Is your Broker really the problem?

August 17, 2014 by  
Filed under Forex Advice, Forex Articles, Forex Tips

Is your broker really the problem?

I’m sure many traders out there have accused their broker of swindling them from their hard earned cash at one point or another. I know I have on many occasion. I have had the privilege to work with some of the world’s largest forex providers, and now that I have been on both sides of the fence I have a very different opinion. Firstly, they’re not in the business of ripping people off. This is just a fallacy. I completely understand why people may think this, as I know there have been times when I’m in a trade and for the life of me can’t work out why the market automatically defaults to going against me. While this does happen all too often, it really is not the provider doing this. Think about this for a moment; why would a provider try to manipulate the market for one or two clients? Unless you are trading with many millions of dollars, it would be pointless for a provider to do this. How could they provide multiple prices for their clients?

Another one I used to hear clients mention is; How come provider ‘x’ has different prices than you? Here in lies some of the issues with trading the forex markets. Unfortunately, as there is no fixed exchange to trade through, the liquidity providers that various forex providers use may differ. In essence what this does is create a market that looks similar, but could be multiple pips in difference to the next.

I started questioning myself after I had a few losses with a particular provider. I actually assumed that due to their spreads being somewhat wider, then perhaps that was my issue. Needless to say I changed brokers. The same thing happened at my next provider, and so forth until I eventually decided to take ownership of it. It was when I decided to take full responsibility for all my results that things started to change. Of course there will always be times when a provider is at fault, or the market does something unexpected, and closes you out at the wrong price. What I am alluding to is that when you take responsibility for your actions, you can start to realise that it’s not ‘me Vs them’ anymore, but quite simply ‘me Vs me’ in trading. Taking responsibility is the first step. I have now traded with some brokers that have extremely wide spreads, and still made money; conversely, I have traded with some others with tight spreads and not done so well. In essence, every provider has both their good and bad points, and at the end of the day it is a matter of you finding what works for you. When you take on the mindset that you could potentially lose, or no matter what happens with your provider, you could potentially win, then it changes your frame of mind. You are more emotionally in control as you are not expecting anything other than you trade to be executed. When you adhere to good risk management, understand that it is you, and not your provider that is responsible for your results, then you can start to create positive outcomes in your trading.