Who are market makers and market-users?
All participants market by activity and their influence on exchange rates are divided into two categories: market makers and market-users.
Market Makers - are large banks and financial companies that determine the current level of the exchange rate through a significant share of their operations in the total global market volume. Market makers are constantly active in controlling the buying and selling rates of various currencies and enter into transactions on them. Market Makers - market participants who have undertaken to provide liquidity for a particular instrument by placing buy and sell orders during the trading session.
Marketeers - are financial institutions that request the value of currencies in the market. These are usually small banks and financial companies, which use for their operations the rate set for them by market makers. Market makers are not active players in the markets and, although the total volume of their operations in the market may be quite large, the share of each of them is insignificant.
Market makers determine currency quotations for small banks, and market-users accept or do not accept these quotations of market makers. Thus, market makers quote the price (make price)and market-users take the price (take price).
Those quotations that a trader sees in his trading terminal are taken by market-users (brokers or dealers) from banks, market makers, and directly depend on the policy of a specific market maker that provides them. Quotations can differ greatly at different market makers (participants of different pools). Dealing centers (market users) in their turn, being intermediaries between a trader and a market maker, also introduce their own significant corrections into currency quotations. The trader must understand that a dealer will never offer those quotations that do not bring him/her some profit. Moreover, quotes from all dealers are differentdepending on the degree of honesty and his rate of return. It is not hard to check. So, if you open accounts in several dealer centers, the quotes from different intermediaries will be strikingly different.
Some dealers in order to increase their profits begin to play against the total position of all their traders, slightly shifting quotes. In principle, it cannot even be called cheating - it is quite a legal right of the dealer. And you will have to agree with it - the dealer gives you an opportunity to participate in trading, because you did not have the necessary sum to open a deposit with a broker from a large bank. The big dealer shifts the quotations in such a way that the trade brings profit to the dealer at the expense of some decrease of the client's profit, as if proportionally taking away a part of profit from each trader. That is most likely all he can do. And the dealing center, especially created for the deception (pay attention, they like to be called a broker, but in fact they are not), starts to play not only against the common position of all players, but also against the specific position of any client. And it is very easy to do it, because the dealer knows in what direction your position is open, the amount of money in your account, and the levels at which your stop losses (loss limiters). Therefore, for a brief moment it can quite represent such a market movement, which will make your position automatically close with a loss. In this case a momentary "splash" appears on the dealer's chart at the necessary moment, knocking out your stop or closing your position due to insufficient funds on your account. Moreover, you will not see the similar market movements on other dealers' charts. There is no place for the trader to complain in this situation, because the truth cannot be found in the dealer's "offshore".
Another popular type of deception is "slippage". At moments of strong market movements, the dealer's software "suddenly" freezes or the communication channel disappears, preventing the trader from taking profit or minimizing loss. There is no failure or disappearance of the channel in the form of a message on the monitor screen "no connection" - it was just a pretext to steal the trader's profit. And what if there really was a failure? Then how can we trust such a company which cannot afford to buy normal computer equipment for trading on the market ? Compared to the money a, such equipment is pennies. Immediately the question arises, and whether such a company will be able to raise funds for a standard lot to enter the market?
In such companies the trader's ruin is immediate. So if you see an ad in the Internet about the possibility of opening a trading account with 100$ and a leverage of 1:100 and higher, think twice - is it worth it? Yes, quite honest organizations often offer this service to traders for practicing their trading tactics. But on the Russian market there is a very high probability that you will get into dealers' "kitchen" and, eventually, you will be quickly "eaten". Trading on a "demo account" usually does not allow you to expose fraud, crooks understand that the client must be lured and will not show you all their tricks to cheat. Deception of newcomers by means of "trust management" has become popular among swindlers lately. This, more often than not, is a simple robbery.
The best option to start trading in the market in Russia is to Opening an account with a foreign brokerThe market maker system, if of course you have sufficient funds and sufficient knowledge of the English language.