Bucket Shop

The brokerage firms having “questionable” trading practices are called Forex bucket shops. These practices include unusually frequent price misquotes or requotes, slippage only favorable to the broker, and stop hunting.


Bucket Shop



Have you ever seen Boiler Room?
Aww come on, don’t tell me you missed Ben Affleck’s legendary speech about money?!
“They say money can’t buy happiness? Look at the smile on my face. Ear to ear, baby!”
And that's exactly the greedy, money-driven philosophy that drives people to run bucket shops.
The name comes from brokers who put their clients' phone orders on slips and then put them in a small bucket (slips, not clients) instead of executing them.
Without putting the orders out into the free market, the client is actually betting against the forex bucket shop operators who are also known as bucketeers.
These old school bucketeers usually did not show the actual value of the asset that their client was trading, which meant they could tell the client whether the value was transferred or not - whatever the broker's right.
But thanks to the invention of the Internet - and the improvement of regulations and enforcement - newcomers don't have to worry about these days.
Unfortunately, bucket shops are still out there so beware!
To help you differentiate between good and bad brokers, visit the Forex Brokers Forum, where fellow Forex traders are kindly requested to share their impressions and experiences with a wide range of brokers.
So, before you deposit your money with anyone, make sure you are proactive and spying so that you can avoid fraudulent brokers and forex scams. Remember you, there is so much more and we will consider it later!

 

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