Is there any broker who is happy, even if you consistently win?

[ibvr2004]

Based on the posts above, it seems that some brokers are act like "illegal sports bookmakers" but not "middle man".

Is it true?

[TRADE]

wheather a broker is happy with your success' or not, should be no concern to the trader.

they are in business to provide a service, control their risks and make a profit. they have their business plan as you should have too.

if a successful trader is trading through any broker it would be in the traders best interest that his broker does all things possible (legitimately and ethical) to ensure that when you win you will receive your money. if this means copying trades so be it.

if you are a consistently profitable trader why wouldnt you want them to control their risks to ensure your payment or prevent bankruptcy. them going bankrupt through your trading is the last thing you should want!!!

sure, if the majority of their accounts are consistent losers then they wont need to worry about hedging their books, they will just let you trade and lose your money.

if you pretty much break even over the long term, then you are in the position where you can be suckled by your broker, you will consistently churn your account, allowing them to profit from the spread without you going away and hoping that you cling to the dream of future riches. you are consistent profits for them as you could be around for the long term without making a withdrawal.

hope some find value in my opinion

[Briancio]

This is a really great thread. I never thought that they would be against you since you are their client.

[DW]

Why is this very question so difficult to answer? There seems to be some very seasoned traders logged into this forum and yet there is still unending speculation among the general population as to just how brokerages work and how they make their profits. Some people say they make money on the spreads, others say they make money trading against you, others say they take your position once you close it......does anyone here really know for sure? I'm sure there are people who do know. I wish they would speak up. I asked what I thought to be a very basic question, "Are there any scalper friendly brokers out there?" So far nobody has said a word or given any response. Someone has to know. I for one would love to see this particular thread continue until the many thousands of us get an honest answer to this very simple question. It completely boggles my mind that this industry is not regulated and leaves people to guess as to just how it works. I'm sure this will all change in the next few years when ECN's come into play for the whole, or large segments of the market. Any thoughts? ANYONE!?

[DW]

Originally Posted by Ogeima

Yes, there is, but in forex there are very few -if any? The brokers that are happy whatever your results are, are those whose service to you is solely to transmit your order, for a commission. For example, a futures' broker couldn't care less whether you make profits or losses, as long as you keep trading through them: they send your order to a centralized market, and pocket in a commission in the process for that job.

How can an average trader identify such brokers? I'm growing a bit weary of the brokerage hunt. I am ready to trade again but I do not want to waste my time on another broker's add promise or the performance of their demo system as compared to live trading. Any help would be much appreciated.

[MickMason]

Originally Posted by DW

How can an average trader identify such brokers? I'm growing a bit weary of the brokerage hunt. I am ready to trade again but I do not want to waste my time on another broker's add promise or the performance of their demo system as compared to live trading. Any help would be much appreciated.

What is it you're trying to do exactly?

I read in one of your posts that you have 6 years experience in the markets so I'm guessing you know roughly how marketmakers operate. As you'll probably know, marketmakers don't object to scalping per se as long as it's not them you're trying to scalp (ie keep your hand out of their pocket!).

It's not absolutely clear what you're looking for so it's not easy for anyone to answer with specifics, perhaps you could elaborate slightly?

Cheers

Mick

[DW]

Originally Posted by MickMason

What is it you're trying to do exactly?

I read in one of your posts that you have 6 years experience in the markets so I'm guessing you know roughly how marketmakers operate. As you'll probably know, marketmakers don't object to scalping per se as long as it's not them you're trying to scalp (ie keep your hand out of their pocket!).

It's not absolutely clear what you're looking for so it's not easy for anyone to answer with specifics, perhaps you could elaborate slightly?

