Fair and consistent trade execution is fundamental to a trustworthy trading environment. However, some traders encounter an unethical situation where trade execution depends on previous performance. In other words, traders who perform too well may find their execution speeds, order fills, or slippage manipulated based on their past success. This practice severely undermines trust and raises major regulatory and ethical concerns. In this article, we explain why brokers link execution quality to past performance, the risks it creates, and how traders can respond.

Understanding Trade Execution Depends on Previous Performance

Trade execution should always be impartial, ensuring all traders — regardless of profitability — receive equal access to the market.

When brokers adjust execution based on a trader’s previous performance, they discriminate against successful traders. This often results in slower execution, wider spreads, higher slippage, delayed order processing, or even intentional trade rejections — all designed to reduce a profitable trader’s advantage.

Why Brokers Link Execution to Previous Performance

Several motivations explain this unethical practice:

Protecting Broker Profits

Brokers operating as market makers lose money when clients consistently win. To protect their margins, they may deliberately worsen execution conditions for high-performing accounts.

Risk Management Policies

Some brokers implement internal risk controls that throttle or delay execution for traders flagged as “high risk” — often defined by profitability, not by actual account behaviour.

Discouraging High-Performance Strategies

Traders using high-frequency, scalping, or arbitrage strategies that exploit pricing inefficiencies are often targeted with worse execution to limit their success.

Operational Prioritisation

Some brokers prioritise execution quality for lower-risk (losing) traders while deprioritising accounts that are consistently profitable.

Impact of Performance-Based Trade Execution

This discriminatory practice has severe consequences for traders:

• Reduced Profitability: Poorer execution increases costs through slippage and wider spreads, cutting into profits.
• Strategy Disruption: Time-sensitive strategies such as scalping or news trading become ineffective.
• Loss of Trading Edge: Traders are denied the fair conditions under which they built their successful strategies.
• Increased Emotional Stress: Facing inconsistent execution increases frustration and uncertainty.
• Loss of Trust: Discriminatory practices erode confidence in the broker and the overall trading environment.

How to Respond If Trade Execution Depends on Your Previous Performance

If you notice worsening execution tied to your past trading results:

• Monitor and Document Execution Quality: Track slippage, order fills, and execution speeds over time, especially after periods of high profitability.
• Request a Formal Investigation: Ask the broker to explain any noticeable changes in execution quality, citing specific examples.
• Compare with Independent Data: Use tools like Myfxbook, TradingView, or execution analyzers to benchmark execution quality against external standards.
• Submit a Formal Complaint: Escalate the issue internally to the broker’s compliance department.
• Report to the Regulator: If your broker is regulated, file a complaint with the relevant authority, providing evidence of discriminatory execution.
• Move to a Better Broker: If unfair execution persists, withdraw your funds and switch to a broker offering transparent, consistent trade execution.

Preventing Problems with Performance-Based Execution Discrimination

To avoid encountering this issue:

• Trade with ECN or STP Brokers: Brokers with true market access models have no conflict of interest against profitable traders.
• Choose Strongly Regulated Brokers: Brokers regulated by the FCA, ASIC, or CySEC must maintain fair execution practices.
• Test Execution Early: Run execution quality tests early in the trading relationship, especially after a few profitable trades.
• Avoid Brokers with Dealing Desks: Market makers are more likely to manipulate execution against high-performing clients.

Warning Signs of Brokers Likely to Penalise Success

• Frequent Requotes or Slippage After Wins: A noticeable pattern of worsening fills after profitable periods.
• Execution Quality Not Guaranteed: Brokers that do not commit to best execution policies openly.
• Negative Reviews from Successful Traders: Warnings from other traders about poor treatment after successful trading streaks.

Conclusion

When trade execution quality depends on previous performance, it violates the fundamental principles of fair trading. Traders must act quickly to document evidence, escalate complaints, and, if necessary, move to brokers that respect skill and success equally. Choosing a transparent, regulated broker that treats all clients fairly regardless of performance is essential for long-term trading success.

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