The problem is not so much that someone may be making a decision to take the other side of your trade vs lay it off in the market, that is what banks normally do, the problem is that you are trading against someone who knows your position, how much buying power you have in your account and makes his own prices.
FYI the bet is that the customer will eventually lose [expediated by leverage] because "..............one of two things will happen when a customer opens an account, he will either lose in which case we keep the money, or he will win until he loses, in which case we keep the money" [novice winners increase their size too quickly and too much for the acount equity].
The worst possible customer for a bucketshop is someone who trades too small to cover in the interbank, wins, and withdraws his winnings. If they are not covering the business then they have to find the money to pay the winnings (probably from the account equity). You may want to give some thought as to what they might be doing with your "margin deposit" if they are not actually making trades with a counterparty.
If the FX broker is not covering your business on paper he will have huge P&L swings, probably way beyond that which would be tolerated by an exchange which is probably one of the reasons why you never see listed retail FX brokers.
I have FX accounts with Hotspot and IB and personally would never consider the other models. Trading is hard enough without your counterparty having that kind of advantage. It is not unheard of for Major banks to find ways not to quote you if they see the trade as a sure loser for themselves, they are in business to make money for themselves.
