MP -- im really sorry, but i just cant agree !
please understand the market is much more than the trade RIGHT NOW.
if you will please study your charts, you will see that price moves in ONE DIRECTION in the morning, and ALTERS direction in the second part of the day, even if your market is closed.
a spread better makes their money mostly by knowing WHEN the market will reverse direction and then being in on that move, while the retail client starts selling when stops are hit or just out of fear --- assuming the original direction was up, the sb is now shorting against everyone, and the fear of the market is selling them shares cheaper and cheaper.
once the brokers, sb's and mms have covered their shorts (they all see the same charts after all), they REVERSE the price back up, now with their shelves LOADED with cheap shares that they then sell into the rally they create at the moment.
while the concept of how they trade against you is spoken of always, LET US EXAMINE IT !
if you buy (go long) a position, you bet that the price will move UP enough to clear the spread and make profit for you, which is what should happen ! Can you think of ONE reason why they would take an opposite trade against yours IF THE PRICE IS ACTUALLY GOING UP ????? What you are "buying" from them is an "imaginary" bunch of shares they take out of their "pool" of shares (or whoever THEY go to for shares !)
it would be dumb, and any experienced trader can see where support and resistance lay, as does the sb, broker or mm !
therefore, the broker MUST wait till the price reverses (and while they can "fiddle" with the price a bit, the BANKS are really in charge and your sb MUST, by law, move with those prices !!!
SO THEY WAIT TILL THE PRICE REVERSES and then what i posted at the top happens --- THIS is how they make their money, not by matching your every single trade.
OTHER things said about sb's are true, be it "slippage" between the price you wish to sell at and the price they allow you to sell at, "delayed" entries and exits and a bunch of other "little" tricks to place the playing field in their favor.
BUT the one absolute about the market is how its manipulated to enable profits --- with that done, there is ABSOLUTELY no need to match your trades !
below is a post i made on the subject a while back -- may explain better
there are a few purposes behind these reversals, but mostly by stopping and reversing price the mm's get MORE shares at a lesser price to continue a bullish runup AND/OR they make money against your long by now shorting, where most people will now sell and they buy more shares at a lower price to short on the way down as people bail their long positions. Of course, reverse this for a market thats moving down !
Now at the bottom, because of averaging down, they own MANY shares at a lower price and now they run the price back up, taking profit on the long side with their cheaper shares !
Lets say they run a currency up to 1.9000, at which point they reverse down to 1.8000 ---- almost everyone except long term holders will bail their positions (its SO human nature) to take profit, as they sell at a steadily decreasing price OR THEIR STOP LOSSES ARE HIT !
DO YOU SEE SOMETHING IN THAT LAST STATEMENT ???
Now the price is down to 1.8000, the mm's now cover by buying all these shares but at a 1000 pip advantage to where the currency was 15 mins ago, and UP THEY GO AGAIN, with lots more shares to sell the retail trade, but they got em CHEAP !!
Its often called a "headfake" because they fake you into thinking the price will now go down forever, scaring you into selling or forcing your stop losses --- Its HOW the rookies loose money and the mm's do it with glee !
PRO traders are the BEST daytraders in the business and are well rewarded for being so --- their job is to MAKE money for the company they work for and not care much about how they do it !
Trading, at least to this person, is KNOWING what theyre doing more than simply knowing when to enter and when to exit ! Theres a lot of pros out there, and they dont give a rats rump about any of us --- rather they really dont like us at all, but will quickly grab our money !
of course, when trading with no sl, one better know the trend and NOT trade against it !
mp
