Originally Posted by
mianshabbirhussain
Read the service agreements and contracts. When a Forex broker says that they are a counter-party to your trades, and they've given themselves the choice whether or not to hedge your positions, what that means is that unless they choose to take action they generally win when you lose and vice versa. Under some situations, they net all their customer positions and take a trade with a tier 2 bank (their liquidity provider) to flatten their own net exposure. In most cases, however, they can actually maximize their profits by simply not doing this because the majority of their customers are consistently-losing gamblers who blow their entire accounts and might even re-deposit a few times to repeat the pattern and increase their profits further.