Why Forex is not a scam?

Many foreign exchange players claim that foreign exchange is a scam.  They feel that once they go into the market and trade, the brokers trade against them.

To say this is quite unfair on the customer’s part.  For one, not all brokers are market makers.  The Electronic Communications Networks (ECNs) just pass on your order to the market, just like how the stock broker passes the order to the stock exchange.  The broker  neither loses nor wins as what they get is only a fixed commission based on the transaction. 

The stock market also has the market maker although this is limited to certain stocks. So if you trade a particular stock with them where they act as market maker, chances are you will not be able to maximize your profits, as they have a certain control over the bid and the asked prices as they do have the inventory. 

This is the same way the market makers in the forex industry work.  Since they provide liquidity, they are always there to provide a quote and is always on the opposite side of a buy or a sell.  They provide the balance and take no sides.  Their main motivation is to get the spread on each and every transaction they make.

There are also forex brokers who act as market makers.  What they do is offset customers shorts and longs against one and another.  Doing this, some brokers do experience an “overbalance”: in this aspect brokers differ in  the way they react, often following a set of internal policies that address such situations.  Since positions they take are based on outcomes of future transactions, they may either keep the exposure or offset this in the market.

Another claim of the forex players is that their brokers run their stops, that is, their transactions have been closed early in trading, supposedly to stop any further losses.  Although this may happen, the possibility is very small as the brokers have to keep their prices tight, otherwise they run the risk of losing business.  The claims may have come from players who have set their stops very near the market and were taken out early because of the normal volatility of the market.

Forex trading is really for people who have the guts to accept volatilities in the market they have chosen to go into.  There are no fool proof trading systems that can boast of continued successes. 

Lastly, your brokers handle a lot of trades within the day and he could not specifically check each and every customer’s open positions and make decisions based on them.  So if you were hit on a stop, then it is because of the market


About UFXMarkets at WordPress

As a leading online bImageroker, UFXMarkets offers its clients access to trading currencies, commodities, indices and CFDs, and it also provides a variety of useful trading resources on its website at UFXMarkets.com to help keep its clients well informed. Founded in 2007, UFXMarkets became a Reliantco brand in 2011. As a Cyprus Investment Firm or CIF, Relianto is regulated by CySEC and operates under license number 127/10.  CySEC is responsible for ensuring that companies it oversees conform to the European Union’s MiFID guidelines, which provides added protection for clients of such regulated firms.

The staff of UFXMarkets consists of finance professionals and experts that have a total of fifty years’ experience in the Foreign Exchange business.  The company has been operated since its inception under the basic philosophy of keeping clients enthusiastic and satisfied by informing them well and providing a high quality dealing service.

ParagonEX is the online trading platform offered by UFXMarkets to its clients, and it was developed by the firm’s CEO to include charts and timely data feeds, as well as efficient deal execution. The company’s website at UFXMarkets.com also provides useful informational resources for clients, including daily video market outlooks, market commentaries and trading ideas. Educational material and services include trading tips, personal training, trading strategies, articles and tutorials. Multi-lingual customer support is also available around the clock via telephone and includes trader coaching, personal dealer access and remote assistance technology.

Available funded account types at UFXMarkets include Mini, Standard and Advanced accounts, with Demo accounts available for those that wish to practice trading before committing funds. We also respect our clients’ cultural differences by making interest-free accounts available to those who prefer to observe traditional Islamic banking practices. The Accounts page at our UFXMarkets.com website has additional information about each type of account.

The protection of client funds and personal data is a priority at UFXMarkets. As a result, we use industry-standard 128-bit SSL encryption technology on all data transmissions. Client and account data is also stored at secure server farms with armed guards and by keeping multiple backups for added protection. State of the art firewall technology is also employed to prevent unauthorized access to client or corporate information.

As a result of our commitment to giving clients a quality trading experience, competitive prices, the best possible informational resources and excellent customer support, UFXMarkets has established a leading position in the online broking business.  Be sure to read our latest blog posts at WordPress, and check out our official website at UFXMarkets.com to open a trading account with us today.

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