Why GREAT Brokers DON’T want you to lose – 6 Reasons

Many people have this bad idea about the financial industry with brokers.

They think brokers make most of their money, when traders lose.

Yes this might be true to bad, unreliable and unregulated brokers.

But with great brokers, it’s far from the truth.

And I want to debunk this today…

How the belief about how people think brokers make money off traders losses

This belief often stems from the notion that brokers have a vested interest in their clients’ failures.

This is where when the client buys, the market maker sells. And vice versa.

And when the client loses, the broker wins and is able to reap profits at the expense of traders.

While there may be some unscrupulous entities out there. I want to destroy this myth.

Especially when it comes to great, regulated, and loyal brokers who genuinely have their clients’ best interests at heart.

1. Brokerages – Brokers Make Their Money from Brokerages and Commissions

One of the most fundamental reasons why brokers don’t want you to lose is their revenue model.

Reputable brokers earn their income through brokerages and commissions.

When traders execute (buy and sell) profitable trades, they generate more trading activity.

More trading activity leads to higher commissions for the broker.

• When the trader enters a trade they make a cut.
• When the trade hits the stop loss – they make commission.
• When the trade passes the take profit – they make commission.
• When the trade rolls onto the next contract – with some brokers they make comms.

They can’t make comms if the trader blows his account and moves to another broker, or stops trading.

Right?

1. Spreads – Other Brokers Make Money Off Spreads

Some brokers operate on a spread-based model.

In this system, the broker makes money from the difference (spread) between the buy and sell prices of an asset.

Brokers prefer traders who execute more trades, as it increases their potential spread earnings.

Therefore, they have an interest in your trading success.

And this alone should encourage you to be more active and profitable.

1. Trading Volumes – Brokers want you to have a large account

Successful brokers aim to build long-term relationships with their clients.

They encourage traders to grow their accounts and engage in a ton of trading volumes.

Brokers benefit from larger accounts because they can charge even more comms and spreads on larger trades.

And so, they have a vested interest in helping you build a profitable trading portfolio to increase their revenue.

1. Retention and growing a happy client base

Brokers with integrity prioritize on having their clients best interest.

Their goal is retention and satisfaction.

A happy and successful client is more likely to stay with the broker.

This helps make the broker more reliable, loyal and trustworthy for other clients.

And the happy clients will continue to trade and generate income.

Also, think about it.

Satisfied clients often refer friends and family, bringing in new business.

For this reason, brokers are motivated to help you succeed to maintain and expand their client base.

1. Long-Term Partnerships

Brokers aim to build long-term partnerships with their clients.

They know that a trader who succeeds over the long run is more likely to stay loyal and continue trading with them.

Brokers value the stability and consistency that come with long-term clients.

And that’s what makes them award-winning brokers!

1. Competition in the Market

The financial industry is highly competitive.

Great brokers understand that they need to stand out and differentiate themselves.

They want to keep and attract more clients to their base rather than others.

So why on earth, would they want the client to lose?

You’ll see if they genuinely caring about their clients’ success and providing excellent service, brokers will gain a competitive edge and attract more traders.

More traders, more money.

Simple.

So next time you think great brokers feed off clients losses – remember this.

GREAT Brokers DON’T want you to lose because of:

1. Brokerages – Brokers Make Their Money from Brokerages and Commissions
2. Spreads – Other Brokers Make Money Off Spreads
3. Trading Volumes – Brokers want you to have a large account
4. Retention and growing a happy client base
5. Long-Term Partnerships
6. Competition in the Market

FULL ARTICLE HERE -> https://timonandmati.com/articles/why-brokers-dont-want-you-to-lose/