What happens when you start to earn big time?

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leonyde
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What happens when you start to earn big time?

Postby leonyde » Sat Mar 06, 2010 2:08 pm

Let's say you have a killer strategy and make a steady 100% a year. In theory you could make 10 millions in 10 years, starting from 10k.

Will - at some point - your broker start to scrutinize your trades, and possibly cheat on you?

I think nobody care when you are playing with small money, but what happens when your account grows, and your lot size increases?


In simple words: when do they start to care about you?

- Is there some kind of threshold you would be better not crossing?

- Is there some things to avoid to stay under the radar?


If there is anybody here who has worked for a broker, or know anything on the subject - maybe who has faced a similar issue - I would really appreciate your input.

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Postby adaseb » Sat Mar 06, 2010 3:03 pm

There are people who makes millions of dollars are year trading.

There are certain brokers out there mostly dealing desks like Oanda that don't hedge their position and when you get stopped out, Oanda takes the full profit.

Brokers do this because they know that in the long run 95% of all their traders will lose money. They play off statistics.

However to you and me this should make no difference (unless your a crazy scalper) because do you really care if the broker takes your money or the market? Either way its out of your pocket.

If you worry about this there are many ECN brokers out there. However worry about this later. Right now try to get your account up to $20K from $10K in a year.

Dealing desk brokers are great when you are starting out.

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Postby frang0nve » Sun Mar 07, 2010 1:38 pm

adaseb wrote:There are certain brokers out there mostly dealing desks like Oanda that don't hedge their position and when you get stopped out, Oanda takes the full profit.


Hello,

Here you can read Michael Stumm (founder of Oanda) statement about Oanda hedging policy:

Oanda hedging

EXTRACT:
"I'm sorry, but I would have to deny it. OANDA does hedge its clients' positions and in doing so does not differentiate between professionals and beginner retail clients. Now, obviously, we do not hedge a $5 trade, but as soon as OANDA's exposure reaches a certain threshold (typically 100,000) OANDA hedges that exposure. I fully understand that many (most?) forex brokers do bet against some of their clients, but I can assure you OANDA does not do this.

Moreover, when OANDA hedges, it always does so with a major bank and not with any firm associated with OANDA."



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Francisco

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adaseb
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Postby adaseb » Mon Mar 08, 2010 12:40 am

Yes they say that they hedge but if you ask them they also state that they might NOT always hedge. Go ask in live chat.

I am pretty sure if they have a loser that hasn't made any money trading Forex in 3 years, they are pretty confident not hedging his positions.

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Postby leonyde » Mon Mar 08, 2010 4:43 am

adaseb wrote:However to you and me this should make no difference (unless your a crazy scalper) because do you really care if the broker takes your money or the market? Either way its out of your pocket.

If you worry about this there are many ECN brokers out there. However worry about this later. Right now try to get your account up to $20K from $10K in a year.


That wasn't exactly my question. I specifically don't worry about THAT part.

Let me formulate again in some other terms:

- You are trading with a good ECN broker
- Your account size is between 100 to 500k
- You are regularly "winning" => 100% a year

Will your broker let you win and win forever?


That's a simple question... and an interesting one. People do talk a lot, but as you know 95% of them fail. But what about those who "succeed", are they going to face some new issues as their account is growing exponentially?

With 1 million in cash you can participate directly in the interbank market, but there is a long road before that - that's the object of my question.

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Postby Patch » Mon Mar 08, 2010 5:10 am

leonyde

First I would suggest take a breath, and most importantly of all, get the problem first, before you worry about it. We each have a ways to go to be in the million dollar USD trader category, and as our account grows, so will we in maturity and wisdom.

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Postby michal.kreslik » Mon Mar 08, 2010 11:55 pm

once you make a million dollars by trading forex, you'll face a totally different set of problems.

retail brokers are mostly crooks. what is being presented to public as a forex market by most retail brokers is rather a big casino where retail clients can lose money fast, preferably with ridiculously high leverages :)

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Postby noone22 » Tue Mar 09, 2010 6:17 am

michal.kreslik wrote:once you make a million dollars by trading forex, you'll face a totally different set of problems


Does it mean - that one shoudn't even dream about making a mil?!

Yeh, mafia, tax office, who else in the queue ...

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Postby adaseb » Tue Mar 09, 2010 7:16 am

I am pretty sure if you are the 5% that actually makes money trading Forex, brokers aren't going to bend over backwards to see you fail when there is the 95% crowd that makes them the most money.

Trust me there are plenty of losers out there that make brokers rich.

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Postby bredin » Tue Mar 09, 2010 10:10 am

A mentor told me a while ago: "lets face it, having no money is a real problem. Having money causes problems, too, and I know which problems I'd rather have"

So Do I...

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