Why some brokers don't allow scalping?

[GVglobal Limited]

Scalping only makes an individual trader gain profit, because of small lots involving and more volumes happening
This won't help broker in any way as he may lose big lots which gives more margin of profits. So, scalping is said to be perilous. But being an individual, anyone can do scalping with the specific broker who are allowing.

 

[Cutiekc]

Scalping only makes an individual trader gain profit, because of small lots involving and more volumes happening
This won't help broker in any way as he may lose big lots which gives more margin of profits. So, scalping is said to be perilous. But being an individual, anyone can do scalping with the specific broker who are allowing.

Well, some traders however makes use of much lotsize. Trading on the scalping style does not neccessary means that the trader will invariably make use of small capital or small lotsize. Thats been said. So therefore the more sanctuoned reason why brokers don't allow scalping is because of the bugs it might possibly cause.

 

[Cutiekc]

When you come to technology there are no, greatness of proffession. hence you have exceed the limit it will react. Some enormous company to do have technical problems let alone a common broker. At times on placing order it takes time for it to be placed which I sensed should be caused by over activity.

 

[jackcm]

especially their own MT4 servers, can you imagine there are a lot of request in 15 seconds without stop, it will only make the server falling down and don't want to process, but for the broker that allow scalp i am sure they have super great server that even can handle a lot of scalping.

I used to think like you. Well, why don't you think those big company have millions and even billions dollar and they are not able to spend some hundreds dollar buy good hosting?

So, there is the only one reason that can explain this, they try their best to prevent you from easily earning.

 

[Angelic]

I used to think like you. Well, why don't you think those big company have millions and even billions dollar and they are not able to spend some hundreds dollar buy good hosting?

So, there is the only one reason that can explain this, they try their best to prevent you from easily earning.

You might be right but the have to make it subtle due to if they makes it known to their investors then they will be lossing some investors. I do think that, in concern with forex trading that they are just avoiding traders to make more money with the scalping strategy.

 

[sindarin]

I used to think like you. Well, why don't you think those big company have millions and even billions dollar and they are not able to spend some hundreds dollar buy good hosting?

So, there is the only one reason that can explain this, they try their best to prevent you from easily earning.

I don't want to invest my money in broker that does not allow me to do scalping, i know i am quite picky but i want all kind of technique and strategies available for me in trading rather than choose a broker that does not allow me to do scalp, because i think they are market maker and not only market maker they also the bad one and want to play "naughty" with traders.

 

[jackcm]

I don't want to invest my money in broker that does not allow me to do scalping, i know i am quite picky but i want all kind of technique and strategies available for me in trading rather than choose a broker that does not allow me to do scalp, because i think they are market maker and not only market maker they also the bad one and want to play "naughty" with traders.

That's good. There is no need to waste our time on those bad brokers while there are many reliable brokers such as RoboForex, FXDD and FBS that offer low spreads and allowing scalping.

 

[Pettyeve]

I wonder why some brokers don't allow scalping too. Is it because they do not want their traders to trade in short term or they think that there are chances of losing more when they scalp which could give them a bad reputation.

 

[gkintl]

Most brokers consider scalping as a simple process of taking advantage in quote delays. The data feed normally travels through the broker's server before it reaches the client terminal. By the time it reaches the client's MT4 platform, the price would have changed in a fast moving environment. Thus, allowing a trade to be completed at that price is nothing but trading with past data. Unless and otherwise a broker has facility or algorithm to balance such a situation, scalping will not be allowed. However, all ECN brokers allow scalping where our order gets executed directly without any kind of broker's involvement.

 

[amit.neogi]

Scalping is dangerous but once you matter it, you can make quite profit. Your profit = Broker Loss. They want you hold the position still you loss or give they enough time to make some change on your platform. At least it may the case for few market maker brokers!

is it any intraday or positional strategies i mean to say that in which case we can apply this method

 

[amit.neogi]

I wonder why some brokers don't allow scalping too. Is it because they do not want their traders to trade in short term or they think that there are chances of losing more when they scalp which could give them a bad reputation.

