Bucket Shop

Forex bucket shops are brokerage firms known for their “questionable” trading practices, which may include frequent price misquotes or requotes, slippage that only benefits the broker, and stop hunting.

Have you ever watched Boiler Room? Aww come on, don’t tell me you missed Ben Affleck’s iconic speech about money?! “They say money can’t buy happiness? Look at the smile on my face. Ear to ear, baby!”

It’s this greedy, money-driven mindset that motivates those who run bucket shops. The term originates from brokers of the past who would take their clients’ phone-in orders, write them on slips, and drop those slips (not the clients) into a small bucket instead of actually executing the trades.

By not placing the orders in the open market, clients are essentially wagering against the forex bucket shop operators, also referred to as bucketeers. These traditional bucketeers often failed to reveal the true price of the asset their clients were trading, allowing them to manipulate the information to favor the broker.

However, with the advent of the internet and improved regulations and enforcement, newcomers have less to fear today. Unfortunately, bucket shops still exist, so caution is advised!

Fortunately, we at BabyPips.com are eager to assist you in avoiding the pitfalls of these unscrupulous bucketeers. To help you distinguish between reputable brokers and the less trustworthy ones, visit the Forex Brokers Forum, where fellow forex traders generously share their insights and experiences regarding a wide range of brokers.

Before you deposit your hard-earned money with just anyone, ensure you conduct thorough research and investigation to steer clear of fraudulent brokers and forex scams. Be aware that many exist, and we will delve deeper into that topic later on!