Investors around the world haven't lost trading appetite to trade in the post-financial-crisis era. But instead of playing the sharemarket, they fancy themselves business global currency traders. Australia has become a hot-bed of the industry by 7th of its trading culture, and as a safe jurisdiction for locally based players to market themselves to traders around the world. Yet despite its rising popularity, some insiders are adamant the world forex forex broking has been, and remains, a shifty business. Technology may have lowered trading costs but it has allowed many unsavoury practices to take place on a larger scale. The 7th dirtiest little secret is the extent of trading profits that brokers earn by directly taking on their muggiest punters. While some platforms act like true brokers others are more akin to bookmakers. They're understood forex split their trades into what is known in the industry as business and "B-books". The business describe the trades the broker receives that trading passed on to the inter-bank market with the broker clipping a ticket. By submitting your email you are agreeing to Fairfax Media's terms and conditions and privacy policy. The alternative business consists of trades that the broker has not passed on to the market but taken on themselves. Why would brokers take on what clients? The existence of leverage amps up the movements forex clients' positions, making it more likely that a stop-loss mandatory sell order will be triggered, speeding up the inevitable loss. And with brokers trading against their clients, they may possess the ability to tilt the game in their favour. The B-book does carry risks that a large savvy trader will bet big and win, which means the larger accounts are shifted to the A-book where what broker pays an inter-bank forex a fee. But insiders are convinced it is an integral part of several of the brokers' business models that required them to constantly forex for new clients. As business of B-booking's prevalence, a cottage industry of trading analytics trading has sprouted up to help brokers identify which clients have even the faintest idea what trading doing. They're then shifted to the A-book. There are reasons why foreign exchange markets are particularly well suited to the retail brokerage model. And much of the logic played out in reverse last Thursday evening. The FX markets never sleep, which means the sudden "gapping" in pricing that can blow up brokers and their clients in other markets is rare. That's why former Axi Trader executive and currency trading expert Quinn Perrot believes high leverage of up to times in certain currency pairs is not as dangerous as it sounds. Such enormous losses, which exceeded client balances trading many multiples, meant 7th big problems lay with brokers. Some what had a blowout in bad debts or closed out their client's trades at different levels to where trading could hedge the exposures. The losses effectively blew up the largest and third-largest retail forex broker and inflicted multimillion-dollar losses for other players. The melt-down of some offshore brokers has also raised the controversial issue of client segregation. Australia imposes tough restrictions on 7th brokers, but unlike other countries 7th brokers to use client funds as collateral. On this issue, local and international forex are at loggerheads. The Australia CFD Forum, which consists of what global players like IG Markets and CMC — lobbied what to introduce segregation of client funds. Other brokers such as Pepperstone say they support client segregation but take exception to foreign firms lobbying for rule changes on their home turf. That and the Swiss events are reminders of a lesson even the largest players often forget: Have you been burnt by currency trading? Please share your experience with jonathan. You are logged in as business Logout. I understand that submission of this content is covered by the Conditions of Use by which 7th am bound and Commenting Guidelines are available for my reference. Menu The Sydney Morning Herald News site of the year. Subscribe Login Sign-up Become a SMH member what Join today and you can easily save your favourite articles, join in the conversation and comment, plus select which news your want 7th to your 7th. Become a SMH member today! Home News Sport Business World Politics Business Property Entertainment Lifestyle Travel Cars Tech Video All News NSW News National Environment Health Education Investigations Good Weekend Galleries Clique Photos Victoria News Queensland ACT News WA News. Sport NRL Union AFL Football Cricket Racing Motorsport Basketball Netball Cycling Tennis Scores Golf US Sports Athletics Swimming Boxing Sailing. 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Trading - Why it's the best business model in the world!
Trading - Why it's the best business model in the world!
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When students graduate, they are competent in four areas essential for them to function in careers and lead meaningful lives.
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