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You need to understand that forex brokers are above all marketing machines. Forex brokers continuously require a flow of new clients, since many retail forex traders dont survive longer than a few months. After losing, more than 90% simply quit and give up forex trading.
For enticing new clients, vast sums of money are spent on advertising by forex brokers. You can check this fact by going on Google and typing any forex related keyword. Almost all the ads will be by forex brokers. Each click costs them around $1.
Forex brokers want you to trade more. They use many methods as incentives to make you do that. One of the methods is to hold a Forex Trading Contest by announcing cash prizes of $2000, $1000 and $500 for the top three.
Most of the traders get wiped out trying to win the contest. This trick is almost like a lottery. Only a few win, rest loses! But in the end its your forex broker who makes the most money.
There is no check on the forex brokers. They can quote any rate to you. Forex brokers do this by adding 2 3 or even more pips to the interbank market pip spread
Now you must know how forex brokers make so much money and are even willing to spend so much on advertising. These 3 or 4 pips are risk free profits for the forex brokers.
Price shading is one of the practices used by forex brokers. If the price of a particular currency is rising, the broker may shade the price quote by adding a few pips in anticipation of the rise in currency rate. You wont even know it.
One of the best tricks that forex brokers use is Stop Loss Tripping. If they find many stop losses at a particular level, there will be a momentary blip in the price feed to take out most of the stop losses.
Naturally you cant complain. It was a momentary blip not enough to trade but enough to trip most of the stop orders.
If you complain, your broker can say there was a sudden large transaction in the interbank market or his feed is faster and reflects the interbank rates better.
For enticing new clients, vast sums of money are spent on advertising by forex brokers. You can check this fact by going on Google and typing any forex related keyword. Almost all the ads will be by forex brokers. Each click costs them around $1.
Forex brokers want you to trade more. They use many methods as incentives to make you do that. One of the methods is to hold a Forex Trading Contest by announcing cash prizes of $2000, $1000 and $500 for the top three.
Most of the traders get wiped out trying to win the contest. This trick is almost like a lottery. Only a few win, rest loses! But in the end its your forex broker who makes the most money.
There is no check on the forex brokers. They can quote any rate to you. Forex brokers do this by adding 2 3 or even more pips to the interbank market pip spread
Now you must know how forex brokers make so much money and are even willing to spend so much on advertising. These 3 or 4 pips are risk free profits for the forex brokers.
Price shading is one of the practices used by forex brokers. If the price of a particular currency is rising, the broker may shade the price quote by adding a few pips in anticipation of the rise in currency rate. You wont even know it.
One of the best tricks that forex brokers use is Stop Loss Tripping. If they find many stop losses at a particular level, there will be a momentary blip in the price feed to take out most of the stop losses.
Naturally you cant complain. It was a momentary blip not enough to trade but enough to trip most of the stop orders.
If you complain, your broker can say there was a sudden large transaction in the interbank market or his feed is faster and reflects the interbank rates better.
About the Author:
Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in online trading; stock and forex trading. Discover a revolutionary new broker buster Forex Robot. Read about Semi Automatic Forex Engine.
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