Broker dirty tricks

[Henry]

Have a look at the attached charts. CMS caused a huge spike at 13:26 yesterday, thereby taking out many stops. Compare the candles with those of Avafx and you will see what I mean.

They offer to match your deposit - even if you deposit $100 000. It was tempting, but not anymore. How does one complain about this. Just in case you might think that it is sour grapes, I do not have an account with them.

[adria]

Well, I also dont have accounts with any of them, thorugh i have heard of such tricks from many traders. Thanks for the post, as now i could see how brokers can manipulate amd tempt us.

Thanks

[jason]

here are a lot of fraud and scam in Forex market as in other businesses. In this connection most of the law enforcement and regulatory agencies are fully aware of who is perpetrating Forex fraud and where they are located. But keep in mind that only by contacting EVERYONE that you can will get results.

The United States Commodity Futures Trading Commission (CFTC) is the federal agency that regulates the trading of Forex currency, commodity futures and options contracts in the United States and takes action against firms suspected of illegally or fraudulently selling Forex currency, commodity futures and options. You can launch a complain to them if you feel you have been scammed by a forex broker.

[JuliaKhanam]

Forex trading is my hobby. It is one of the best feelings to watch your account rising when price goes your way. I wish every trader has many successful trades. But to be successful you need to know few things. Few things that beginners usually don't know or even perceive. Old trader will tell you that profit not always depends on your right decisions. You have to remember that there is a broker between you and the market. Imagine that some brokers (maybe all?) can play against you and make profit of your loss. Not funny, isn't it? I won't write which broker exactly do the bad things. In this article I'll describe dirty tricks and try to write how to protect you account. It is very important to know brokers' bad moves, even if we can't do anything to avoid them.

There is a list of brokers' bad moves. I divided them into four parts where I described every dirty trick and tried to tell you how to avoid them. Have a nice reading.

Brokers Dirty Tricks List:

1. Price manipulatoin

2. Slippage

3. Requotes

4. Rising spread

5. Backtesting sucks

6. HFT

1. Price manipulation To tell you about price manipulation I need to write something about types of brokers. There are two essential types of brokers: Market Makers and ECN. You can read more about differences between them on this site. But the biggest difference is that ECN brokers connect you with a worldwide exchange of banks where you directly make trades. Market Maker stays betwen you and this worldwide exchange and all your trades are going through your broker. What does it mean? That your broker can be the other side of your trade. The result is that broker earn money you lose, and lose money when you win. How do you think, will the broker let you win? To make this more understandable I'll describe it with this simple example: Imagine that you buy 1 lot of something. Your broker should cover your trade by buying 1 lot from interbank. With this scenario broker doesn't play against you, he has profit from the spread. But broker can sell you 1 lot without covering it with interbank. This is the situation I wrote about. Broker wins when the price goes down so when you lose.

2. Slippage Slippage is a difference between the expected price when you entered the market and the real price when your position was set. There is nothing bad that the price can change a little in some way. But from my experience it is always changing in opposite way I made my trade. For example when slippage = 5 pips and the spread = 2 pips you are 7 pips less on the start. And when you earn some pips in some way, let's say 10 pips and you want to close this trade you will close it with slippage and earn 10 - 5 = 5 pips. How you see it is better to play without slippage.

3. Requotes Requotes are strongly related with slippage, but I describe them in this part to show their badly influence when trading news. Trading news can be really profitable if using special techniques. I'll describe it in another post. But when you are not enough experienced you better stay on your chart and don't trade news. At news time price can be crazy, skipping 50 pips up and then 70 pips down in a few seconds which can kill your account and leave you with nothing. High frequency of requoting makes that your long position can be set 50 pips above current price and that hurts. The same with closing trades. You really don't control the price and don't know where the price can be in few seconds.

4. Rising spread Some brokers use this way to make profit on our trades. Rising spread exists by the news time or by the night. Sometimes instead of slippage, but sometimes with. Anyway it makes you pay more pips for opening trade.

5. Backtesting I don't know other platform, but if you use Metatrader like most traders do I need to tell you that testing automatic systems is useless. I'll quickly tell you why. In historical data you won't find any slippage, requotes, rising spreads which you see on the real market. So you test your system in absolutely different conditions than your system will work in. If I were you I would be scarred to let my system play with real money.

6. High Frequency Trading I've met this definition on the stock market. The HFT process is described on this site. Do you feel cheated? Me too.

How to avoid all these bad tricks? The answer you will find on this site.



_________________________
Forex Decoder

[sabrinathomas]

I have never traded with those brokers, but i heard about them. At present i am trading with UFX Bank and It provides me nice trading platforms, low spreads and nice trading facilities.

[jackie101]

I agree, UFX bank is a good broker.

[goldie123]

Brokers Dirty Tricks List:
1. Price manipulatoin
2. Slippage
3. Requotes
4. Rising spread
5. Backtesting sucks
6. HFT

[shirley]

These bad brokers’ tricks are not the things that make your account smaller if you play smart. Surprised? I’m serious. The reason of losing money is your lack of knowledge, not brokers’ bad moves. You have the ‘know how’ of brokers’ tricks and you know how to avoid them. Nothing else you can do. Don’t blame broker for your wrong decisions cause you can always change your broker. To play successfully you need the knowledge and the experience.

[yooda]

Got such mail.

