I studied and practiced for quite awhile and as soon as I went live those MM make sure to go against your trade-they along with the big banks make the money.
This is something I received from an obviously disgruntled now ex-forex trader. I think you can figure out where I stand on the subject. The primary argument folks who call forex a scam put forward is that fact that forex brokers take the other side of your position in their market making actions.
They thus conclude that said brokers are trading against you. First of all, not all forex brokers are market makers. Some are ECN s.
They simply pass your orders through into the market like a stock market broker does. They make their money from commissions instead. Oh, and by the way, not all stock market transactions are straight pass throughs to the exchange either.
Some brokers act as market makers in certain stocks. If you trade those stocks through them they are doing the exact same thing as the non-ECN forex brokers do. Further, the whole basis of the interbank market — and all OTC markets — is transactions between buyers and sellers and market makers. In interbank forex, the banks are the market makers, both with and amongst each other and with the funds and companies that are their customers.
On top of that, there are market makers in all markets. They are the ones who provide steady liquidity. They do that by always being ready to provide a quote and take the other side of a trade. Without them the markets would operate much less smoothly. As a rule, market makers in all markets look simply to make the spread over and over and over again.
Forex brokers who act as market makers operate in basically the same fashion. They are just offsetting customer longs and shorts against one and other. Do they sometimes have an overbalance? In such cases they have internal processes which determine whether they keep the exposure or whether they offset in the market. Different brokers handle things different ways in that regard.
That gripe has been in the markets for years — all markets. Traders in the futures markets are supposedly notorious for that kind of action. The markets and market makers exist to facilitate transaction flow and make their money from it. They are going to do whatever makes sense to increase that flow. That periodically could include running stops. That sort of action, though, is a bit easier in a centralized market than in the widely dispersed forex market.
As such, stop running is not something easily accomplished. It would take a highly coordinated effort among a wide array of market makers to do that kind of thing. In most cases, the claims of stop running coming from forex traders is nothing more than people getting burned by putting their stops too close to the market and getting taken out by normal volatility.
The question I would ask for anyone who is making a claim of forex being a scam is whether they can demonstrate a trading system with a meaningful track record of success and that they followed said system as designed.
A lot of traders spend a relatively short period of time in demo trading and make good returns with no real proven method, then find that things are very different when it comes to real money. This is more about the trader than the broker. The idea that your broker looks at your specific open positions — out of the many thousands of trades that might be open at a given time among all their customers — and make decisions based on it is egotistical and self-centered in the extreme.
Are there scams in the forex market? Anywhere you find a lot of money you will find scammers. If you avoid those with extraordinary claims and stick with regulated companies, though, you can avoid being a victim. These demo accounts all have live charts on them. Anyway, my whole point is… If you think the market maker is trading specifically against you, check the other vendors charts!
Seems almost like just about the time I give up and bail out of my position, the market moves in my direction immediately afterwards. So, I checked some other charts.
Guess what, besides the spread, they were identical. Yes, Forex is opertated like a scam! These Hedge Funds and major institutions see all orders coming through and trade against them with their millions and billions of dollars causing all of the small traders getting wiped out.
How is it when I practice trade the trend continues as predicted, but when I place a big order it immediately switches direction and wipes me out? I do not now, nor have I ever worked for any bank, brokerage, fund, or any other institution involved in taking positions or managing transactions in any market. My work as an analyst is for a group which provides analysis on a 3rd-party basis. I personally transact with AVAfx, a forex platform. What I experienced is that anytime I opened the platform ready for trade, a position would be opened automatically against the trend without my involvement.
I reported the case to AVAfx but claimed it was a virus on my computer. I formated the computer and installed an antivirus, same thing happened. My question then was that why is it that a positioned is opened against the trend and not in the direction of the trend? I am not convinced yet i have been conned, and more proove will be required before i trust any forex broker pertaining to offer me direct access to the real Forex market.
I am desperately looking to find a way to make money from home. Im willing to invest in the time to learn. Im even willing to start small and take the time to build it up. Should I do Forex? I barely know the difference between the two.
Is it even a viable option in todays economy? Kris — I strongly recommend you look at my introductory trading course or book. They were both specifically written for people like you who want to get involved in the markets, want to do it right, but need a good starting point. Mark — Contrary to what you may have heard, forex is increasingly more and more regulated. Stocks are neither easier nor harder. All the same mistakes trip traders up.
The only difference is the permissible leverage. Believe me, regulation does not mean less chance of losing money. I and millions of people need opportunities to survive. After researching all complaints, looking at broker websites, the nfa and ctfc websites, I concluded that though the forex market is legitimate, forex brokers are not.
It is a scam to trade the forex market. It should be heavily regulated and enforced. I been reading Mark common from beginning. I know how you feel MARK and completely agree with you. I trade for living and I do very well in Stock market.
However Forex market is whole new game, every tick is being control by interbank, every tick it move it move to make money for the banks own interest, someone win someone have to lose. Do it for about or trades. I do believe their is a lot of market manipulation and that Traders really start believing their own mail — certain economic analysts are very capable of saying anything the institution they work for want then to say to set up market conditions.
Oil Futures are one good example and crashed when OPEC finally called them all out by cutting production not once but twice. The Aussie Dollar is the sixth most traded currency in the world — it does not deserve that status — but dealers see it as safe and able to be manipulated. The big fund managers can easily set a market to their requirements. In other words, if you go to the casino, you have the same chance to win or lose. However, there are testimonials the ones who are not caught at the doping test, which is a true farce who swear that they did it.
They are simply paid off to lie to the public, so the dream can continue. The market is the same. Good trades to everybody. Why are you selling yourselves short and taking these losses? Of course the market is going to go down. If you actually followed it while trading, you can easily ensure that you make gains in the end. Buy low and sell high. Obviously there will be some fluctuation in the market, but have a little patience for crying out loud, and stop thinking the market it a get-rich-quick scheme.
I am an experienced equities trader with more than 12 years of online trading. After 1, trades over the course of 11 months, All types of trades: I have used numerous technical analysis tools, many of which have proven helpful and profitable in my stock trading. There is NO mathematical model to support it. But there is simply no other explanation. Thus, your logic is flawed from the start.More...