Well, it is not necessary to mention that there are thousands of traders who get into troubles with their brokers and get very disappointed with Forex trading as a whole. According to our researches most of such traders are newbies who don’t know how to choose a good Forex broker and identify good currency trading platforms.
The highest number of pitfalls for the Forex traders comes with the market maker brokers. In this article we will describe the most common troubles that traders may encounter when trading with the market maker brokers.
Fake market movements.
Sometimes when trading with a market maker broker you may have a sudden movement of a price that closes your trading position by the stop loss and after few seconds the price comes back to its original rate. Every Forex trader knows how frustrating it may be. The thing is that when it happened to me I checked the charts of another brokers and Forex trading platforms and to my astonishment other brokers’ charts didn’t display the sharp market movement that closed my trade by the stop loss.
This is another serious problem that you may expect when trading with a market maker broker. It happens from time to time when you set up the price to buy GBP at 1.4400 rate on your trading platform and the broker opens it for you at 1.4410. Here you have a slippage of 10 pips. When it is on the opening of a trading position you cannot know if it is for your benefit or not, but sometimes the slippage happens on the closing of a trading position. In this case you can end up with tens of pips missing as your profit.
Market opening and closing rates.
Sometimes when opening a long time position our online trading software allows us to leave it for a weekend. Thus when the market closes your trading position freezes and when the Forex market opens your position continues. What I have noticed when trading with one of the market maker brokers is that there is always a big gap between the market closing rate and the market opening rate that sometimes may cause you big losses on the opening of the Forex market on Monday or more than that your position may immediately reach the stop loss.
Is the Broker The Main Reason Of Your Losses?
Today many new people consider Forex trading as an alternative to their traditional job. Perhaps, this can really work for a few lucky beginners, but unfortunately many online traders lose money and face financial difficulties when joining currency trading platforms and start trading for real money. The awareness when to enter and when to go out of the market is very important for your trading strategy. You can find a lot of approaches and methods talking about when to enter and exit your trade. Many traders think that the best way to trade is to close quickly the losing positions and leave profit positions for further increase. This is a general rule that can be applied to the trading business as a whole but not in every trading situation.
If you lose money all the time and your initial investment regularly decreases it may be a sign that Forex trading is not for you. Forex trading success is not necessarily related to how smart you are, how educated you are and how much time you devote to Forex trading. Like any other important decision, don’t be in a hurry to give up on Forex trading. If you give up too early, perhaps you will loose a chance to achieve mastery in Forex trading. In addition, it will leave you a sense of a looser about yourself. Even though online trading may seem very simple there are some rules which must be noted and lessons to be learned.
Many people who do not have big funds open trading accounts with some currency trading platforms using not big sums of money. They have an idea of what online trading is, but they do not have much knowledge and experience in the industry. A big portion of such traders, unfortunately, lose their money very quickly. The most part of newbie traders start Forex trading without planning, organization, knowledge and experience. Therefore in order to avoid painful situations for yourself and your relatives we recommend every new trader to take a responsibility for his or her Forex trading. Learn, practice and try different trading approaches and trading platforms that will help you gain skills and understanding of the market and lead you to the successful Forex trading.