Yes absoloutely most of the brokers want to hold the traders position for more money or at first they provide some profit after they just hold position intensionally and make some losses and want coverage money ..

 

[gkintl]

I wonder why some brokers don't allow scalping too. Is it because they do not want their traders to trade in short term or they think that there are chances of losing more when they scalp which could give them a bad reputation.

No. It is not the question of choice but depends on the algorithm they use to open counter orders with a higher tier broker. Usually, in a fast moving market, the data which the client receives in his terminal would lag a bit. To avoid a client from taking advantage of the same, most brokers do not allow scalping. The only alternative for a broker is to use an algorithm that manages risk in an extremely efficient manner. For every few minutes the algorithm should assess the overall situation and hedge against a higher tier broker, if necessary. This is not possible for all brokers and so scalping is not allowed.

 

[sindarin]

That's good. There is no need to waste our time on those bad brokers while there are many reliable brokers such as RoboForex, FXDD and FBS that offer low spreads and allowing scalping.

yeah, allowing all kind of technique i think is a requirement of one good broker, but if we do some bad technique also it won't make that broker in "healthy" condition, and it seems that broker whose don't not allow us scalp in their platform really have problem and usually they said because of the server or because that technique is profitable for trader

 

[Daisy]

yeah, allowing all kind of technique i think is a requirement of one good broker, but if we do some bad technique also it won't make that broker in "healthy" condition, and it seems that broker whose don't not allow us scalp in their platform really have problem and usually they said because of the server or because that technique is profitable for trader

So you say scalping is profitable. It might be but many do ended up with losses though. Even though there are numerous day traders that scalp. There are also many intra-day and swing traders. Those are profitable as well but the brokers don't stop them. There are many reasons that they don't allow scalping. One of them is the break even coverage for them and also way too many payment requests can really interrupt them as well. Its a huge inconvenient and cash outflow sort of thing for them. When many scalp, they must pay liquidity coverage as well so that is a break even when they make spread from your scalp.

 

[Pettyeve]

No. It is not the question of choice but depends on the algorithm they use to open counter orders with a higher tier broker. Usually, in a fast moving market, the data which the client receives in his terminal would lag a bit. To avoid a client from taking advantage of the same, most brokers do not allow scalping. The only alternative for a broker is to use an algorithm that manages risk in an extremely efficient manner. For every few minutes the algorithm should assess the overall situation and hedge against a higher tier broker, if necessary. This is not possible for all brokers and so scalping is not allowed.

That is some fine explanation. I get more attracted to a broker that will allow me scalp than the opposite. I like brokers that offer me more trading options so I can operate my account to any that suites me at that moment.

 

[budado]

Its because in forex market broker sites has some limits on how many volume its can transact per seconds and when theirs scalping theirs traffic and that means they can end up losing some speed simply because of too much activity.

 

[amit.neogi]

Its more on traffic. If you notice if the volume of trade happen theirs always a slow down and sometimes you can see server busy or connection error when you trade. Its because the volume of activity is too much for a server to handle. And that's why they don't allow scalping or trade that is less than two minutes.

Realy many many thanks to you for share this comments or post am also a new trader and am just searching the solution for this problem and now after read your post solved the problem now am understood that why the signals some time go down no bit are taken in system and also systems go slow.

Yes, that is the only reason that many brokers don't allow scalping. Scalping can be done frequently and anybody can earn a good amount with low risk.

Yes at the time of trading most of the traders are not allowed the scalping but its true that in that time anyone can earn money by scalping but at the moment systems are not working properly just go down in slow mode and for the same brokers just not allowed it.

 

[ProTrader]

If you actually check FAQ section of brokers you may see this:

....welcomes all EAs. However, any EA that results in transaction flooding of our systems will be blocked to prevent service disruption to our clients.

It may not true for all but it maybe one of the result.

 

[pithyon]

i think it not effective for that broker. as some broker don't allow EA

 

[barood4money]

Well, I believe that scalping is very much beneficial at some point of time. Ultimately we all are trading to earn more money as we can. And every person has his own strategies and planning.