The Truth of the Matter

What exactly goes on when you buy shares on the online trading platform? I can bet that it is not what most people expect. You might think that as soon as you click “buy” on the broker’s website, the computer sends your order to the exchange with the cheapest seller, to find the best deal there is on the market. You think that the broker minds you and has your best interest at heart since after-all, they are working for you and you are paying them a fat commission. You are wrong!

Biased Brokers

To think that you are the only one after the brokers’ attention would be detrimental. Everyone on the exchange market wants their business. There are a number of stock exchanges, from The New York Stock Exchange, BATS, Direct Edge, to Nasdaq, and almost all stock trades on these. A broker can therefore find a seller for the shares you wanted to buy on any of them. Some stock exchangers charge the broker a fee for using their platform, while others actually pay the brokers for instance BATS.

Put yourself in a broker’s shoe, where would you want to conduct your trade? As always repeat my friend, owner of this Thailand trading magazine : in trading everyone is trying to scam you

The brokers would be biased now. Your interests would no longer be their sole priority, but making themselves richer would be their main motive. They will just trade with whoever pays better rather than looking for the best deal for you.

History repeats itself

This is by no means new to us. Back in the 1920s, traders used to manipulate the market using inside information and collusion tactics. The same way high-frequency trading isn’t illegal today, market manipulation was legal back in the day. During those times, it took an investigation by the congress to reveal to the public how the richest in the society was defrauding the common citizen and out rightly stealing from them. Today, all it takes is a bold reporter with an internet connection to do the same. But the underlying fact remains the same: The market is rigged, the common public is being lied to and the rich are stealing from the poor!

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