7/1 (Mon) – Continuation of the article from 6/25 (about NDD, DD, A-book, and B-book)
EA developer Reiwa’s Double-Eye.
I was in the middle school baseball club, so
when giving examples, baseball references come up frequently,
and this time I’ll also talk about baseball. Haha
Professional baseball players belong to professional baseball teams.
It’s not that they are employees of the company that owns the pro team,
but each player is an independent contractor or a corporation,
and they contract with the team and receive annual salaries as professional baseball players.
However,
sometimes salary arbitration occurs
and there are cases where the team and the player cannot understand each other.
In those cases,
from the team’s side,
if the team ends up winning the championship,
they would have to raise salaries for players overall,
and there were team presidents who would even say, “It’s best to compete for the championship to draw many spectators and end up in second place.”
In short,
it means that the team and players have conflicting interests.
Not exactly the same, but
in FX brokers,
there are brokers and traders who have conflicting interests.
The so-called DD or B-book brokers.
Such FX brokers have
a dealing room inside the company,
and recently, not only real people but
systems that swallow traders’ orders
in other words, they hold opposite positions to traders,
and route them to liquidity providers,
and that’s a mechanism to increase the company’s revenue.
Why this works is because
most FX traders lose money.
Simply put,
treat a trader’s trades as anti-indicators,
and the broker takes the opposite position and profits.
This is called a conflict of interest.
On the other hand,
there are NDD and A-book FX brokers,
and their system is to pass the trader’s trades directly to the LP,
with a slightly higher spread or with external trading fees
to increase the company’s revenue.
This is not a conflict of interest,
if the trader makes money, the FX broker also makes money.
If the trader trades a lot, the broker also profits.
If the trader makes big lots, the broker profits too.
That is how it works.
Setting aside which is better for now,
in some cases the former can lead to being banned if profits are too high.
However, spreads tend to be narrower in that case.
Then there are brokers where trading is easier.
Even EA that seem likely to lose on spread,
with such brokers, the chances of profits can be higher,
and there is an idea to use such EAs, but
I have personally experienced this,
if you do that too much
you may actually get a call telling you to stop.
If you end up being banned,
you lose one option for domestic brokers,
which is regrettable for those aiming to improve the domestic broker ecosystem as a whole.
The latter means transparency.
However, spreads tend to be wider in comparison.
Still,
personally, for example,
I don’t feel spreads are wide at NDD/A-book broker Forex Finest,
and I think developers who create EAs that lose with such spreads aren’t EA developers,
that’s how I view it.
Well then!
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【Reiwa’s Double-Eye EA Listing】
https://www.gogojungle.co.jp/users/112481/products
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【Reiwa’s Double-Eye Serialized Articles】
■EA Beginner’s Course
https://www.gogojungle.co.jp/finance/navi/series/1700
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https://www.gogojungle.co.jp/finance/navi/articles/64703
https://www.gogojungle.co.jp/finance/navi/articles/64738
https://www.gogojungle.co.jp/finance/navi/articles/65619
https://www.gogojungle.co.jp/finance/navi/series/1714
https://www.gogojungle.co.jp/finance/navi/series/1701
https://www.gogojungle.co.jp/finance/navi/articles/64723
https://www.gogojungle.co.jp/finance/navi/series/610
【Reiwa’s Double-Eye’s Beliefs】
Develop EAs with a straightforward approach,
gain more widespread support,
and maintain a long-term WIN-WIN relationship,
to revitalize the EA market and raise literacy.
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