Trading against clients is one of the most unethical and dangerous practices used by fraudulent or conflicted brokers, especially those operating under a market maker model. Instead of routing your trades to the open market, these brokers take the opposite side of your position, meaning your loss is their gain. This setup creates a direct conflict of interest and opens the door to manipulation, delayed execution, and even stop hunting.

In this article, we’ll explain how trading against clients works, how to detect if your broker is doing it, and how to protect yourself from being turned into the broker’s profit source.

What Does It Mean to Trade Against Clients?

When a broker trades against you, they do not pass your order to the real market or a liquidity provider. Instead, they fill your order internally, becoming your counterparty. If you buy, they sell. If you lose, they pocket your money.

This practice is legal under the market maker model—but only when done transparently and ethically. The real problem arises when brokers manipulate outcomes to intentionally make you lose.

How the Scam Works

1. Market Maker Setup

You’re trading on what appears to be a real market. But in reality, your trades are matched internally and never reach an external exchange.

2. The Broker Benefits From Your Losses

If you lose £1,000, the broker keeps it. This gives them a strong incentive to manipulate trading conditions against you.

3. Manipulative Tactics

To make you lose, the broker may:

• Delay or block profitable trade execution
• Trigger stop-losses via price manipulation or spread widening
• Introduce requotes when you try to close in profit
• Show phantom price spikes or freezes during key market events
• Restrict withdrawals after you win

4. Hidden in the Fine Print

These brokers may state in their terms that they are the counterparty—but bury this in legal jargon that most traders overlook.

Why Some Brokers Trade Against Clients

• They profit directly from trader losses
• They avoid paying liquidity provider fees
• They can control risk more easily internally
• They keep 100% of your deposit if you lose
• They can appear “zero commission” while still profiting massively

Red Flags Your Broker Is Trading Against You

• Frequent slippage and requotes in your favour are denied
• Orders mysteriously rejected or delayed when you’re in profit
• Chart prices differ from external platforms like TradingView
• Aggressive bonus schemes that lock your account
• Terms mention “principal-to-principal trading” or “acting as the counterparty”
• Consistent manipulation around news events

Real Consequences for Traders

• Unfair losses and frustration
• No access to real market conditions
• Psychological manipulation into overtrading
• Inability to grow or withdraw profits
• Loss of capital and trust in trading altogether

How to Protect Yourself

1. Choose True ECN or STP Brokers

These brokers do not trade against you. They connect your orders directly to external liquidity providers or the interbank market.

2. Verify Broker Regulation

Use brokers licensed by FCA, ASIC, or CySEC. These authorities require brokers to disclose their dealing models and follow strict conduct rules.

3. Test Execution Conditions

Place small trades and observe:

• Slippage frequency
• Speed of order execution
• Price alignment with other sources
• Behaviour during volatile news

4. Ask the Right Questions

Ask your broker:

• “Do you operate a dealing desk?”
• “Are you the counterparty to my trades?”
• “Is this a B-book or A-book model?”

If answers are vague or dodged—walk away.

5. Avoid Brokers With Conflict-Driven Models

If a broker profits only when you lose, they are incentivised to sabotage your trades. Prefer brokers that earn via commissions or spreads, not your losses.

Become Smarter Than the Broker

Understanding how brokers profit—and how some cheat—is key to protecting your capital. Traders MBA offers trading courses that teach broker models, execution risk, and how to trade with platforms that align with your success—not your failure.

Conclusion

When a broker trades against you, they are not your partner—they are your predator. While market makers can be legitimate, dishonest brokers exploit this model to sabotage your success and keep your funds. By choosing transparent, regulated brokers and learning how execution models work, you can take back control of your trading journey. Because when the broker wins every time you lose—you were never really trading. You were being hunted.