"THE MARKET... consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Alexander Elder

Monday, March 3, 2008

Forex Silly

Things have sure changed.

Poster reads, (with apologies to Mr. Rogers):
"You're special in your very own unique way.
In other words, we're all retarded."
You can bet your forex broker thinks so!

used to be that forex stop hunting was not admitted to.
It used to be that forex pretended to be a real marketplace.

Not only has the industry given up most of its "secrets",

now a new and exciting (?) opportunity seems to exist for traders
to get even.
This will appeal most to those traders who refuse
to acknowledge that OTC means off-exchange.
see: Why bother?


pupkinus said...


I read their site. What I failed to understand is how exactly are they trading? they don't act as a broker/dealer. I also fail to understand who is the counterparty to one's trades executed trough them... only questions...

Charles Longfellow said...

Interesting nonetheless. An entire industry of "trader protection" software could be imagined. One bigger than the other like Russian nesting dolls. In a strange and unexpected way, the IDEA of such a program could ultimately prevent,(curtail?), "trade partitioning" from affecting the exchange traded futures market. If you are using a broker, any broker, as an intermediary to any market, you are vulnerable. Some brokers are better than others; some markets are better than others. Some markets, like the non-exchange traded,OTC Spot Forex market, are just plain silly.

eXTReMe Tracker

What is a Bucket Shop?

"Bucket Shop is a specifically defined term under the criminal law of many states in the United States which make it a crime to operate a bucket shop. [2] Typically the criminal law definition refers to an operation in which the customer is sold what is supposed to be a derivative interest in a security or commodity future, but there is no transaction made on any exchange. The transaction goes 'in the bucket' and is never executed. Without an actual underlying transaction, the customer is betting against the bucket shop operator, not participating in the market."
see: Wikipedia

The SEC believes that "internalization" is somehow different, and this affects ALL of your online trading, no matter what you are trading. Trades that are executed outside of the exchange, never reaching the main market, effectively hide data from technical analysis, and skew pricing.
see: Not a bucket?

"... internalization hurts retail customers and market quality"

see: EconPapers

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