After spending the last 4 hours reading all the horror stories I have a few questions I'm hoping you folks can address. I've been trading for the past few months on various demo platforms and as of late am becoming a profitable trader ... at least on paper. I've found FX Solutions' GTS my favorite so far. No problems, very fast executions, no bad ticks and good customer support. No spam or sales people hounding me either. The questions; Am I to expect the honeymoon to end once I send cash and go live? Have they been lulling me into a false sense of security with the demo platform? A friend of mine who trades profitably (I saw his 30 day statement that confirms the fact) says he never sets stops or limits so the brokers doesn't get a heads up on him. He trades closely monitors charts and exits and enter on the fly at his profit or loss. Does this make sense? After 30 days I've racked up over $5000 in spread (fees) which is almost what I have profited. Why would a broker not be happy with that and not seek to blow up my account? Does anyone have any live experience, good or bad, with FX Solutions and thier GTS platform? Would be going to an ECN based platform such as IB or MB be a safer play? Does anyone have any live experience, good or bad, with MB trading and thier MBT Navigator? Thanks in advance for all the replys, A very nervous Frank
Frank, I personally don't trade forex with stops because they are a tempting target for a pip hungry broker. However, the forex brokers have no reason to try to blow up your account. Provided they can make a pip (or more)off each trade then it is all good for them. I used to complain that the spreads were far too wide- they were 5 pips on the majors when I started forex trading- now it has come down to the point where I worry that in some cases the profit margin is too slim - and that might mean more shady practices to get an extra pip or even some brokers going out of business. I haven't heard much about the MB model but I don't think it is a genuine ECN - would like to know how it works from people who use it. Finally: the main reason for success or failure is rarely the broker- it is you, the trader.
Forex brokers do have a reason to try to blow up your account. It is one of the fundamental purposes of any business. It is the obligation every business owes to its owners or stockholders. It is, very simply, the need to maximize profits. The faster you, the customer, loses his money, the faster the broker makes money. Think of it like this. Has your home ever been burglarized? If so, did the thieves only take half of you silverware, half of your cash, and half of your jewelry? No, of course not, they cleaned you out. The industry of retail spot FX brokers, with very few exceptions, is in business to clean you out, and then replace you from the endless supply of fresh meat recruits, rushing to throw themselves off the cliff like all the other lemmings before them. Why? Well, it is often written that when the famous bank robber, Willie Sutton, was asked why he robbed banks, he was said to have replied, "Because that's where the money is." Go with a broker that does not profit from your trading losses. Go with a broker that profits from your commissions, instead of from your trading losses. This way, your broker will be on your side, and will be motivated to get you the best possible execution prices, instead of the worst possible execution prices. This way, by taking only commissions, your broker profits best when he helps you to profit, and then, via the commissions you pay, your broker shares in your profits, instead of reveling in your losses.
This just isn't true. Do a little research on the CFTC website. You will find an amazing, endless number of fraud cases in which astonishing amounts of money were stolen from customers by so-called FX brokers. The retail spot FX brokerage industry is running amok. It is a festering cauldron of fraud, lies, and deception. The main reason for failure, in retail spot FX trading, is very much the broker. You need to have a good broker, before you will even have a chance to become a profitable trader. Here is a warning from CFTC: Take a look and learn for yourself: http://www.cftc.gov/opa/enf98/opaforexa15.htm http://www.cftc.gov
If you didn't open a trading account, would you lose any money? No. So the trader is ultimately responsible for his decision to trade and make or lose money.
Roberk says: Finally: the main reason for success or failure is rarely the broker- it is you, the trader. -------------------------------------------------------------------------------- Jimrockford says: This just isn't true. Do a little research on the CFTC website. You will find an amazing, endless number of fraud cases in which astonishing amounts of money were stolen from customers by so-called FX brokers. The retail spot FX brokerage industry is running amok. It is a festering cauldron of fraud, lies, and deception. The main reason for failure, in retail spot FX trading, is very much the broker. You need to have a good broker, before you will even have a chance to become a profitable trader. ------------------------------------------------------------------------------- I am sorry Roberk, but Jimrockford is 100 % right. It is a myth circulated by brokers that 95 % of traders fail just because they are poor traders. That 95% of them fail is probably correct but the truth is that these traders fall prey to the forex sharks - namely brokers and liquidity providers - with shadowy practices who have a vested interest in whipsawing prices, hit stops, trade against you to clean your account. When I first started trading some years ago and was losing money, I never used to hear from my broker(s). For the last few years that I have been profitable, those brokers have taken issue with my trading style because i am no longer a source of income to them. When this happens they resort to strategies to stop you like, reduced leverage or dealer intervention, all aimed to disable or hurt your trading until you eventually move on. They want to keep losers not winners - its like at the casino.
LOL, year right. I know COINZ/SKALPZ would add quite a bit of color to this thread. I'm sure he uses an ECN though.
Let's tell everybody the truth. The vast majority of people will never be successful traders, no matter how hard they try, and no matter which broker they use. This is because only a very small minority of people have what it takes to succeed as traders. Most people in this very small minority will not succeed, in the realm of spot retail FX, if they do not pay attention to the CFTC's advice, and exercise great care to find an honest FX broker. One's choice of broker is critical to success as a trader of any vehicle, although this goes double for spot retail FX.