Can broker kill a profitable (non-scalping) trading system?

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Otomaru
648
Otomaru  

With my three years of FX experience I still have very little idea how forex technically operates. As I grow better in trading (and I do, no kidding ), I realize that "TA signal based" systems are not so far away from roulette and that systems based on the actual nature of price, like volatility, will make a much more reliable, relaxed, and profitable foundation for trading.

The thing is though, such systems can be easily killed by manipulation on the part of the broker (dealing desk). Not even by manipulation of quotations, but simply by not opening a position for a purely "Legitimate" reason like re-quote.

Is "individual treatment" of traders technically possible for a dealing company? I have asked this question on a couple of broker's forums and, strange enough, instead of a clear answer (like "technically possible, but will only pay back for a huge account" or "not feasible technically" or "yes") I only got replies like "first earn a million and then we'll talk about it" or "if paranoic, leave the FX market" etc.

Maybe those who know how it technically works can put my mind to rest on this issue.

Cheers.

Otomaru
648
Otomaru  

Allright, noone knows... but wait - I will soon post you a translation of a very interesting convesation I am having with (allegedly) experienced traders on the subjectwho have met MANUAL dealing. Say you say me (anyone interested in that?)

duxis
21
duxis  
Is "individual treatment" of traders technically possible for a dealing company?

If you respect the rules, if you can prove an "individual treatment" and if your broker is regulated by NFA or FSA, They will be punished by a big fine.

Would they take the risk to be exposed ?

Otomaru
648
Otomaru  
duxis:
If you respect the rules, if you can prove an "individual treatment" and if your broker is regulated by NFA or FSA, They will be punished by a big fine. Would they take the risk to be exposed ?

I mean, how can you prove that you have being purposedly requoted (not opened a position during a "fast" market movement, and who defines what is "fast")? Let alone the fact that, thank God, NFA authority does not apply to Russia (does it to France?).

And how you can prove anything sitting at your laptop thinking you are trading?

Basically, there are so many "if's" in you first sentence that it makes fulfillment of a FX trader's rights impossible.

But as I said I will soon post a translation of my conversation with some experienced traders. Quite enlightening. Looks like I have to go to a bank.

Cheers mate.

Ms_Mel
231
Ms_Mel  

I've been asking myself this question for... well forever. No clear answer either. As a trader, you know what your "game objective" is. What I told myself is, if I were a broker, what would my "game objective" be, seeing as I've got access to entries, stop losses, TPs and everything else (although you can use some EA features to hide these, but that's for another thread). The bulk of the traders makes similar decisions, so I'm almost sure that looking at stop loss areas, for instance, is one of the practices they use to move prices there. At least it's my observation. So you can try and play their game along with them, I suppose.

But then again, I might simply be "paranoid".

Happy trading to all,

nmx
81
nmx  

Brokers platforms are provided with the technology to categorize traders and give each category a certain degree of re-quote, slippage, and even spreads so even if U're not being treated individually (which will require a lot of human recourses ) you are treated according to your trading style and profitability.

Jason_Rogers
128
Jason_Rogers  

If you're afraid of your broker shutting down a profitable trading strategy, then you need to find a broker where it's not you versus them.

Requotes, delays in execution, etc typically occur on a dealing desk because your profit is the dealing desk's loss. No one wants to lose money and a dealing desk is looking out for their best interest as well.

Go through a broker where they're not profiting off of your loss, but instead has an interest for you to continue trading.

Ms_Mel
231
Ms_Mel  
Jason Rogers:
If you're afraid of your broker shutting down a profitable trading strategy, then you need to find a broker where it's not you versus them.

Requotes, delays in execution, etc typically occur on a dealing desk because your profit is the dealing desk's loss. No one wants to lose money and a dealing desk is looking out for their best interest as well.

Go through a broker where they're not profiting off of your loss, but instead has an interest for you to continue trading.

Hi Jason,

Can you provide info on "brokers who are not profiting off your loss" ? Do these actually exist? I've always thought they did and simply made their gains off spreads (fine with me, I'll give you a little, you give me the opportunity to trade, then after you've got your spread, lemme do the rest of the work and who cares about my p/l afterwards) but I never found any, only found there always seems to be this little thing they need to get MORE (by stop loss hunting, requotes etc.)

Thanks,

Jason_Rogers
128
Jason_Rogers  

Hi Ms_Mel,

FXCM is one broker that uses no dealing desk execution. Your orders are routed to the banks for processing, and the banks are taking the other side of your position, not the broker. All expert advisors and strategies are accepted, including scalping EA's. MetaTrader 4| Meta Trader - Forex Trading Platform

Your reasoning is very correct. You are in this to win and the broker you are trading through should be on your side as well. The way a no dealing desk broker will make money is through trading volume. For each trade you place, they are compensated with a portion of the spread or a separate commission.

Ms_Mel:
Hi Jason,

Can you provide info on "brokers who are not profiting off your loss" ? Do these actually exist? I've always thought they did and simply made their gains off spreads (fine with me, I'll give you a little, you give me the opportunity to trade, then after you've got your spread, lemme do the rest of the work and who cares about my p/l afterwards) but I never found any, only found there always seems to be this little thing they need to get MORE (by stop loss hunting, requotes etc.)

Thanks,
Styex
30
Styex  

The biggest problem I've seen in the forex market is too often traders blame a broker for their downfall when in actuality it was their trading logic or over leverage.

Now broker have not been the most forthcoming parties in the world, however in order for them to ruin a profitable trader single handedly, they would have to go way out of their way, and also would potentially imbalance their systems risk.

If you have a truely profitable system, the only thing that can make it unprofitable is the market or yourself. The market is constantly shifting, if your system is not constantly adjusting then inevitably you will fail.

poruchik
1922
poruchik  
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