Hi everybody!
Suppose one becomes extremely successfull trading currencies and lets say he becomes a millionaire
. How will the broker react? Will the trader come in the broker' s radar, and the broker start manipulating the trading platform against the trader. Will the trader be able to withdraw large amount of money?
Our loss is their gain so how can we trust them?
Interesting question.
With most (not all) retail platforms you will notice
s l o w e r less precise fills the higher up the notional value food chain you go. That is because retail brokers do not execute your position against the true Interbank market. Your question actually proves that when any retail forex brokers promises you that they are offering you true "interbank rates" that they are lying through their marketing and advertising materials.
Why? Because while they promise you that you are trading true interbank, at the very same time they
limit the size of a single trade to X number of lots. If your trade was being executed against the real interbank market, there would be no maximum limit place on a single trade sizes that resemble anything even remotely close to Lots.
To get around this, most of these retail brokers force you to break-up your position into multiple (independent) trade executions, each one no greater than their Max Size Limit Per Trade.
There is also a huge difference between being having an account balance of a million dollars and trading a cost basis of a million dollars. Maximum retail leverage in the U.S. is now 50/1, or a 2% Margin Account restriction. You could have a million dollars in your trading account (something I would NEVER suggest with ANY pure retail forex broker), but that does not mean that you using a million to make a trade. You could have a million account balance and only use a thousand to place a trade.
The key question is, what's the maximum notional value allowable under a specific retail platform. In most cases, long before you get to that value, you will start to notice considerable negative slippage, off-quote fills, partial fills and lagging fills.
It is best to get out of Retail Forex entirely after reaching the $300k total balance level. If you have traded your way up to $300k from a four or five digit universe, then you have earned the right to make the move to an institutional platform, or what is more appropriately called a "Commercial Account" with some intermediaries. Get as far away from the retail game as possible when you get near this level. There are some good Prime Broker accounts and platforms that can be had at this level without the legal hassles associated with trying to open an "institutional account" on an so-called "institutional platform."
Ask your broker what is their Max Size Per Trade Limit. With one bucket shop posing as an honest broker on this forum, their stated limit is roughly 21 million. In a 2% account (50/1) that's $420k margin used to make the trade. So, if all you have is $1mln in your account, then your cost basis in that trade would be roughly 50% CB using semi-round numbers.
Again, the point is that you will not even get close to 21 million notional on most retail bucket shop platforms without encountering serious resistance in various forms as mentioned above and you can see just how incredibly far away that number is as compared to 1 Yard, which is $1bln notional - something you won't see anyone doing on a bucket shop trading platform.
$300k is a good number to start thinking about jumping ship and going PB. You can have a million total balance inside a retail account, but who on earth would ever trust a bucket to that extent? You need a PB on a real institutional or commercial platform at those levels.
