It has occured to me that people making SIGNIFICANT money w/ forex will take away from any MM broker's operating capital.
Correct me if I am wrong here:
On any given day for the EURUSD, maybe 500 lots are long and 400 lots are short..... the broker takes a 100 lot short position to cover the exposure, and bets that "95% of traders lose money" so essentially they act as "the house."
If anybody is compounding their wins over time, they eventually will dominate either side of the exposed position. This means that a consistent winner will cost the broker huge money long term.
Now let's say I can make $1 million in 2 years w/ my broker. Most can't cover my wins because it would simply bankrupt them.
What do you guys think?
http://www.cftc.gov/files/tm/fcm/tmfcmdata0704.pdf
Correct me if I am wrong here:
On any given day for the EURUSD, maybe 500 lots are long and 400 lots are short..... the broker takes a 100 lot short position to cover the exposure, and bets that "95% of traders lose money" so essentially they act as "the house."
If anybody is compounding their wins over time, they eventually will dominate either side of the exposed position. This means that a consistent winner will cost the broker huge money long term.
Now let's say I can make $1 million in 2 years w/ my broker. Most can't cover my wins because it would simply bankrupt them.
What do you guys think?
http://www.cftc.gov/files/tm/fcm/tmfcmdata0704.pdf