What Forex Brokers Never Want You to Know!

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What Forex Brokers Never Want You to Know!
In financial markets there are a lot of different brokerages with very different
approaches to working with their clients. Some brokers offer low trading costs and
other brokers offer a little bit higher trading costs. Some brokers are direct market
makers – and are on the opposite side for all your trades - and they directly profit
from your losses, and other brokers directly send your trades to the interbank
market for execution.
Some brokers consider their business and their clients only in the short-term, and
prioritize quantity over quality. On the other hand, other brokers build long-term
partnerships with as many profitable traders as possible. It involves lower shortterm
profits and slightly fewer clients globally, but it is the best environment for retail
traders to succeed.
In most cases, traders in financial markets think that their trading is the most
important factor of their success - a trading strategy, a money management system,
and psychology. However, they completely forget that it is the choice of their broker
that decides if they will be able to make a profit or even be allowed to withdraw their
profits. Simply stated - you can have the best and the most successful trading
strategy in the world, but if you trade with a bad broker, the trading strategy will still
not bring profits.
About FX Trading Revolution team
Our team is called FX Trading Revolution, we are algorithmic traders, we profit
directly from financial markets, we are not Introducing Brokers - you will never find
any Introducing Broker or affiliate hyperlinks directing you to other websites. Also,
we will never place an advertisement on our FX Trading Revolution websites. Our
only interest is providing verified information and experience from real trading.
Our team, FX Trading Revolution, has tested hundreds of retail brokers all
over the world on real accounts. Unfair brokerage companies do not want
you to find out insider information, or the truth about how exactly financial
markets work, and principles about how retail brokerage companies work and
how they make their biggest profits.
Professional trader needs without any compromises for his profitable trading direct
interbank market execution, respectively a broker which will provide without any
conflicts of interest an interbank market execution of every single trade. More and
more, professional traders are realizing that they need STP / ECN trading accounts
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to be successful. In response, the vast majority of brokers are offering STP / ECN
trading accounts. However do not get confused by the marketing of similar brokers.
Practically every trade on STP / ECN accounts by a poor broker is sent to only one
market maker for an execution - clients of the poor broker have a major conflict of
interest with the poor broker, and his the only one market maker usually owned by
the broker. This is insider information, and is how Forex brokers currently work to
make the utmost profit from their clients, which 98% of retail traders do not know. In
the picture below, you can see that our trades are not executed at true interbank
market.
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Insider information: How 98% of retail brokers make their biggest profits!
A broker which provides true and direct interbank market access, where all
transactions of his clients are executed, connects his MetaTrader 4 trading platform
with a bridge to get liquidity to the MetaTrader 4 from an interbank market platform
and liquidity providers.
Some brokers even offer interbank market platforms for their clients. However,
similar solutions are typically usable only to hedge funds and big financial
institutions. So only these technologies will ensure that you will not have conflicts of
interest with a poor broker or his market maker, and that your trades will be
executed at the best prices on the interbank market.
Based on the facts stated above, it is probably clear that there are huge differences
between brokers. A vast majority of traders think that their trading strategy is losing
because of market changes and that it is simply not profitable anymore. But the fact
is that a lot of traders are losing money, or they are making lower profits than they
could be because of a poor and unfair broker.
A principle of market makers is really simple - if you make a profit, a market maker
loses the same amount of money (thatʼs why trading is sometimes called a zero
sum game). Thatʼs the reason why if your trades are executed with the only one
market maker, it will never turn out well for you. And if a trader makes some profit
with a poor broker, the market maker uses dirty practices which are not obvious at
first - the market maker will hunt his Stop-Losses, expand spreads in the time of
trades execution, freeze his trading platform for a while, and so on.
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So if a trader would like to be profitable or to achieve better trading results, he
needs a direct interbank market access through his brokerage, as liquidity providers
will compete and provide the best prices for his trades there. The main problem is
not that trading is a zero-sum game, as a lot of people think, the main reason why
traders lose money are conflicts of interest with market makers. If your trades will
be executed without any conflicts of interest, it will open a new opportunity for you
to earn big profits from trading financial markets.
Extremely important costs that are not well known - slippage
A vast majority of traders also think that the only cost which they pay to their broker
is a spread or commission. The fact is that a spread or commission is only a small
fraction of the whole costs of every single trade. Every single trade also includes a
cost, which brokers mark as execution costs or “slippage”.
Slippage is the difference between the expected price of a trade, and the price the
trade actually executes at. Keep in a mind that this difference highly influences a
profit / loss from your trades and that the slippage is usually a subject of both your
market entries and exits.
The slippage at solid and fair brokers depends on the current market liquidity and a
volume which you would like to execute. Unfair and poor brokers are artificially
increasing the slippage. Please do not get confused - we are not saying that
brokers with enormous spreads / commission are the best choice, but now you can
see the reason why so many low cost brokers can work nowadays.
Enough theoretical talk - real trading tests
Enough theoretical talk – letʼs take a look at the most interesting results which we
chose from hundreds of brokersʼ tests on real trading accounts. We traded with
same automated trading strategy, so we had the same execution times. But take a
look for yourself at the different results we had on our 10 trades!
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FXpro (www.fxpro.com)
FXCM (www.fxcm.com)
FXOpen (www.fxopen.com)
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Oanda (www.oanda.com)
Axiory Europe (www.axiory.eu)
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Notice that some brokers hunted our Stop-Losses - at some brokers we noticed
more losing trades and at some brokers there were less losing trades. Also notice
that only after 10 trades, there was as much as a 385% difference between the
broker with the best results and the broker with the worst results.
As you can see - differences between brokers are enormous, and the right broker is
the key for successful trading in financial markets!
Team FX Trading Revolution
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