Shocking Fact about Forex Brokers

In the past, I had been an IB or Introducing Broker of a small forex company. The company owner explicitly said to me that they don't like winning traders and no broker likes winning traders.

I was like "Why? Traders win or not, you earn you profits from spreads, right?" He said no. At that point, I learned what the OTC or Over the Counter broker was. If your broker is offering Over the Counter trading service, then they are not  actually trading in the market. Many people might believe brokers actually deal currency pairs according to our orders. But it's not true. They don't have to make any deal in the real currency market. They just show prices to customers.

So why brokers can make huge profits? Because they collect money from traders around the globe and accumulate it in their bank. Because they know, as you know, more than 90 or 95% or even more traders lose, they don't actually need to trade for customers. Once one of the clients lose his money, then his deposit would become broker's profit. You see? Brokers eat up deposits and gets fat because they know everybody will lose!

Ok, now, suppose the situation is different. What if there is one winning trader? Then, yes, they have to pay for him from the broker's bank account. Because they are not dealing real money in the market, they have no way to pay him unless they pay from their pocket.

That's the reason no broker likes winning traders. This is a fact.

At that point, I suddenly understood why brokers tried to kick me out when I had been doing News Trading and kept winning. They love novice traders, losing EAs, and anybody who don't know how to trade. They even give you great amount of bonus when signing up, so that they can finally get more.

See? I quit to work with this f*cking broker with bulls*it owner. This broker prohibited scalping  because, according to the owner, scalpers would win. I had to keep saying to my clients like "excuse me, sir, you are doing scalping and your account may be closed if you don't follow our guideline." I was sick and fed up to say such nice comments to others (of course, ironically, because it can never be nice).

[EDIT on May 22, 2012: I had been misunderstanding the term, OTC. About four years ago, I was an IB of a broker and knew almost nothing about Forex, and my comprehension of market maker was misplaced with OTC at that time. The term "OTC" above should be replaced with "market maker."]