Risks related to the account
There are various risks in investing, but,
among themare risks related to accounts (brokers)this is the story.
Are you a domestic account advocate? Or an overseas account advocate?
I think the majority favor domestic accounts, but both have advantages and disadvantages, so
I can’t say one is absolutely better than the other!!!
And whether domestic or overseas, there are various brokers, so
I can’t say “this is the one” here!
Let me ask you suddenly.
When opening an account, did you thoroughly research the broker?
A quick search on the Internet
・“XX broker is recommended!”
・“Their spreads are tight!”
・“Domestic clients No.1!”
Are you lured by these slogans andsettle here?and open an account with a casual mindset?
There are also many brokers being introduced on Instagram recently, right?
・“If you trade with XX broker, you’ll save so much!”
・“Opening benefits with XX broker!!!”
You often see posts like that.
Why do so many people promote brokers like this?
Have you ever thought about it?
Because affiliate rewards are good!
It’s not necessarily because they genuinely recommend them?♂️
Well thendomestic accountsandoverseas accounts—shall we look at the differences?
In particular, amateur traders focus on“the spread”right!
For example, USD/JPY.
Generallydomestic accounts have 0.1-0.2 pips. overseas accounts have 1.2-1.6 pips.
about a 1 pip differencethere is, isn’t there?
For 100,000 units of currency, that’s 1,000 yen.
For 1,000,000 units, it’s 10,000 yen.
It’s quite large, isn’t it?
So many people think smaller spreads are better, which is understandable.
But is that really true?
Spreads are not the only fees involved?♂️
Orders may not be filled at that rate.
Slippage also exists.
If you place a buy order for USD/JPY at 100 yen, the actual purchase might be at 100.10 yen!
Something like that can happen.
Even if a broker advertises narrow spreads, if they slip in the negative direction, it’s meaningless?
Since this is something you’ll only know by using it, first try with a low lot to feel the broker’s responsiveness?
Do you know why domestic accounts have narrower spreads?
Because brokers do not route orders to the interbank; they offset orders between customers.
This isa bilateral (hand-to-hand) transactionand“DD method”,“acquisition (play) act”is also said.
Aperson sells USD/JPY100yen.
Bperson buys USD/JPY100yen.
This is matched by the securities company.
In other words, the dealer intervenes.
“There is room for the FX company to engage in acquirition play”,is also said.
Malicious brokers try to increase their profits by triggering slippage?
※In the past, shady acts were common?( ´・з・)b Shh!!
Those who have done some research may think
“NDD is better than DD!”
“Even NDD, STP is better than ECN!”
is often said.
DD（Dealing Desk) methodis bilateral trading
NDD（None Dealing Desk) methodis a trading where orders are sent directly to the interbank without human intermediaries
Because the NDD method sends orders directly to the interbank without human intermediaries, it is said to havehigher transparency.
Well, that’s about right... (this part is hard to say out loud, but…)
Even brokers that advertise NDD still engage in acquirition play.
So, being NDD alone doesn’t guarantee safety!
It’s just a little more transparent than DD-only brokers, I’d say. lol
Especially brokers advertising extremely high leverage for overseas accounts always do acquirition play. If they didn’t, their business wouldn’t survive?
I’m not saying that “acquirition play” is inherently bad.
Spreads become tighter!
But depending on the broker
・There are times when spreads go weird.
・Candlestick charts differ from other brokers.
・Sometimes they quote strange rates momentarily (stop hunting).
・Spreads can widen extremely at times.
There are times you feel it’s being manipulated by people.
Avoid such brokers.
In particular, brokers frequently promoted on Instagram are notorious for being unethical. lol
I’ve never seen pros using them, lol
Maybe I’m the only one who knows… I would never use them, lol
People who promote such brokers… it’s awful, isn’t it?
Domestic account spreads are, by principle,“fixed in principle”so...
When they open, they do widen, don’t they?
There were brokers where spreads widened by more than 100 pips during a flash crashright?
With a certain domestic broker, I had my“profits confiscated”before.
I won’t use this broker anymore?
・Even if overseas accounts advertise zero-cut, I didn’t get zero-cut!
・When trying to withdraw from overseas accounts, they charged 30% of the withdrawal amount as fees!
・Couldn’t withdraw from overseas accounts!
These kinds of stories are common.
Account (broker) risk is quite real!
There is no perfectly safe broker for everyone.
Consider all risks and invest cautiously.
By the way, I have always used overseas accounts.
There are times I think I’ll try one domestic account, though…
Ultimately I continue to use overseas accounts. lol
That’s all for this time.
Thank you for reading to the end. m(_ _"m)
※I’m grateful for your kind words as always.
Thank you very much.
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