Comments on: how do retail forex dealers make money if you turn out to be a successful trader? http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader Answers to all your Forex questions. Thu, 29 Jul 2010 21:10:34 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Brightstone http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader/comment-page-1#comment-2618 Brightstone Wed, 10 Feb 2010 18:59:58 +0000 http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader#comment-2618 Two type of dealers: NDD or STP which do not trade, only clear your trades for a few pips charge. Non NDD or TRading desk lines have sometimes a 2 15 second lag, depending where they are routing their information. They can clear positions in house based on this lag or Re quote for a better position. NDD or STP trading lines are the best way to keep your best position with out the house playing against you. I leave dealing desks alone because of the requote. Large banks are the best for NDD. Two type of dealers:

NDD or STP which do not trade, only clear your trades for a few pips charge.

Non NDD or TRading desk lines have sometimes a 2 15 second lag, depending where they are routing their information. They can clear positions in house based on this lag or Re quote for a better position.

NDD or STP trading lines are the best way to keep your best position with out the house playing against you.

I leave dealing desks alone because of the requote. Large banks are the best for NDD.

]]> By: Jason Rogers http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader/comment-page-1#comment-2617 Jason Rogers Tue, 09 Feb 2010 22:23:30 +0000 http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader#comment-2617 In order for a dealer to make the spread on a trade, the dealer has to match up a buyer and seller at the exact same time for the same amount. This doesn't occur very often. Therefore there are two other ways the dealer will operate. 1. Take the other side of the order. If a trader consistently loses money, it will be advantageous to take the other side of the trade,. 2. Wait seconds or minutes to offset the trade at a better price. For example, you buy EUR/USD at the price 1.4350 and the dealer waits seconds or minutes to hedge the position at a lower price. This works because many traders are range traders so they are naturally fading the market momentum. This works for range traders where the market is moving against you and the dealer can get in at a better price. But what happens if you are a trend trader. It takes at least a couple of seconds for the dealer to react to begin with. So if you go with the trend, chances are good in an active trading period that you could recover the spread in a very short period (maybe a second or two). If you do, then the dealer has lost out on the spread. This is why you will receive a requote from a dealer if you're trading with the momentum of the market and the position becomes profitable. This is the problem with trading through a dealing desk broker. No Dealing Desk (NDD or STP) brokers do not have this problem since the trade is offset immediately at whatever price the bank is offering, and a portion of the spread or a commission is paid to the broker as their fee. In order for a dealer to make the spread on a trade, the dealer has to match up a buyer and seller at the exact same time for the same amount. This doesn’t occur very often.

Therefore there are two other ways the dealer will operate.

1. Take the other side of the order. If a trader consistently loses money, it will be advantageous to take the other side of the trade,.

2. Wait seconds or minutes to offset the trade at a better price. For example, you buy EUR/USD at the price 1.4350 and the dealer waits seconds or minutes to hedge the position at a lower price. This works because many traders are range traders so they are naturally fading the market momentum.

This works for range traders where the market is moving against you and the dealer can get in at a better price. But what happens if you are a trend trader. It takes at least a couple of seconds for the dealer to react to begin with. So if you go with the trend, chances are good in an active trading period that you could recover the spread in a very short period (maybe a second or two). If you do, then the dealer has lost out on the spread. This is why you will receive a requote from a dealer if you’re trading with the momentum of the market and the position becomes profitable. This is the problem with trading through a dealing desk broker.

No Dealing Desk (NDD or STP) brokers do not have this problem since the trade is offset immediately at whatever price the bank is offering, and a portion of the spread or a commission is paid to the broker as their fee.

]]> By: Floyd http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader/comment-page-1#comment-2616 Floyd Mon, 08 Feb 2010 00:05:44 +0000 http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader#comment-2616 Ye they do earn from spreads Ye they do earn from spreads

]]> By: The Geek http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader/comment-page-1#comment-2615 The Geek Sun, 07 Feb 2010 05:34:13 +0000 http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader#comment-2615 Hi there, yes as many mentioned here, they do earn from the spreads. Do note that there are also brokers with "no dealing desk" which means they do not take positions against you, but rather route your orders out to the interbank markets. This way, their risk are minimized and they earn from the spread. Spread is the difference between your bid and ask price. If you want to read more on basic forex, my blog has articles for newbies. trade safe ! Hi there,

yes as many mentioned here, they do earn from the spreads.

Do note that there are also brokers with “no dealing desk” which means they do not take positions against you, but rather route your orders out to the interbank markets.

This way, their risk are minimized and they earn from the spread.

Spread is the difference between your bid and ask price.

If you want to read more on basic forex, my blog has articles for newbies.

trade safe !

]]> By: raysor http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader/comment-page-1#comment-2614 raysor Sat, 06 Feb 2010 16:20:30 +0000 http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader#comment-2614 They make the spread. So the more successful you are, the more you will trade and the more money they will make. Don't forget there is a massive amount of Forex traded each day, your trades are a drop in the ocean. They make the spread. So the more successful you are, the more you will trade and the more money they will make. Don’t forget there is a massive amount of Forex traded each day, your trades are a drop in the ocean.

]]> By: imya http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader/comment-page-1#comment-2613 imya Thu, 04 Feb 2010 16:27:19 +0000 http://forexquestions.org/forex/how-do-retail-forex-dealers-make-money-if-you-turn-out-to-be-a-successful-trader#comment-2613 Forex Brokers are never lose. They have got their money from your spread. Even unregulated brokers always make money from traders. As you know there are bigger losers than winning traders. To choose a good broker, visit: Forex Brokers are never lose. They have got their money from your spread. Even unregulated brokers always make money from traders. As you know there are bigger losers than winning traders. To choose a good broker, visit:

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