A market making broker makes money from the spread AND trading with/against you. They are creating the market you trade on (as opposed to an ECN platform which aggregates prices from many market makers (banks)) so they have a lot of control over what you do. The difference between the two models: ECNs want you to do higher volume so they get more commission, Market Makers want you to do lower volume and set stops/take profits so they know what you're aiming to do so they can hedge by trading the same way or completely against you (you buy, they sell (and do something to your feed in the meantime))...
Forex Robots - legit or scam?
- Thread starter beachlife
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A market making broker makes money from the spread AND trading with/against you. They are creating the market you trade on (as opposed to an ECN platform which aggregates prices from many market makers (banks)) so they have a lot of control over what you do. The difference between the two models: ECNs want you to do higher volume so they get more commission, Market Makers want you to do lower volume and set stops/take profits so they know what you're aiming to do so they can hedge by trading the same way or completely against you (you buy, they sell (and do something to your feed in the meantime))...
Stormin_Norman
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they do make money from the spreads. hence they dont want everyone trading the same type of market, cause its harder to match up and pass off.
brokers are in the market to make money. causing them to lose money means youre not a valued customer; which stands to reason.
Stormin_Norman
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ECNs are just passing your trades to a market maker. everyone are market makers in forex.
bucketshops trade against you.
non ECN brokers match trades internally, then pass the rest off to a bigger player. the matching up of trades means they dont need to charge you commission as they can make their money matching the spreads.
hence they dont want a big chunk of their clients using the same method, trading at the same time. because they are increasing the risk of losing larger amounts of money between receiving the order and passing it off because of the skewed orders coming in from everyone doing the same thing.
but please. ECNs just pass your trades to another market maker. maybe a larger one which means they can offer slightly better spreads. but they charge for it.
broker's arent out to get you. they just want to make money. they do that through matching trades, not having you lose your money.
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This must be a breach of some regulation. Not allowing a paticular EA to function but allowing others....
I smell a dead fish....
I smell a dead fish....
Stormin_Norman
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i dont read the fine print, but id imagine they can accept and reject whomever they like.
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Yea I bet...
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I guess the EA works and makes money after all....Scam....blow me....
You made 67 pips and your EA works?
Why is it trading in a bucket shop then? Why not play with the real big boys and move some serious volume........
If your lazy enough to find some free code from a website and think it will be the holy grail, then you have a nice surprise coming!
Sorry, that is the blatant truth, but I'm sure you will find that out for yourself.
the EA was designed to trade between European currencies during Asian trading times. These are supposed to be quiet times for the currencies, where they trade within a range, but with relatively little liquidity available.
But now all of a sudden all the brokers start getting hit with exactly the same trades at the same time, so who do they hedge with? It would be a race between the small brokers to lay off the exposure with a bigger player, otherwise the price will move too much and the small brokers would lose money.
The brokers will patch their market maker software to recognise the FAP Turbo trades and widen the spread at these times. It will take some time for them to fix their software to beat FAP turbo, so in the meantime they ban the EA.
Trembling Hand
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Don't think so Stormin MM don't hedge by matching then charging a spread. They take the other side and may hedge there overall exposure but mostly they look to take money from the client.
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Someone is always trying to take money from somebody else.
Do these so called Market Maker Brokers have the legal right to ban the use of electronic trading methods..
After all isn't this what a market place is supposed to be..
Trembling Hand
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LOL mate its not a market.
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Can you please explain why Forex is not a Market?
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Any companies purpose is to make a profit.
If your business is unprofitable, they may offer less favourable terms, like slower execution, or even decline your business.
The contract you have to sign to get an account allows them various terms, designed to make sure that they dont get skinned.
you might have to move around and adapt
If your business is unprofitable, they may offer less favourable terms, like slower execution, or even decline your business.
The contract you have to sign to get an account allows them various terms, designed to make sure that they dont get skinned.
you might have to move around and adapt
Trembling Hand
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A market is ran by an overseer to enable traders to exchange products under a set of rules that don't benefit one side. The overseer doesn't participate in the trades. (other than commiss)
MM CFDs & FX is a "market" that enables the MM to take the other side of their clients positions under their terms to benefit them, including size, price, time & execution speed. It aint a market. its a JOKE.
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Yeh, they don't get the name 'bucket shop' for no reason!
Well I guess we shall soon find out once they decide on the new spreads and whether they refuse to let a certain EA trade or not....
Stormin_Norman
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that's a bucketshop.
im talking about the reputable brokers out there. o+a being the best of them for retail fx.
Stormin_Norman
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CFD + FX are different. CFD's have a central market. FX doesnt.
every player in FX is a market maker. some are bucketshops which play a game against you. other's make a profit from helping you trade.
Trembling Hand
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So you know that they hedge your position?? Not take the other side.
What do you mean ECN are MM
What do you mean CFDs have a central market?
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Maybe thread title should be Banning FX Robots legal or legit...
