Forex kitchen is a dishonest broker who plays against their clients. The forex kitchen does not have a liquidity provider and is not interested in the profits of its clients. Therefore, she does everything to make their trade unprofitable.
A forex kitchen is a company that provides services in the stock or foreign exchange market, but does not bring clients' trades to this market. Forex kitchens are interested only in one thing - for the client to drain his deposit. To do this, they offer traders favorable working conditions - deals without commissions and spreads, and so on, but in reality it is not possible to stay in the black with such a partner.
What is the difference between a Forex kitchen and a real Forex broker
The main profit of a Forex broker is the commission from each transaction, that is, such a broker does not risk in connection with the opening of positions by his clients. The interests of the clients and the Forex broker do not collide: regardless of what result the client plays, the broker will create all the conditions for him to work further. The classic Forex kitchen does not enter the real market, it does not have a liquidity provider and it receives all the profits it earns by playing against its clients. That is, the client's profit translates into a loss of the kitchen and vice versa - his loss is the profit of the kitchen.
When creating a conflict of interests between the trader and the kitchen, the latter does everything to make him drain his deposit: zeroes the result of profitable trades, draws quotes, thus knocking out stop orders and sticks in the wheels with other dishonest methods. For example, a trader is going to buy a currency in large volume: provided that there is no counter order on the internal server, the broker himself enters the arena, selling this currency to the trader. If an open position turns out to be unprofitable, the broker silently watches the trading process from the outside. If the trader's profits start to rise, the negligent broker comes into play by manually adjusting the process. As a result, the trader may experience a malfunction of the terminal, the failure of a stop order, and more.
How to identify Forex cuisine
Such companies tend to attract newcomers who have never dealt with the Forex market. On the basis of the kitchen, inadequately simple training lessons are always held, after which traders not only do not acquire new knowledge, but also begin to misinterpret the well-known truths of Forex trading. Such companies very carefully hide the liquidity provider, because knowing the liquidity provider, you can easily check whether this company is their counterparty. In addition, having received information about the liquidity provider, you can compare the available quotes and analyze the differences.
The Forex kitchen does not have a referral program based on paying partners a certain percentage of the commission received. However, today there are practically no “pure” Forex kitchens left, they have learned to better disguise themselves as real brokers, partially bringing their clients' transactions to the market. Therefore, it has become increasingly difficult to identify fraudsters.
