The Truth About Trading: How Institutions, Brokers & Prop Firms Profit Off Retail Traders
📍 The Two Types of Brokers & Why It Matters
1️⃣ Market Makers (The House Always Wins)
They take the opposite side of your trade—when you lose, they win.
You’re not actually trading the market, you’re trading against them.
They manipulate price, execute stop hunts, and make sure most traders lose.
2️⃣ ECN/STP Brokers (The Real Middlemen)
They connect you to the real market.
They charge commissions but don’t trade against you.
Still, they profit the more you trade, so they push overtrading through ads & education.
📍 How Brokers Make Money Off Retail Traders
🔹 The Spread Scam
The bid-ask spread is widened during key moments to ensure you enter at a bad price.
Example: News events where spreads jump from 1 pip to 10+ pips, ensuring you get screwed.
🔹 Stop Hunting & Price Manipulation
Ever noticed your stop loss gets hit, then price immediately reverses? That’s not a coincidence.
Market-making brokers see all of their traders’ stops and liquidate them to take their money.
🔹 Slippage & Delayed Execution
You click “BUY” at a price, but you get filled at a worse price? That’s intentional.
Brokers manipulate order execution to increase losses and fill their own pockets.
🔹 High Leverage = Fast Account Blowups
Why do brokers push 1:500+ leverage? Because it makes you overtrade and blow up faster.
They know the average trader will wipe their account in months, so they push reckless leverage.
🔹 Bonus & Deposit Schemes (The Bait to Trap You)
Ever seen brokers offering “deposit bonuses” like 100% extra margin? That’s a trap.
These “bonuses” often come with conditions that make withdrawing profits nearly impossible.
📍 The Funded Account Racket (A New Way to Exploit Retail Traders)
Prop firms aren’t actually funding you—you’re paying for a challenge, and they keep the fees.
They structure the rules so you fail, making you retake the challenge over and over.
Most “funded” traders never even get to withdraw profits because they break the strict rules.
📍 The Harsh Reality: You’re Trading in a Rigged System
The system is designed for you to lose—from brokers to funded accounts to fake educators.
If you don’t learn how to trade smart & think like institutions, you will stay in the cycle of losing.
🔑 Key Takeaway:
Most brokers don’t want you to win. They make money when you lose. If you don’t understand how the game is rigged against you, you’ll never escape the retail trader trap.