Forex Trading - Brokers = Enemy
By Nathan Pennington
I don't mean to scare you or anything, but beside yourself, your broker is your next worst enemy. If you don't prove to be your own undoing, your broker will certainly try.
Of course there are ways to foible their attempts. I will show them to you. But first . . .
Most forex traders blow their accounts. Brokers know this, so some (probably more than we'd like to admit) actually trade against their clients. They figure that if most traders are losers, they will trade exactly the opposite of their clients, and over the long run, they will come out winners.
You have to admit, that's a pretty clever idea. The only problem is it means they aren't going to do anything to help you succeed.
The other thing brokers may do (who are trading against their clients, or at least against some of them) is cause "phony" spikes in the price to knock out stop-loss orders.
Again, brokers know that most of their clients are very under-funded. They know that most traders have their stops very close to the current price action. (After all, they can see all the orders.)
So they make the price spike and take out a mess of stops. Ouch!
So, brokers are playing games. What can you do about it? First things first, some brokers are more honest than others are. If you are winning more than losing, and you notice that your broker is slowing your execution way down, then it's time to get a new broker. Apparently, your current broker doesn't like a winning trader and is manually approving every order you make.
But what of stop hunting? This one is so easy to fix, it's almost laughable. Don't put your stops in easy to reach spots. Back your stops off (also increase your profit targets). Make it hard to reach.
Then if your stop is hit, you know that it was really the market, and not your capricious broker.
Do you want to learn more about how I trade? I have just completed my brand new guide, "Forex Trading - What Finally Worked For Me".
Download it free here: Forex Trading
Nathan Pennington is a forex trader and the author of Winning Forex Trading -THE Definitive Guide
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