So how trusty is your broker?

[Pabmove]

After finding out that markets aren't all that random at all and mostly controlled by market makers, I'm wary of my forex broker (a big one with tv ads) .

When I opened an account, I didn't place any trades for a several weeks due to my work commitments. But when I started playing, sales staff from my brokerage call and ask me sign up to this and that....

Are brokerages mostly like this? I certainly don't like my activity to be monitored but since they can see my stops, there is the possiblilty that they can stop you out at any time just to make some dough from the regular Joe trader (there are some trades of mine that got stopped which are a bit suspect).

 

[david.winford]

Hi Pabmove

because the market is competitive, they usually not a large enough difference in prices and spreads between different brokers to practice arbitrage. But every forex broker is slightly different,but u can choose your broker by certain Points

1- Is the Forex broker regulated?

2-Customer Service

3-Margin Requirement

4-Withdrowal and deposit time
i hope that i helped you

good luck

 

[Pabmove]

Thanks David,

They say they are regulated but I not sure high tightly. Customer service is ok and I've just withdrew from them so I can give you answer later on.

I did a test on my mini account. I placed five trades, I placed stops on all of them and low and behold, I did get stopped out on four of them (quite a lot of spikes). I placed another 5 trades, this time I place mental stops. Not one of those trades got stopped out (less spikes). To me this was an alarm bell and not just coincidence.

I closed the account, I didn't feel comfortable about them in the end. I had an uncomfortable feeling about them watching my account. My opinion.

I'm going to stick to ECN brokers from now on. I'm not experienced with how they operate (ECN) but at least I feel better that there may be a more level playing field.

 

[scrosbie]

I share your concerns Pabmove. I don't think that the brokers are monitoring individuals but they know where the stops are likely to be clustered in any particular market and in my opinion go stop hunting. I am aware of occassions when brokers have returned funds to traders who have complained after freak spikes.

 

[msekandari]

I've been using Interbank FX and FX CM and have been seeing some shady things.
I check both charts and rates everytime I trade and they are different.
On one trade where I got stopped out Interbank FX showed a bull candle following a bear candle and didn't see anything like that on FXCM's chart's and the range was off by at least 5 pips.
FXCM also initiated a trade I had entered at 1.4655 at 1.4650 when the price never even went close to 1.4655.
I'm completely done with U.S. based forex dealers.

Western europe or England has dealers that are more monitored and regulated, so I've read.

Does anyone know any good Western European dealers?

 

[scrosbie]

The only answer to the problem is to avoid entering stop orders or stop losses in the trading platform. It is of course important to have them, but keep them on paper and trigger them manually. Trading on close of day pricing is also more consistant. Of course this is no use is you are a very short term trader and you can not sit in front of your screen all day.

Its not just about where the broker is located, the very nature of the brokers business model means that they have a conflict of interest with you the trader. OANDO claim to be taking a more ethical approach and you can read about this on their platform. You may also want to look at Deutsch Banks services, www.dbfx.com .

 

[Pabmove]

Hi, sorry about the late reply.

A little wiser than my previous post. I don't know if I can post other sites links but check out this link which is fascinating:

Talking Forex - Forex 4 Noobs Forums

>scrosbie

I've just signed up to dbfx. Hopefully they are alright but they are still MM so keeping an open mind.