Today when i was at the Airport waiting for departure time i received a call from one of this famous Forex retail brokers who for various reason i will spare him, the broker was offering me and my clients to shift to his brokerage with an offer that each of us me and all of my clients will receive $3000 bonus after we make our first $100 deposit and trade certain amount of contracts size, frankly i turned down the deal and bashed him out immediately, This is where the idea of this topic came from, you may ask why i turned down the deal.
Now let us not generalize things there are different kinds of brokers based on how they operate we have (true ecn/stp brokers) they take your orders or trades directly to the liquidity provider and earn on spread and commission and we have (market makers) this brokers they take the opposite of your orders and pretend to take your orders to liquidity providers and earn only from spread and commissions while in real sense they make money from your losses.
Now it is you to make your due diligence and chose a reputable well regulated, true ecn/stp broker. At least with a true ecn broker your goals are aligned, you have a win-win situation with him.
Okay let’s get into it, and let’s go through what your broker doesn’t want you to know then your will get to know how to place yourself in a good environment to win.
YOUR BROKER MONITORS WHAT YOU DO AND SEE WHAT YOU SEE.
Have you wondered how your buy limit/sell limit orders was left not triggered with a fraction of a pip and price went your pre determined direction and could have hit your take profit, surprising enough you had the same order with another broker and it was triggered at the same price.
Your broker see whatever you do, your pending orders your stop losses your take profits your everything, so just imagine your broker is a market maker they will do anything for you not to profit since your losing them money, it is in there best interest for you to lose, market makers are known for things such as stop hunts and slippages all this just to make you lose your money as fast as possible before you think of withdrawing it.
YOUR BROKER WANTS YOU TO LOSE YOUR MONEY.
Now with market makers, since they take the opposite side of your orders when you buy they sale and vice versa. So, when you make money, they lose money, when you lose money, they make money what a conflict of interest.
This kind of brokers open and register their business on less strict regulations get licence and operate in such kind of ways.
In social media they target naive less informed customers, offer them opportunities to open accounts with as little as $10 or even less and offer them huge amount of leverage 1:888 and beyond also offer them insane bonuses as such of i mentioned in the beginning, with such kind of bonuses they will tell you profits will be yours to withdraw but losses will be deducted from your initial deposit now imagine losses that can affect a $3000 account can they be tolerated in a $100 without blowing? And any profit realized will not be paid until the trader trades certain amount of contracts sizes. Surely you will blow that account and that is what they want. Now before you close your account with your broker because he has this characters make sure to check how well they are regulated and investigate if they are a TRUE ecn broker and not just because they said they are.
This kind of brokers have no interest at all for you to succeed they want you to keep on losing until you can longer deposit any more, then they advertise to get new victims.
THEY WANT YOU TO TRADE MORE OFTEN AS POSSIBLE.
Ever wondered why after you open, you’re account your broker calls you and does all his best by offering different kind of free services. Talking of market makers, they will give you seminars, market forecast even signals for you to trade as often as possible because after all they know 90% of traders lose money with all other reasons such as greed etc. So, they know if they can keep you well equipped you will keep on trading as often and think by trading more often your making more, getting richer fast but in real sense, you’re getting poorer faster. If your interested to learn how to trade like a professional and make money consistently you can join our program, “to become a winner at trading, trade less to make more” click here to learn how.
YOUR BROKER IS SALESPEROSN FIRST, FINANCIAL ANALYST AND TRADER LAST.
Before anybody starts throwing stones at me, there is nothing bad at this because that’s how their business model is, they earn money by offering you financial products through commissions and spreads, but what becomes bad is when they just do it for the sake of earning money while themselves would never use there hard earned money to invest on what they recommend on you. A good example of this go and watch the movie “the wolf of wall street”.
Yes, there are brokers who will recommend good investments to you and make it a win to win situation whereby they earn money and you profit but honestly speaking there a very few of them out there.
And speaking of market makers how could they educate you and recommend you good investments if your profits are there loses. Do your due diligence and avoid this kind of brokers trade in an environment where there is a win-win situation.
Okay guys I hope you learned something important that will set you for success, if you have any question or any ideas feel free to comment down below also IF YOU HAVE NO IDEA ON HOW TO CHOSE A GOOD TRADING BROKER click here to learn how market makers operate and here on how to choose a good reputable broker, thank you for taking your time wishing you all the best on your trading activities.
Professional Financial Market Trader. 4 Years of experience | Author at profxtigers.com