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How can forex brokers steal legally?
Companies, "Bucket-shop" (fraudulent) attract investments by customers and then simply abscond with them or if you do not put unfair trading conditions, under which every trader will lose money repeatedly. These could be pigeonholed as outright scams, and are fully illegal. Deserve their own theme and argued extensively over the internet, but unfortunately, legal brokers (registered and regulated) have developed a lot of procedures to win more of their merchants in an unethical manner.
"No extra charges, no commission, no hidden fees" - these phrases are suitable for commercial but each broker has a legal method to cut a few extra dollars or pips on their behalf through your position. I know of at least 4 of these methods:
1. Expansion of Spread-The preferred method of brokers the forex market. Spread the extension of commonly occurs during periods of high volatility. The broker may fail to establish your position when the price is marked (even if it is fully updated) and protects itself by imposing the merchant a more widely spread than usual. There is nothing wrong with this one yes, of course, the broker does so fairly. Nothing really stops to riders to apply more widely spread than is needed to get plenty of pips of the operators. What can you do to prevent the expansion of Spread? Select a broker who is not noted for excessive expansion or just try not to share during periods of higher volatility (important news releases.)
2. "Slippage" - It is dishonest in itself, since the suppliers of the liquids of the broker can change prices quickly and simply the broker may have no more choice but to execute your order at a price a little worse. But many riders use the "Slippage" for their own privileges and invite you to buy a currency pair at a price slightly higher (or sell at a slightly lower price than they could. The difference is your gain instant. It is impossible to find a broker without "Landslide," but you can try to register on one with lesser amounts possible of these. You can also try to avoid trade with market orders and change orders detention / limit, If you use EA's, you can use parameters reduced "Slippage" in orders
3. Disproportionate Swaps (Interest rates at night). Runners take care and overnight swaps pay resulting from the difference between interest rates in the short term and currency prices set by central banks. Unfortunately, the difference is not always rigorous. If the broker must make a charge for the swap operator, will charge higher than required, but if the broker must pay for the swap, will be charged reduced more than required. When the difference is a bit low (for example, currently EUR / GBP has 1.0% and 0.5% interest rate, USD / JPY is from 0 to 0.25% and 0.1%), the operator will have to pay the swap two ways, without being of importance if one is long or short the pair. This trick can be prevented by strict intraday trade, preferring an account "non-swap" and choosing a broker after reading their ways to better exchange swaps.
4. Excessive leverage. Not really a dishonest method of brokers, are the merchants who usually go for large amounts and brokers are excited to provide such large quantities, and to increase its profits for every pip spread. Remember this and you will not over-leverage. If you adjust, you can make exchanges without leverage (1:1).
Analyzing the above, it is extremely important Forex brokers prefer cautiously. Being ripped off by the market is one thing (it can be prevented by studying the exchange) but being ripped off by a broker can only be prevented by selecting a good broker.Bear in mind that even with the best broker, you constantly have to keep reading about Forex.