Cheers

Mick

Thank you for responding. I'm still somewhat confused about how FX brokers work as compared to trading the NASDAQ I suppose. I didn't know it was possible to take advantage of a brokerage, if there is such a thing. My assumption is that the brokerage is making money off the spread of my trade regardless of whether or not I make a profit. Is this concept an illusion in forex? If you could set me straight on that matter it would help a lot. Ok, to be specific. I found that on my current practice account the brokers bid/ask price sometimes lags behind the chart price. Sometimes the brokerage price leads the chart and sometimes the chart leads the brokerage price. I have been able to consistantly make money on my practice account and repeat the results over and over again. Even with several small losses each session I can easily pull 30-40 pips per session in an hour or so. I want to be able to do this with a real account, however; in my never ending search for a good broker, I have read countless post on this forum and others that say using this technique is called "Picking" by the brokers and "Scalping" by normal traders and is forbidden. How can that be? The firm that I'm practicing with at the moment has been refered to as a bucket shop on several web sites including some post from this forum. I desperately want to be able to use this technique using real money if I can find a broker who will allow me to do so, have a three pip spread or less on GBP/USD, have one click trading and immediate fills. Please tell me I'm not dreaming. I have traded and studied and traded and studied for years. I've made a small fortune and lost a small fortune in the learning process these past years. I've finaly had the "Ah Ha" moment that traders dream of, when everything becomes clear and suddenly makes sense and your able to trade for a profit time after time AND this technique suits my trading personality perfectly! I am so desperately searching for an experienced forex trader to help me put this into action. There has to be a way...your thoughts would be very much appreciated. Thank you again. DW

[MickMason]

Originally Posted by DW

Thank you for responding. I'm still somewhat confused about how FX brokers work as compared to trading the NASDAQ I suppose. I didn't know it was possible to take advantage of a brokerage, if there is such a thing. My assumption is that the brokerage is making money off the spread of my trade regardless of whether or not I make a profit. Is this concept an illusion in forex?

Those wanting to take advantage of marketmakers are finding it harder as opportunities are limited now, the trader who wanted to double his account on NFP release is finding either his trade is reversed (as the fill price never existed) and/or he's put on manual execution. Marketmakers profits come primarily from spread (plus shade), but they also have their own market analysts and depending on their risk management policies will hedge all or part of their clients net aggregated positions in the market. In essence they prefer you made money, that way you'll stay trading, they need us just as much as we need them.

Ok, to be specific. I found that on my current practice account the brokers bid/ask price sometimes lags behind the chart price. Sometimes the brokerage price leads the chart and sometimes the chart leads the brokerage price. I have been able to consistantly make money on my practice account and repeat the results over and over again. Even with several small losses each session I can easily pull 30-40 pips per session in an hour or so. I want to be able to do this with a real account, however; in my never ending search for a good broker, I have read countless post on this forum and others that say using this technique is called "Picking" by the brokers and "Scalping" by normal traders and is forbidden. How can that be?

It's a kind of variation to platform arbitrage in many ways, if you can find two platforms where one lags the other consistently then excellent. I think most traders have another price feed up, either charts or another brokers platform, I do, one lags the other by a pip or two but not enough to trade on exclusively, the most it does is save me a pip or so on spread. The 'problem' would be guessing which price is lagging, you've got that sorted by the sound of it if your primary (live trades) broker lags, very nice!

The firm that I'm practicing with at the moment has been refered to as a bucket shop on several web sites including some post from this forum. I desperately want to be able to use this technique using real money if I can find a broker who will allow me to do so, have a three pip spread or less on GBP/USD, have one click trading and immediate fills. Please tell me I'm not dreaming.

You're not dreaming, and there's no reason why a broker should be able to spot what you're doing if you're not too blatant. As long as you're giving them the opportunity to hedge your position and don't leave them holding the baby then why should they care? I'm guessing you're talking about FXCM when you mentioned bucket shop? They'll never close you down anyway, no matter what you do, but they may invite you to trade via Propfx on the Currenex platform. As a contingency plan it may be worth asking them to let you demo Currenex and checking if your strategy works on it seeing as you're exploiting potential quote differences. FXCM's spreads aren't the best though, have you thought about Oanda? Spreads are tight but widen before/after news/data, and they're not one click, or how about CMC? I have a live account with them and never had any problems, one-click, fixed spread, very occasional requote around news/data, immediate fills, you could do worse.

I have traded and studied and traded and studied for years. I've made a small fortune and lost a small fortune in the learning process these past years. I've finaly had the "Ah Ha" moment that traders dream of, when everything becomes clear and suddenly makes sense and your able to trade for a profit time after time AND this technique suits my trading personality perfectly! I am so desperately searching for an experienced forex trader to help me put this into action. There has to be a way...your thoughts would be very much appreciated. Thank you again. DW

Oh I know that feeling! When the light finally comes on then comes the apprehension about whether it really can be done, and all the sayings like 'if it's too good to be true it probably is' come to mind. The bottom line I guess, and the only way to find out for sure, is try it and see, if they (the broker) gets upset then so be it


Cheers


Mick