Dealing centers and scalping.

More than once I have had to deal with the fact that a broker prohibits trading using the scalping strategy, and not just prohibits, but cancels transactions (especially if they are profitable), or even blocks the account.

Different companies have their own restrictions on opening short trades, some simply limit their minimum duration to 3-10 minutes, others allow opening no more than 20 trades per session, and still others provide small leverage.

So for what reason do dealing centers not like those who trade scalping?

It would seem that everything is logical: the greater the volume of transactions a brokerage company transfers to the forex market, the larger the spread it will receive.

And scalping is not only large-volume transactions, but also a large number of open positions, and a separate commission is taken from each new order.

It turns out that it is profitable for the broker to work with scalpers, because the size of the consolidated spread for just one day of trading can exceed the size of the trader's deposit .

There are several reasons for this dislike.

• The broker does not withdraw anything anywhere - that is, trading is conducted entirely on the internal platform, and to ensure liquidity, the DC sometimes has to open counter trades. And if the trader is lucky, this means giving him a fairly solid profit, because some scalpers trade volumes of 10 and 100 lots .

• Server load - which leads to an increase in order execution time and the appearance of technical failures. It would seem that 50 extra trades a day are of no use to a reputable broker, but what if there are 100 or more such scalpers?

• Weak partners - in most cases, dealing center liquidity is provided by one or a group of banks, in which case the entire burden is transferred to the liquidity provider. If this is a dozen large banks or even the interbank market, scalper trades will simply disappear into the general mass of orders, but working with just a couple of banks can cause problems.

In any case, prohibiting scalping trading reflects poorly on the broker - it trades only using an internal platform ( a "forex kitchen "), has weak technical support, or cannot provide sufficient liquidity.

You can find companies that allow scalping in the " Scalping Brokers " section.