I think that most of my friends have simulated trading before starting real trading. Is it very easy to make profits from simulated trading? In fact, the price you get when you simulate trading is the price you see. However, when you conduct real trading, you find that it is not so easy to make a profit. Why? Because the broker as the counterparty will use all kinds of complicated tricks in the background to make you lose money, and these tricks are not easy for you to find, even if you find them, you will find a way to give some reasonable reason. Today we will talk about the means of the broker's backstage.
1. Virtual background plug-in
Foreign exchange brokers can increase your point spread through agents to make it easier for your orders to trigger stop loss. This must have been heard by many traders and friends. Sometimes you compare the account under the agent’s name with the broker’s name. You will find that the spread is a little different for your account.
Secondly, brokers can also make you lose money in other ways that everyone thinks is reasonable. For example, the execution of your order is delayed for a few seconds. It is these few seconds that allow your order to be executed at an unsatisfactory position. If the market is not far from the reversal at this time, then the delayed execution will expand your loss. If you continue to do what you think If the trend runs, then the profit will become less. In addition, the virtual back office plug-in will also check other factors such as your stop loss and margin level, and the broker will adopt a corresponding strategy to execute your order accordingly. In addition, it can execute your order in advance. I don’t know if you have found a problem. Many times the order is a little bit short of execution but it is executed. Maybe you think it’s normal in many cases. No one is perfect. It’s just like this. The psychology makes brokers earn happily.
In addition to the above methods, it can also formulate an adjustable slippage ratio according to your situation to execute your order, which is mainly used for stop loss and stop profit. Let me give you an example to understand. If you think that the trend of gold is rising, and the current quotation you see is 1820, the default stop loss is 1810, and the take profit is 1840, then the possible transaction price when you place an order is 1820.50, or even higher, if the trend is really upward then your profit will be reduced, if the trend is downward, then your loss will become bigger, thus enriching the pocket of the broker.
The last thing I will introduce to you is that it automatically moves the parameters to move the limit order, stop loss and margin level according to the preset news events. Whenever there are important data and market events or major news events, we often cannot modify our orders. You will find that the stop loss seems to be advanced in many cases, or the stop loss has not been executed, and the result is that the margin is not enough. , leading to more losses, is there such a situation?
2. Transaction slippage
This is the second magic weapon for brokers to get windfall. When you browse the broker’s website, you will find that they claim to get quotes from many top liquidity providers, so they can provide you with the best quotes. Is this really the case? The best offer is true, but the best offer given to them. The quotes that brokers give you are their combined prices, and they will execute your order at the worst price. If a broker is betting against you, unfortunately, they will execute their order at the best price.
3. Price Gap
If a financial product often gaps, this situation is mostly products that open in the morning and have poor liquidity. In order to reduce the adverse impact on brokers, they usually set a gap range. If your order is in this range, Then your order will be executed. If it is outside the set range, you will get a requote, and the previous opening order cannot be executed. This situation must be very familiar to everyone. In order to give you an intuitive impression, I will cite a currency that I like to trade to illustrate this situation. My favorite currency to trade is USDSEK. This currency pair has two characteristics: First, it is easy to gap in the morning. Second, the point difference is very large. If it is calculated in thousands, it can reach three to four thousand points at most. Once I forgot to pay attention to this problem, and the transaction price of the order fell by more than 1,000 points, which is very unfavorable to me. Yes, it means that I will lose more when placing an order, but it is very beneficial to the broker. If this order triggers a stop loss, I will lose more, and if I make a profit, I will earn less.
4. Trading in market conditions with severe fluctuations in data and major events
Whenever important data and major events are released, brokers will notify that the market fluctuates violently at this time, the spread may expand, and orders may not be traded, etc. Please arrange your transactions reasonably and control risks. At first glance, it seems that the brokers are very kind to us, and you can understand that, but if you completely believe what they say, you will fall into the trap. Why? Because they have already warned about the risks, if they try to expand the spread and let your order be executed in a poor position, the stop loss may be triggered when the order is placed, or the profit may be stopped immediately after the order is placed, or the stop loss will be stopped soon. Profitable. If the market reverses after a while, you will lose more. If you really lose money at this time, most people may think that it is their fault. Of course, they are also at fault, but not entirely.
With the development of technology, brokers will use more methods to calculate us. In addition to the above, they also use complex algorithms, software plug-ins, and trading interfaces to calculate us. Here is a reminder for everyone, when you often use MT4 to place an order, you will find a string of words below to indicate the risk.
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