Is it possible that brokers trade against clients?

It is the most often asked question by beginning traders. The survey states that 60% of new traders want to know if it is feasible for their broker to act against them when they first start out. It is a sad fact of life that some brokers are biased against their clients. Here’s more information on whether brokers operate against their clients and how this might affect your trading.

Two broker categories

It is possible that your broker will work against you which is not a cheating nor a secret. Most of the trader doesn’t know that their broker brokers are working against them. The working process of one broker is different from the other broker. Which means that one broker can operate differently to the other broker.

There are two types of such broker. First is A Book broker and other is B book broker. Traders while making an account agree with some terms and conditions without reading it. Then the broker can work against traders. If the trader knows risk management then trader is working against the broker.

1) A Book brokers

Despite the fact that they are continually working against the client, the A book broker is doing so in a technological manner. To put it another way, brokers are constantly working against the trader. The purpose of a broker in this situation is to balance him as quickly as is reasonably practicable. They are, in fact, employing a risk-neutral strategy. These  are brokers with no deposit bonus.

Successful traders for such a broker are those who understand how to control risk. The broker does not wish to compete with the profitable traders.

2) B Book Brokers

Positions offered by this sort of broker are not often successful in the long run. Their objective is to provide a counterbalance to the trader. In other words, the broker works against the trader by opening a position that will not result in a profit for the trader to take.

According to a recent research, more than 75% of traders experience losses while dealing with such a broker. However, it is very clear that the broker is not a con artist.

Ways through which broker’s trade against you

There are several ways in which a broker might operate against a trader’s interests. The following are some examples:

Stop Loss Hunting

 Slippage

Requiting

Leverage

markup

Conclusion

The traders should keep in mind that broker tends to work agains you. But traders should use some strategies to overcome this problem. The traders face many weird things in their trading career. But traders should update their skills and look for any new information and keep then update. Positions offered by this sort of broker are not often successful in the long run. Their objective is to provide a counterbalance

Internet will provide you all type of information whether you are searching about a specific broker, currency pairs or how currency change in the markey. Traders need to keep an eye on every type of information. So they did not give any chance to broker to work against you.