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Author Topic: can someone answer my question?  (Read 4331 times)

Offline cheesenegg

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can someone answer my question?
« on: May 28, 2009, 08:45:13 AM »
HI all

i have  aquestion that ive asked several times on the fapturbo site and never got an answer so if someone here can enlighten me id really appreciate it!

I constantly read posts saying 'brokers dont like scalpers' and 'brokers will not allow people to trade with trades lasting only a few seconds'  -   i just dont understand why?  as far as i can see, they get their trades from the spreads eacha nd every time there is a trade taking place - if this is true then brokers should love scalpers as the shorter the trade time the higher the volume of trades and therefore the more money they make,

what am i missing??????  please someone let enlighten me!

In the mean time, good look trading all

Mal

Offline ferran586

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Re: can someone answer my question?
« Reply #1 on: May 28, 2009, 02:20:12 PM »
I do not know why they do not like scalpers but it is not the FAPT type scalpers they don't like. I can't remember where but I heard they don't like scalping where each trade last less then 90 seconds.  Since FAPT (usually) holds longer than this, it is not FAPT that they don't like.

Offline cheesenegg

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Re: can someone answer my question?
« Reply #2 on: May 28, 2009, 02:51:43 PM »
Thanks for the response - i did not know this, if anyone can shed some further light as to why scalpers aren't liked - or if in fact what i have heard is not true that would be great

Good luck trading all

Mal

Offline ordiehl

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Re: can someone answer my question?
« Reply #3 on: May 29, 2009, 12:51:24 AM »
Brokers don't like losing money.  If they have a dealing desk then your gain is their loss.  It really doesn't matter whether its scalping or whatever.  If there is enough volume depleting their profits, something has to be done.  As much as I hate to admit it, I would call that good business.

Offline chk56

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Re: can someone answer my question?
« Reply #4 on: May 30, 2009, 08:07:43 PM »
Hi ordiehl

That's what I don't understand. How works that dealing desk thing? - I mean, why do dealing desk brokers loose when we win? Excuse me if the question sounds stupid but I'm really totally new to all this.

Christoph

Offline donnaforex

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Re: can someone answer my question?
« Reply #5 on: May 30, 2009, 10:09:21 PM »
There are quite a few reasons why brokers don't like scalpers:-

1. They bombard their servers with huge numbers of trades (some systems, not fapturbo tho).
2. The broker is unable to hedge their positions directly to market quick enough. If they put measures in place to fully hedge the positions then this introduces a delay in fill time and increased slippage (we are seeing this a lot with fapturbo- brokers are beginning to make sure they hedge every trade since they know it makes money and they cannot afford to take on that risk). Since scalping requires very accurate entries this leads to the customer complaining. They have to add lots of extra support- they have unhappy customers and it costs them more money too.

Brokers do make money from the spread, but depending on the brokers business model, they may also make money from losing traders. What is certain is that with most brokers they only take an aggregate view of their positions, they don't post all their trades direct into the market. This would cost an absolute fortune for them and even with the spreads there is no way they would make a decent profit. This is particularly true for traders using microlot sizing.
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