Unfair Trading Practices - page 2

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TraderSeven:
But there are also times the price runs in their favor.

Probably not on that spike but on other occasions.

Simple example.

You want to short at long at 1.2000

A fat spike and the broker gets filled at 1.1950

I never saw them complain about that.

What I see happening is they are blocking everything that possibly backfires on them. But the same strategies that are in their favor are fine.

True enough! That's why I read their letter as saying - "We don't want you straddling news on our servers..." Because they must know that we'll read that and say "Well, that just stacks the cards all in your favor, and we can' possibly make money that way..." And, of course, we can't...

I take it as simple economics. Price is the intersection of supply and demand, nothing more. In the case of "news" supply is short (the "real money" waiting until the news) and demand is high (individuals wanting a hedged position before the news), therefor the "price" of doing business (the spread) goes up. And, any positions available at that time, certainly aren't going to go to a single trader who wants a single lot, or even worse, a mini or micro lot, for example.

The fact is that our orders are filled at the discretion of our brokers and they aren't going to tolerate a system that eats away at their profits. Other brokers may not need to change their spreads to make up for it, as maybe they offer more straight through processing - if their clearing house gives you the fill, then so be it. But brokers with dealing desks have the fill it themselves before they clear it, they won't like this strategy, or a scalping strategy, etc.

Not saying its "right", just saying that it makes sense and that seeing things from the brokers perspective can help us see what they are going to do. I think that's helpful when we know for a fact that they will screw us every possible chance they get.

Remember, our account gains come out of someone else's pocket - I don't expect them to part with it so readily.

 

Someone inside the company told me the reason why the regulation come out at the day of big news.

One of reason she said was "that's not fair if trader/investor put order without making any technical analysis and only base on news which predicted will go in one direction".

"But," - she added - "it was only temporary. After a couple hour traders can put stop order again."

Funny, because good trader will follow the trend not against it.

Every system that developed by trader will follow the trend. Even contrarian one will has a trend following system.

This morning I spend a little time to think like the broker do. And you're right cubesteak, they do want to limit their LOSE and limit trader PROFIT. Why?

Imagine a lot of trader doing the same strategy all over the world. Who will lose? Who will pay if there is no one losing? The Broker!! So they apply this regulation to protect their capital.

Hahaha, when I realized that I can't help my self to stop laughing if I remember "the reason why the regulation come out at the day of big news".

That's a silly reason, hahaha.

Why dont just say : "If we let you trading, we will lose and pay you, the thing that we don't want to do."

or "We afraid being bankrupt."

Good lesson here. Broker never lose. They take spread, comisson, and slipage from every order you make.

When you profit, you get LESS from total profit because comission and slipage.

When you lose, you lose MORE because comission and slipage too.

And sometimes because a regulation, or a "server/connection error".

Reason why...... hahaha.

 

think of commission/slippage/spread as the cost of doing business and nothing more.

If you had a store and were going to sell a product of some kind did you expect to have the products that you were going to sell for free? Did you expect that someone will just give you the products to sell so that you can make 100% profit or more? Ofcourse not.

This is all the cost of doing business. However I do not agree with unfair tactics that brokers use such as price spikes, or on purpose connection failures etc.. but you guys must understand that the brokers are running a business too. There are many traders who are taking advantage of news therefore the brokers need to protect themselves. It is rational and logical to think this way.

Ofcourse I speak only from my perspective since I don't trade the news it doesn't effect me much!

 

Well said and to use your store example.

None (well most ) of us want the products for our store for free. (commisions, spread)

But the store owner will be pissed if he notices the truckdriver kept 10% of the products for himself. (spikes, fake spreads, etc)

 
TraderSeven:
But the store owner will be pissed if he notices the truckdriver kept 10% of the products for himself. (spikes, fake spreads, etc)

True enough!!

 

have to appologize about my outburst earlier ...but these guys are giving you 100-1 leverage for those of you who use that high..with all these traders at 100 and 200 and such leverages think about how many losses these guys take because of traders..they have to make a safety net for themselves these new rules dont bother me..except the straddling news but i did it on friday and had no problems..oh yeah that short i said i was making cleared out 250 pips almost when it hit fib box and 3 other 0 or 100 lined fiblines i took 1 small long before yesterdays big drop for 20pips then reversed back in for the rest of the drop

 

It's just how you look at things I guess.

There is nothing illegal about newstrading, scaling, grids etc.

We just use real qoutes.

That their servers are to slow or they can't keep up otherwise is is their problem. More the problem of bussines model they choose.

They could have passed through the prices directly and ask a commision.

Then all those problems would no longer be problem to them.

But they chose a way that allowed them to have more control (read manupilating prices). Unfortunately for them the EAs wreck their system and now they start adding all kind of restrictions.

The main question is: "Does the trader trade unfair, or did teh broker choose a wrong bussiness model"?

 

A broker looks like a casino's management. They do love a drunk gambler but hate card counter. When they see a man who counting a card, they tell him to stop. Traders with good trading system and/or good expert advisors will have the same situation. Not exactly the same but will be screwed up.

You're right TraderSeven about prices manipulating and I think prices manipulating caused many EA doesn't work in long term.

Why could it be?

Every EA designed base on prices, and what happen if the base corrupted?

Yes, the EA stop giving a good signal like it designed to be.

Then who will be happy?

Guys, you know the answer.

Will we have a good broker in the world? A good one with a good bussiness ethics?

May be.

 

don't forget the giant hedge funds, investment banks etc.. they manipulate forex by using their liquidity! It's not just the brokers.

http://www.investopedia.com/articles/forex/06/StopHunting.asp

edit: haha we're trying to outsmart banks with billions of dollars and take their money.. while trying to jump over hurdles that the brokers set for us, while still trying to take our money.. we're doomed!!

 

I have no problem with hedge funds trying to manipulate things.

It's just their way of trading. Being big has advantages. Being small also.

But try to every pip they can.

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