Do Brokers Trade Against You?
Do brokers trade against you？
This is one of the common questions that new traders tend to ask all over the internet. While it might seem unlikely, the truth is that some brokers do trade against their own clients. So, let's see what is there to know about if brokers trade against you, and what impact it can have on your trading？.Two broker categories
As mentioned, brokers do trade against their clients, which is not exactly a secret — nor is it actual cheating — but it is something that a lot of people may not even be aware of.
Another thing to note is that not all brokers do everything in the same way. In other words, details on how they operate differently from one broker to another, but most can be classified in one of two groups — A Book brokers and B book brokers.
When trading CFDsand Forexthe contract is always between you and the broker. So technically the broker is always trading against you. It is how they manage this risk themselves that makes the difference.1) A Book brokers
When it comes to A Book brokers, they are trading against their clients, but only in a technical sense. In other words, they do take the opposite side of the trade, but they tend to take a risk-neutral approach to the market. Their goal is to offset the trade as soon as possible,
Clients that are treated in this way are usually considered profitable, and no one wants to trade against profitable traders.2) B Book brokers
When it comes to B Book brokers, they will be a bit pickier when it comes to choosing what position of their own clients they want to offset. In other words, they might take a directional position and may actively trade against their clients.
With the majority of the clients (75%) losing in their trading, it is quite clear that the stats favour the brokers.
Picking the right broker
If you are new and you don't want to lose all of your money in a few months, at best, you will need to keep in mind some things about your brokers, especially when it comes to how to choose the right one to work with.
Whether a broker trades against the client is not the key question as long as they provide you with fair and clean execution of orders. There are numerous things to look for, but we will now list some of the most important ones. Always remember to check them out, as the success of your trades may very well depend on this.1) Is your broker licensed and regulated？
The first thing you want to check before even starting your cooperation with the broker is whether they are licensed and regulated. You have to understand that there are all kinds of dangers out there, especially when it comes to money.
Scammers will try to scam you, other traders will try to outsmart you, and everyone will try to use you for their own gain. This is why you need to look after yourself, which means securing your money.
The best way to ensure that you and your funds will remain safe and secure is to use a licensed service that is fully regulated. That way, you will have some confirmation that neither you nor your broker will get in trouble from the legal point of view, while everything that your broker offers will be in compliance with regulations, which are ultimately created to protect you, the client.2) Trustworthiness
Once again, when you work with money, there is never enough trust. Unfortunately, you need to be able to trust others in order to be a trader, and that means trusting that they will keep your money secure and that they will keep their end of the bargain, which basically comes down to providing a good-quality service.
People have gotten rather bold online, and there is not a lot that they won't say if they are not satisfied with a service. That is what you need to use to your advantage, and read up on others' experiences and thoughts about the broker. These reviews will tell you what to expect, what are some positives and negatives about the broker. Most of all, reviews will help you decide whether a broker is trustworthy or not.3) Ask questions
One thing that people rarely do anymore is to ask questions directly to the service. For whatever reason, people tend to avoid direct communication and potential confrontation, and instead, they go and gather information 'from around' instead of going to the source.
This is the wrong way to approach things, and you should simply ask the broker directly about anything you wish to know. Licensed brokers must provide you with accurate and full information when you ask a question. They must follow detailed regulations that cover disclosure and fair trading. The most important information that you need is about their dealing desk policy. Brokers that operate outside regulations such as those without a license or registered in offshore tax havens may not tell you the truth, so as we said earlier make sure you deal with a licensed broker.
They might feel uncomfortable about admitting that they act as counterparties to your own trade, but they will still have to admit it and inform you about it.4) Educate yourself
竹笛 我想学 渡情 请问是买A还是B调 的笛子 我还要...