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GOOD BROKERS VS BAD BROKERS for BITSTAMP:BTCUSD by Investroy

Good time of the day, TradingView community! The reason we decided to cover this topic are the alarming messages we’ve been receiving recently. “I am a representative for XXX, I’ll provide you with a white label brokerage, I instantly give you 50% of the loss of the customer who opened the account”. From the first glance, you can tell that there is something wrong ethically and legally. So how does one protect himself/herself and his/her capital from this danger. Simple answer: Education.

Scammy signal providers and fake mentors are much easier to identify. When it comes to brokers some might do a really good job covering up their true intent. Without further due, let’s get the broker guide started. Oh, well first of all, the word broker in this context is actually wrong to use. The so called “forex brokers” aren’t really brokers. In fact, even most of them don’t classify themselves as such. However, in order not to confuse you any further let’s keep it that way for this text.

We can break down all the forex brokers into Dealing Desk and No Dealing Desk. Dealing Desk can be classified as Market Makers and No Dealing Desk can be further broken down to “Straight-Through Processing” ( STP ) brokers, “Electronic Communication Network” and “Straight-Through Processing” (ECN/ STP ) brokers, “Direct Market Access” and “Straight-Through Processing” (DMA/ STP ) brokers.

To be honest, you don’t really need to know all that. Most you should know that there are 1) Good brokers looking for sustainable long-term collaboration 2) Bad brokers, not executing your trades and hoping for you to lose, so they can claim the collateral.

You may say: “Oh, Investroy, aren’t brokers waiting for us to lose anyway, so they can make profits? They automatically open a position equal and opposite to ours”. Well, that’s true. However, there is a big difference when it’s natural (there are more losing traders than winning ones) and when the broker is using mostly illegal ways to make you lose. This can be noticed when a broker has a discrepancy of more than 20 pips with the most trustworthy price outlets, suddenly increasing insanely large spreads and many other small tricks.

This all may want you think: “Oh, man, everybody wants to steal my money”. Not really, there are some honorable brokers out there with good reputation. Moreover, above in the chart we’re going to point out the main differentiations.

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