How is this even possible? What is the problem? This will be the topic of today’s article.
Has it ever happened to you that the broker deepened your loss compared to the one which was originally set as Stop-Loss?
Do you know why?
Recently, the hottest topic in the world of financial markets is the planned ESMA regulation for sure, not only restricting trading binary options completely, but it also limits the use of financial leverage followingly:
Are such worries legitimate and is the forex as we know it coming to an end, or is it all just about the transition from gambling to trading for some traders?
One such possibility is investing in the strategies of experienced traders who trade for a living either on Forex or on other markets. But to be able to legally manage their clients’ funds, they must get the necessary authorization or licenses, which is not an easy task.
In the previous article, titled “Regulation in Forex Trading” we discussed how the Forex market is regulated, what are the respective regulatory authorities in some of the developed countries as well as what regulation means for traders.
Do you disagree with ESMA about the restrictions on trading leverage in EU? Make your opinion count!
However, before we start writing about the issue itself, we would first like to show why this topic is so extremely important. The main issue is the fact that many traders have a great and profitable trading system on paper (theoretical), but in reality – on a live trading account very often it does not work.
Operating on the foreign exchange market long term is the dream of many beginning and experienced traders. When traders get through the rough patch of starting out in Forex, they get more knowledge, experience, and abilities to get closer to their goal.
How fair or unfair the trading will be thus depends entirely on the broker that you will trade with.
If there are other buy orders from other clients then the broker can match the two orders in which case the two clients will trade against each other. However, if there are no opposing orders from other clients then the market maker broker will itself sell the currency pair to the trader.
Below we have prepared a simple list of differences between poor-quality and high-quality brokers that should help you to get a better view of your current broker.
Trusted FX Brokers
Forex Education - Basics:
Forex Education - FX Brokers:
Forex Education - Technical Analysis: