Reality of FOREX: my experience with brokers plus share yours
I advised all forexintuitive traffic, my title is Alex. Even though I typically don't contribute to forums, forexintuitive shifted my mind. I considerforexintuitiveas a fantastic and valuable community that isn't influenced by agents interests and that's free from brokers articles (among a few). I'd love to share there my experience too I think that this is eye-opening and useful for other traders.
Lets start with a bit about me personally. I trade Foreign Exchange for more than 9 years and approx the 4th year that I am in a position to trade it profitably. You are most likely thinking that I am not so successful if I was the complete five years unprofitable. And maybe you're right, because some matters and relations just needed more experience to explore. But after the long five years I managed to put together all the puzzles called Foreign Exchange and finally I managed to view all the principles and the way it really works.
Now you will likely expect that I will be writing about plogy a great deal or the way the right trader believes or that I will write about some holy grail trading plan. To be honest, this isn't exactly what Foreign Exchange trading is all about!
Do you really wish to learn what long-term Foreign Exchange trading and the entire mystery called Foreign Exchange is all about?
My long-term success in Foreign Exchange relies on two matters:The right money management (this part is extremely important) The right broker (simply with no Reasonable and high quality broker you Won't Be able to make any money) Let's start with money-management. The money-management is as significant to traders as a water for fish. If you do not have a rigorous, quality and mainly safe money-management model, you do not have any long-term possibility! In my own life I already fulfilled hundreds of traders who just lost everything, since they simply risked a lot.
Think about it is it feasible to trade 2 tons (200 000 of EUR / GBP / USD) with just a couple of bucks on your own account? Unfortunately, in the market today, yes. It is called financial leverage and traders are told that it is a fantastic instrument to start with a small deposit and also have a possibility to great profits. But plogy together with high leverage is simply a gun that will burst in the hand's of every dealer who will over-leverage his account and his orders.
Also think about how banks and other associations make money in normal trading let's not think about some insider advice trading or HFT that isn't available to us (it is not available to all associations). So it is all about managing money then.
My very first lesson is to always risk only the quantity that's acceptable in contrast with your account's worth.
The second extremely important part of trading is choosing the right broker. To be honest, if I'd tell you only 10% of the way the entire brokerage business works, you'd be thinking that I'm a ppath or sci-fi writer. However, the main objective of this article isn't to discourage you, but to help you.
There are simply two Kinds of agents: Those who'll take All of Your money (your deposit = the whole profit for those cheating agents) People Who Want lucrative long-term traders as they profit through spreads / commissions only and They're supplying the real market liquidity So to have the ability to survive in the market filled with critters, choosing really fair and superior broker is needed. Everyone would be likely able to shout at me tens or perhaps hundreds of agents, but we'd have the ability to count together the reasonable ones on fingers of my hands.
And believe me, I have already been trading with a great deal of agents and experienced a lot of bad / cheating practices in addition to good ones. I'd love to discuss my experience and tell here which agents you should certainly not trade with and which agents are based in my experience safe to trade with. I would also like to invite additional traders to discuss their experience (real accounts only!) And I will add your experience and notes on this very first article. I'd love to make something such as database of agent's notes / table and experience of serious vs. low-quality brokers.
Before that, allow me to save you some money and answer the way to recognize the minimal quality agents? Their sites are often like in the supermarket. Bonuses, discounts, cheap texts and graphics everywhere. The least expensive and most cheating trick of today's agents is % deposit bonus. Bear in mind, that no one will provide you anything free of charge and in the event of agents this applies as well. Similar agents won't ever allow you to earn.
These agents also almost do not talk about the very crucial factor which are trading requirements. A number of them talk about zero spreads, but that is actually the second grab. Much more significant than spreads is the real orders execution slippage, latency, speed, stability etc. and the entire trading technology and agent's liquidity suppliers.
Let's start with the agents database.
Agents that you should certainly avoid and reasons why:
IronFX (ironfx.com) huge percent deposit bonuses, huge financial leverage, traders cheated by huge slippages and not processing withdrawal requests for many months.
HotForex (hotforex.com) huge percent deposit bonuses, huge financial leverage, their zero disperse revolution is another scam because of their dreadful orders execution. Additionally, there are a great deal of IB partners, since they cover around $15 per every lot.
InstaForex (instaforex.com) that this is a massive scam notably in Asia. Again, % deposit bonuses, innumerable contests and rewards. A lot of trader's deposits stucked with InstaForex too.
Markets.com they'll call you daily if you're going to provide your actual account. They'll also inform you when to buy or sell and the way to loose every thing and bring profits to their b-book :--RRB- They are usually recommending to trade without Stop-Losses. They use some very simple scamming offers such as % bonuses and no-deposit trading.
FXDD (fxdd.com) previously based in New York and US controlled, then moved to Malta because of penalties from the US regulator. They provide binary choices (so called casino Foreign Exchange trading), they generally have some bonus time-limited supplies and their technology are extremely poor especially when talking about slippages.
Saxo Bank (saxobank.com) cheating broker with banking permit among the worst market maker with huge slippages. They are still judging with traders around the world due to the losses on EUR/CHF (after Swiss National Bank canceled 1,2 fix on EUR/CHF), the company is currently more enforcer than broker is they're trying to get all the losses that they artifically created by themselves from traders.
XM.com new participant in the sport. They buy banners everywhere and provide no deposit trading, % bonus offers and huge payouts to their IB partners. The same music again and again.
FXPro (fxpro.com) they seem like serious and reliable broker, they market their technology, regulation etc.. They've got two MT4 instant execution accounts where they profit from trader's losses. And yet one floating disperse market execution account which isn't any better than their market making account. It is very likely that the industry execution account is connected to one b-book owned by FXPro. Their 1:500 leverage is also the proof that you can not trade on the true industry.
XTB (xtb.com) XTB not a very long time back guaranteed the degree of Stop-Losses, why? Since they did not send any arrangement to the true industry. I traded fundamentals with them and made a very wonderful return with them. However, what I anticipated happend, XTB called me that they're closing my account. This simply proves that they profit from loosing traders and that they don't like rewarding traders.
Oanda (oanda.com) was among the better market manufacturers and traders were happy with them. However, something went wrong with them and their services are now worse and worse. Their execution is awful and their spreads can multiple by 10x days with no issues. Simply slippage and disperse will kill any dealer in the long-term with Oanda.
FXCM (fxcm.com) they're a story by itself. Just a few examples that talk for all: FXCM UK Announces $16.9 Million Settlement with FCA for Asymmetric Slippage, NFA penalties FXCM $2 million to get slippage malpractices etc..
FOREX.com - GAIN Capital - that I personally dont have a true experience with them, but traders across the Web are reporting closing their account in the event that they made some profit. They also cover their IBs around USD 500 per every qualified known client which is not usual in comparison to conventional profit share that offer professional fx brokers.
Z.com - FCA controlled, but doing a great deal of business in Japan too. They supply percent deposit bonuses, adjusted spreads, big shares to their IBs (around USD500 CPA). In their legal records you may find 100 USD maximum limit what one can maximum withdraw out of profits.
OctaFX - they shut profitable accounts of traders without providing a legitimate reason for closing accounts. They are supplying 50% deposit bonus. Also based in their IB / affiliate program, they provide around 15 USD per lot to their IBs (such as 1,5 pips - so the main stream of their profits aren't spreads / commissions, but their b-book and traders losses).
ETX Capital - they provide binary alternatives and huge shares to their IBs. There are scammed traders by ETX posting over the Web - one of those scammed traders can be viewed here (and his other article here). In addition, the movie in this informative article proves what happens when you start making profits with ETX. Scammed traders from ETX are in this thread.
Synergy Financial Markets - Australian based broker who claims to be STP / ECN. Nevertheless, they seem to manipulating the market and hunting traders orders - you can view this in the articles Here, here and here. More traders across the Web are reporting issues with them.
