Question 109—Brokers Against Traders

Answer 4 Forex trading houses
Most forex houses operate as bucket shops—rather than transmit your orders for execution, they take the opposite side of any trade, whatever you want to trade, either long or short. When you trade in the interbank market, buy or sell currency futures, or simply exchange cash, a brokerage house does not care whether you make or lose money. They execute your orders and collect commissions. On the other hand, most forex shops bet against their own customers on every trade. When their clients lose, the shops make money.

Get The New Sell and Sell Short: How to Take Profits, Cut Losses, and Benefit from Price Declines, Expanded Second Edition now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.