85-90% traders lose. That is how they can cover those that win. And they are required to have enough cash on hand to cover.

Most retail orders are filled in-house first. Matching up buyers/sellers internally and going out of house if need be. And from what I understand, most retailers try to keep enough spare change on hand to cover as much interally as possible before ever going to the real market.

No different than a casino. The losers cover the winnings of the winners. The averages over time are definitely in the retailer's/casino's favor.

As far as re-quotes etc go... it's either re-quote or have a variable spread. Take your pick. Trades have to be matched up somewhere whether internally or on the market. Not an easy thing to do during NFP. The fact that a retailer says their spreads are fixed tells you right there that they take the other side of the trade because the REAL market there is no such thing as a fixed spread. In the REAL market, the spread is determined by the market itself.

Go read up here: http://nondealingdesk.blogspot.com/

[peteuk]

Originally Posted by JR97

Most retail orders are filled in-house first. Matching up buyers/sellers internally and going out of house if need be.

Trades have to be matched up somewhere whether internally or on the market.

Well exactly, and that was the posters question! 'Most' does not mean 'all' though, but in any event it's not a matching exercise per se otherwise your orders would not be filled within milliseconds any hour of the day or night.

The marketmaker takes the other side of every trade and covers his risk by hedging the balance (or part of the balance depending on their business model and market bias). Larger orders are hedged immediately if the dealer so decides, again depending on market bias. Market orders over a certain amount require the trader to request a quote.

Marketmakers are not in the risk business.

[JR97]

Originally Posted by peteuk

Marketmakers are not in the risk business.

Markets are the risk business. Anytime anybody.. trader, broker, sports bookie, poker player, etc, takes the other side of a trade or bet it is the risk business.

[peteuk]

Originally Posted by JR97

Markets are the risk business. Anytime anybody.. trader, broker, sports bookie, poker player, etc, takes the other side of a trade or bet it is the risk business.

That's why he hedges his risk, because he's not in the risk business!

JR, I don't mean to appear argumentative but you're making my case for me.

[JR97]

Originally Posted by peteuk

That's why he hedges his risk, because he's not in the risk business!

JR, I don't mean to appear argumentative but you're making my case for me.

Yeah. I don't know why we're having what appears to be an argument. I think we're on the same page in the end.

[ammar orfaly]

hello a gain...

check for the link & tell me what u understand???
http://www.panafex.com

it is full virtual market ... nothing is real...

when u get in a trade (buy as example) they do nothing but find another
who need to (sell ......) and much u and him ..
without any real trade or mony..

so ..... one take from another and broker take form poth.

this is one of virtual markets..."panafex"

and me sure there are alot of markets the same way.....

just maching tradere against others and no trades in facts..

this panafex is the background of many forex clearing houses

such fxch .... www.forex-swiss.com

2 pips on all pairs..... no intrest over knight .. no commistions


NO REAL TRADE ........... BIG CASINO....

[peteuk]

Originally Posted by JR97

I think we're on the same page in the end.

I reckon you're right.

I'm not sure what happened to our friend 'orfaly', his English seems to come and go like a phoney accent, lol

Own up orfaly, who are you really