The majority of traders who are either beginning this journey or an on a path which they don’t know well, have an opinion that their broker is one of their biggest enemies.
Brokers closed out my trades, the broker is taking a contrary position against mine, broker closed my trade and the position went in my favor later on… You can continue
the excuses yourself.
I know them all and much more. I was one of them, but I cut my path short at the moment I started working for one of the major brokerage companies mostly covering US clients.
Complaints that your broker is making its money by trading against you can only be true if you have selected the worst broker to present you and your money, and let’s be
honest, this is your fault. You didn’t do your own due diligence, you didn’t commit yourself, and didn’t check properly where you have sent your money to and with whom you
have started your business.
If you don’t know where to start and dig some dirt about your broker, you can always go and check www.forexpeacearmy.com, where millions of traders compare and check their opinions
about brokers they use and wherein any complaint or dispute brokers are getting involved in order to explain to other potential clients what the issue is. Honestly, all the major players(and by those
I consider all prime brokerage houses with a rating from 3.5 stars and above) wish for a dispute opened by the client on the forex peace army website to be closed as soon as possible and of course, in the broker’s favor.
Brokers as everybody else in this business are here to make money. So are you and millions of other traders. Imagine you are a broker, what would you do if you have a couple of hundred thousand clients trading.
Imagine now that you are a broker whose business is not fair to clients, how long will your business last? A year, two, three… Yup, very very short. And you will get labeled and not be in a position to open a serious
brokerage house later on.
As simple as it can be, brokers mostly make money of commission paid by clients for the opportunity to trade. And that’s it. I know it might be hard for some of you to understand and grasp this, but that is true.
Brokers make money out of client’s commissions for opening and closing positions. Imagine you have 10.000 active clients who are trading half a lot position with your commission of $3. You have 25.000 clients trading 0.1 lots
a position with your commission of $1 roughly, and you have 1000 clients trading 1.0 and more where you roughly make $6(and more, depending on the lot size).
Add this all up:
10.000 x $3 = $30.000
25.000 x $1 = $25.000
1.000 x $6 = $6.000
$61.000 out of clients commissions per day
And that is something a mid-level brokerage house can make in a day or two. Imagine a bigger brokerage company, with a couple of hundred thousand clients worldwide, or even a million of them. A lot of money, coming in regularly.
Do you really think that someone is wanting to have a bad influence on their hard built business? No. And that is the only answer. Why? Because trading is business, your broker is running a business, you as a trader are running a
Now, we are coming to a point of the one making a complaint. And that is, unfortunately, you. The usual reason for that is your either way to bigger of a position traded or your wrong approach to trading and faulty decision making.
And I know what I am saying because I had tons of clients opening buys on a clear downtrend and sell opportunity. I had clients who had a couple of hundred bucks on account balance opening a 0.5 lot position. Imagine that!
If your risk and money management is on a good or satisfactory level, and you care about your money and you know what are you doing, 0.5 lots position would be opened if your account balance is at least $35.000 and more.
If that’s not the case, you are risking way too much and there is a landslide waiting to pick your account up and take it on a path without coming back. But remember, if such a thing occurs, you are to be blamed.
I know, I know, a lot of Forex gurus online are showing off in their fancy cars, private yachts, and jets, doing all the business from their phone or laptop. Hmm, yes. Except you don’t know that majority of them is either trading
on the demo account or fixing up a trading statement where only profitable trades can be seen. You barely have a chance to see a full couple of month’s statements taken out from their desktop MT4, MT5, Ninja Trader, Ctrader, or any trading platform out there. Why? Because it takes a lot of time to fix that up so only profitable trades are shown. It’s consuming too much time for them, and they are in-game of making quick money. Out of people like you, unfortunately.
Now, to make a long thing short – what can you, a good person with a wish to learn how to trade and start trading for a living do? Well, first if you plan to open a 0.1 lots trade, cut it in half(at least). I know people hate such advice but
trust me when I say, the goal in this game is to last as long as possible and lose smaller than needed. The best advice you can get is to always be sure to lose less than you have planned to lose in the first place. Why? This is how you preserve your hard-earned capital and how you get to live another day in this business.
And that’s all it takes you to become successful, live another day.
I plan to write a series of articles on how you can get an advantage over other traders and how you can beat 90% of them, just by doing the work needed.