From: Dmitriy Nikiforov
Topic: Brocompany.com

The text below:
Broco Invest” ltd. is the sole owner of exclusive right for the service mark in testimony whereof we attach the certificate to this letter.In pursuance with 1484 article of Civil Code of the Russian Federation, a person in whose name the trademark is registered shall enjoy the exclusive right to use a trademark in any manner not contrary to a law.No one has the right to use, without the permission of the rightholder, signs similar to his trademark with respect to the goods for the individualization of which the trademark has been registered or similar goods if such use would result in a likelihood of confusion.
Dmitriy Nikiforov
VSI Technical Support Limited
IT department

Now it is absolutely clear that Broco Invest Ltd and VSI Technical support Ltd. are linked.

[toasterfx]

This is the most awful story I have ever face with. Broco company with several thousands of cliens is now an outlaw. They lied to clients that the had Cyprus CySEC licence, but actually they had not ever own that licence! This is ridiculous when somebody think they are above the law. To my opinion the resposibles should be imprisoned for such lie.

Here are the detailes (scans and documents) by the link below:
http://www.mediafire.com/?my2aunbie0saugw

[yooda]

Originally Posted by yooda

Got such mail.

From: Dmitriy Nikiforov
Topic: Brocompany.com

The text below:
Broco Invest” ltd. is the sole owner of exclusive right for the service mark in testimony whereof we attach the certificate to this letter.In pursuance with 1484 article of Civil Code of the Russian Federation, a person in whose name the trademark is registered shall enjoy the exclusive right to use a trademark in any manner not contrary to a law.No one has the right to use, without the permission of the rightholder, signs similar to his trademark with respect to the goods for the individualization of which the trademark has been registered or similar goods if such use would result in a likelihood of confusion.
Dmitriy Nikiforov
VSI Technical Support Limited
IT department

Now it is absolutely clear that Broco Invest Ltd and VSI Technical support Ltd. are linked.

In addition

[Tradinger]

Originally Posted by jackie101

I agree, UFX bank is a good broker.

Are you sure about that? I heard that this broker is a scam. Although it seems that almost every broker is scam when you would believe all the scam reports out there.

[Jona]

I have read thread on Forexpeacearmy where this broker was claimed as a scammer. Be cautious.

[alexgrant]

im so glad my broker doesnt do these tricks to me, cuz i know its the difference between earning and losing money, and i prefer earning money

in the begining of my trading experience, i was trading with another broker, and it was terrible (i prefer not using names...), i just kept on losing money because of its problems. now, that i dont have it, i know why i appreciat my current broker. and yes, the broker really is between you and the market, always remember that.

[edwarddevis]

There are plenty of offers available for brokers to make the advantage by dirty tricks as mentioned by you, i think we as investor should not get involved in such kind of scam.

[salem]

a trader must be careful and open an account with a decent broker, not with those tricky brokers ... stupid scammers !

[Jona]

Yeah, you gotta be careful. What brokers are reliable for you guys? I used to trade with forex-metal. Now they giving 100$ with every new account.Should I try again.Thanks

[salem]

Originally Posted by Jona

Yeah, you gotta be careful. What brokers are reliable for you guys? I used to trade with forex-metal. Now they giving 100$ with every new account.Should I try again.Thanks

I am with hotforex since a while and I never seen something bad from them if I lost some money it was my fault and if I had profits it was me too ! and about withdrawals and other stuff they just are safe and reliable !

[ertgh]

Originally Posted by Henry

Have a look at the attached charts. CMS caused a huge spike at 13:26 yesterday, thereby taking out many stops. Compare the candles with those of Avafx and you will see what I mean.

They offer to match your deposit - even if you deposit $100 000. It was tempting, but not anymore. How does one complain about this. Just in case you might think that it is sour grapes, I do not have an account with them.

Henry you are right I had the same problem with Alpari and some others. I'm a professional trader trading for clients and this really hurt me. I started trading at Estocks.com a year ago and I think they are the best out there, casue they are real STP borkers and don't do these dirty tricks. Plus they have 4 trading platforms to choose from including metatrader which very good.

[solochris]

Originally Posted by shirley

These bad brokers’ tricks are not the things that make your account smaller if you play smart. Surprised? I’m serious. The reason of losing money is your lack of knowledge, not brokers’ bad moves. You have the ‘know how’ of brokers’ tricks and you know how to avoid them. Nothing else you can do. Don’t blame broker for your wrong decisions cause you can always change your broker. To play successfully you need the knowledge and the experience.

Actually I agree with you. It's easy to blame on the brokers than ourselves.

[chase]

when you move with AAA bank rating , this shouldnt be a problem :cool:
www.finfx.de.vu :)

[ctech]

anyway, avoid those forex brokers with bad reputation. this is the first step into the market.

[eazytrader]

Originally Posted by solochris

Actually I agree with you. It's easy to blame on the brokers than ourselves.

I couldn't agree more with the earlier statements. It is our responsibility as a trader to choose a reliable broker. There are many rating sites out that help you to compare and analyse. There are also many traders who share their experience about the reliability of brokers in forums. Most of the complaints could be true.

[vmusci87]

I totally agree with you. We have to find a right broker. If we don't, so ratings sites and forums have been created for what?

But in fact, there are a lot of brokers all over the world and not easy to be a good broker without money, manpower and to get money for maintaining their name. So they had to do some dirty tricks to traders. I don't advocate them so we as traders have to know how to stay away from those brokers.

[chase]

ladies & gentlemen

please take a look http://www.youtube.com/watch?v=sGsf1V_vmbw
last time i checked http://exness.euro.lc & http://pepperstone.de no problems

[flogger]

The trick here that we can do is verify the broker first before joining. Check out also if it's listed at NYSE.

Also, check their demo account first before taking the plunge.

[mlawson71]

A lot of brokers and exchanges are pretty misleading in the way they advertise themselves, which leads to traders falling for their shady tricks, unfortunately. It's important to never take them at face value.