Plus500 - this agent likely does not need any additional comment. Personally, I don't have not so much guts to trade with them. From what I have heard, they even don't open real accounts linked to a liquidity providers and traders are trading on virtual accounts linked to live servers. Dealers are reporting that they remove money of traders from their account, don't send orders.
Alpari - their UK division went bankrupt during the SNB event. Here is the thread about price manipulation and SL searching by Alpari. Plenty of traders across the internet are reporting that Alpari is a scam.
FXPRIMUS - they're supplying 100% deposit bonus and enormous 1:1000 leverage. Their bonuses are being warned against by one offorexintuitivemembers.
DMM FX - warning against this initially Australian based agent - they closed their business in Australia and are trying to provide services in Japan. One of traders cautioned that they have pretty bad execution of requests (here). Plus you can see this thread how they were scamming other traders - such as penalizing traders who are using EAs by widening spreads etc..
A few more bucket shop brokers mentioned by yesyoucan here.
More visit the list soon.
On the opposing side, reliable and quality brokers are interested to possess as many lucrative traders as possible, since they gain from spreads / commissions just and the counter party of your transactions are almost always various liquidity providers of the agent. They also improve their trading conditions, trading technologies, they constantly provide immediate access to the market without any interventions, they supply high deposit security and especially have a great orders execution with both negative and positive slippage.
So here is my personal preference of reliable and the best brokers based on my opinion and experience.
Axiory (axiory.eu) - they changed their brand into Purple Trading (purple-trading. Com), and their new license allowed them to add a few services for money managers and investors.
I personally possess the real account with this agent with the maximum deposit. The agent is less called they don't invest to advertisement that much. As I trade a more time with them, I experienced significant technologies and trading conditions improvements that increased my belief in Purple Trading being a reliable brokerage. Based on my opinion they've currently the best technologies and quite good orders execution. For me, they're number one for my intraday trading.
Swissquote Bank (en.swissquote.com/fx)
With Swissquote, it is little bit more complied. There's Swissquote Ltd. based in London. Then there is Swissquote Bank Ltd. based in Switzerland and holding a banking license. Personally, I have an experience with Swissquote Bank Switzerland they have top quality technologies and I truly like their banking license / security. They were always fair and open to me. It's a company with enormous capital. So I have to say that they're doing a good job also.
JFD Agents (jfdbrokers.com)
Cyprus based brokerage with honest approach to traders. They have good trading trading and technologies conditions. For me, they're not the number one and they're also definitely not the number one in the world, but I like their egy and they're certainly a good choice in contrast with other filthy brokers mentioned above.
Interactive Agents (interactivebrokers.com)
US traders possess a very few options to pick from when they're comparing the brokerages accepting US traders. I really don't have a lot of experience with IB, but I believe them to be a good solution for both US traders. But I would be glad if you affirm or disprove this based on your real experience. You can read more detailed review.
LMAX (lmax.com)
Based on traders testimonials, LMAX is also a trustworthy agent and also a good option to consider. But, LMAX requires higher minimum deposit that doesnt need to match some traders.
Then there are a few Prime Brokerages, that average retail trader can not afford that they have enormous minimum deposit requirement and set limits how much you've got to trade every single month and cancel your accounts if you trade less. So for me the aforementioned options are currently the way to go.
Dealers can easily confirm which Cyprus licensed agent (it is possible to check with other regulators also) is a MM or STP, simply by checking their license type. You can read more here (and important add here).
My next lesson is that Without honest and reliable agent don't even try to trade, as you don't have some long term chances.
Now it is your time, I would love to encourage you to discuss your experience with both fair and bad brokers. Please provide as much information as possible and discuss your real experience from real accounts only. When appropriate, I will add your experience and notes on this first article. Let's help and help you save money each other and tell here that brokers traders should definitely avoid and which ones are a good choice.
I hope that this thread and my experience will open up your eyes and guide you in the ideal way. If not, you will probably appreciate this after, it will only take you little more time
Alex
