For all the replies that blame the broker, I think this is highly misguided. I understand the issues when dealing with a business that matches the orders internally, and the fragmented nature of forex trading makes this all possible, but I am certain that if these same traders who are losing money were able to switch instruments to something that goes to an exchange, where there are more established rules, it wouldn't change the outcome of the distribution of winners and losers.
Yes there are times where the "bucket shop" seems to steal your money, but a profitable trader very quickly learns how the game is played. If trading Forex, you can't have tight stops that will be picked off, simple as that. Its not like these bucket shops that internalize orders can move the market so drastically in one direction while other quotes from other institutions are way off.
My point is that if you look at why traders that trade Forex lose money, it more than likely has nothing to do with the broker, but everything to do with the trader, their method, their psychology. People with $1000 accounts of less clearly cannot trade futures (for the most part), so they have to go gamble elsewhere. If you take a losing Forex trader and you give him more capital and have him trade something on the CME, he will still be a losing trader. And if you take a profitable trader who trades futures, and force him to trade Forex at a bucket shop, he will more than likely very quickly learn the necessary risk parameters for said instrument and adjust his strategy accordingly. He might see that its not the best instrument to trade given the allowances he has to make, but his knowledge will translate to the Forex market. The losing trader doesn't have the knowledge and experience, and this is why he is losing, not because of his broker.
Yes there are times where the "bucket shop" seems to steal your money, but a profitable trader very quickly learns how the game is played. If trading Forex, you can't have tight stops that will be picked off, simple as that. Its not like these bucket shops that internalize orders can move the market so drastically in one direction while other quotes from other institutions are way off.
My point is that if you look at why traders that trade Forex lose money, it more than likely has nothing to do with the broker, but everything to do with the trader, their method, their psychology. People with $1000 accounts of less clearly cannot trade futures (for the most part), so they have to go gamble elsewhere. If you take a losing Forex trader and you give him more capital and have him trade something on the CME, he will still be a losing trader. And if you take a profitable trader who trades futures, and force him to trade Forex at a bucket shop, he will more than likely very quickly learn the necessary risk parameters for said instrument and adjust his strategy accordingly. He might see that its not the best instrument to trade given the allowances he has to make, but his knowledge will translate to the Forex market. The losing trader doesn't have the knowledge and experience, and this is why he is losing, not because of his broker.
