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Originally Posted by Catalonia
Hi!!
I think we all like to feel "important". I mean we all like to think: "brokers are against our trades they make us lose they chase our stops they wanna kill us" so on.
The fact is that brokers do not care much about our accounts except when "something happens".
Statistically they know for sure that 95-98% of us will lose all our money sooner than later. As simple as that.
So they take our trades on their own books. They do not send our trades through banks. They are confident they know we will lose.
The smaller the account size the better. For them of course.
When they see one of us making money in a sustained manner they do not take the risk they send our trades through banks. If that is an annoyance for them they could tell us to quit.
Things tend to be easier than we think. When a broker has an account funded with $500000 he will give the owner a better spread he will not take the risk. He will send him through bank. But when a broker has an account funded with $1000 he will say to himself " a 1000 dollar net profit + spreads".
By the way if you had an account with $500000 you'd not be trading with retail brokers nor reading-writing Moneytec threads.
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Now I do believe you are thinking properly. At least you recognize the fact that manipulation occurs to the extent that not all accounts are treated the same.
I do not believe price feeds are manipulated. By watching two or three different price feeds simultaneously I have noticed a pattern. For a time one will lead with a higher price then a different one. It is like one is saying to the other "I want to go higher I have a client who just went short." If the first broker doesn't have any bias he goes along raises his price up to two points (not three because then he would turn retail). After that point if the market does have enough dem (in the form of interested clients who want to go short) the second broker goes ahead follows the first raises his price further. In this way the brokers pass the ball to each other. You can quite clearly see it if you watch two feeds different brokers.
when it comes to hling accounts differently I believe the main reason some brokers offer 400:1 leverage is because they know these clients are more greedy their greed makes them more vulnerable. They become better targets. Remember a margin call is the same (electronically) as a stop. So if you think you do not have a stop placed you are near margin call the broker already has a stop placed for you. guess what happens? You get stopped out through a margin call.
It is time for us to wake up smell the skunk cabbage. The reason there is a huge proliferation of brokers is not just because the pip spread is so attractive.
Also when you say someone with a large account goes to a commercial bank for forex transactions I say not quite. Been there done that. They do not go to commercial banks they go to discount futures brokers. 3 pips is like a RT commission of $36 depending on contract size that is three times more than a discount broker charges for the same transaction on a CME EuroFX transaction. So large clients save 66% by not using forex. So guess who uses forex?
In case you are wondering the Globex prices for the Euro FX move in a mirror like way to the EUR/USD. Within seconds a one point rise in the globex becomes a one pip rise in the corresponding forex market. I know because I run both simultaneously.
Believe me there is a huge opportunity for manipulation using this h-off proceedure.
Patrick
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