The problems with the Market Maker Brokers has been written to the unspeakable.
A Market Maker Broker works as a counterpart to the open positions of its customers. And there are many traders who are wary of this type of Brokers, although in practice, a good broker, is a
It is a fact that the Market Maker Brokers makes money when you lose money. That’s why we have the false impression that the Broker is going to be tempted to manipulate the prices, to provoke losses to their customers. It is also a fact that there are brokers who fall into the “unethical”, to put it mildly. And gives the same impression that Market Maker, ECN, STP or DMA, anyone of this, can manipulate the game as they please.
We just need to see the recent scandal of
fxcm. In which the firm providing liquidity to the Broker, was their own property, indirectly. Therefore, was operating as a Market Maker, but in a disguised form.
This is not the same to say that their clients have suffered in the operational, whereby merely hiring a Broker ECN. But in practice, it was a Market Maker. In the U.S., the Market Maker Brokers have many limitations to operate.
The Market Maker Brokers live out of the commissions of their customers, and in addition, out of their losses. But they do not need to manipulate the platforms, or prices to get that.
We are going to think for a
Why in the world they are going to complicate their life by manipulating prices and the platform?
It is better to go through an honest Broker or at least
Problems with the Market Maker Brokers, Books.
The Market Maker Brokers creates a market for their customers. Although the prices are similar to those you will find in a ECN, STP, DMA Broker…
The transactions of the traders who
The price is which it is, there may be a few pips above or below. But there are no major differences between the quotes that you can get in your Metatrader 4 XM. Or you are going to receive in your Pepperstone MT4 platform.
Prices dipped in the different pairs, are received in the same way in the platforms and that traders are going to or not to the market.
Then, where is the question?
Are There Brokers who persecute traders who make money consistently?
It is possible, I have no doubt that there are dubious practices. But unless the Trader is moving hundreds or thousands of dollars a day and generating profits out of the ordinary. I do not believe that a Broker is going to persecute the traders who earn a few hundred dollars a day. When there are thousands of traders who lose those hundreds of dollars on a daily basis.
The reality that lies behind those problems with Market Maker Brokers is in its aggressive form of getting new customers.
These customers usually have little or no knowledge at all. Which leads them to lose their money in a consistent manner, and instead of
With this, I repeat, I do not say that there are brokers who make bad practices. But it does not have to be exclusively Market Maker. Bad Brokers There are all kinds… FXCM is just one example of a broker which is not Market Maker, and have defrauded their customers.
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