How forex brokers cheat their clients

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Few days ago I chated with one of my facebook friends and the theme was the order executions. When I sow how his ‘forex broker’ cheats, I decided to write this post. In his case, pending sell order was executed 100 pips below the price, which can’t be explained not even with a slippage, but only with scam in my point of view.  After few sentences latter, I’ve asked him how can you be profitable at all, that’s simply impossible with such a ‘broker’!? On that question he admitted that he lost u huge amount of money lately or to be more clear, he lost the 90% of his account and it’s a pretty big account. Well, isn’t that surprise!?

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This is certainly a topic that brokers will never talk about, but is unavoidable if you want to be a profitable trader. I know, they all advertise themselves as a ‘best forex broker’, ‘#1 forex broker’, ‘awarded forex broker’, ‘true STP/ECN broker’, etc. But, the truth is far from what they claim they are. Most of them, no matter if they are really STP/ECN broker work against you for their personal benefit. Those brokers usually hunt stop losses, they increase slippage (example with my friend), they do re-quotes or delay execution and fill your orders at a worse price, they have different price, etc. Why they do that? The answer is simple, they win if you lose! How is that possible?

There is several things which can be important during your trading and most of them can strongly affect your performance, even the minor things which you are not aware at all. The first and the most important one is that your orders should always be executed directly in the intermarket and most of your orders never see that. They are usually executed by the ‘market-making broker’ (B-book), who has a benefit on your loss.  No matter that your broker claims that he is a true STP/ECN broker, that doesn’t mean that he realy is a true one. Based on regulations (licence), he can’t act like a direct market-maker, but what they do is that they send your transations to another entity for an execution, mostly to the market-maker, which is mostly owned by the same company.  How not to complicate this article too much, this is how that looks in the market.

Fake Forex ECN Broker

Well, there are some claims that more then 90% of the forex brokers deal mostly over the market maker and that’s what you should be worried about. I will not write any names of the potential ones who cheats or who are the real one, you should find that by your own.

But, if you trade forex seriously, you need to find the real broker who has his trading platform (MT4 or something else) connected trough a bridge  to one of the interbank trading platforms. I know, there will all said again, yes we have that, we are the real one. How you can recognize that they are not?

  1. When you placed your position and the execution is too slow
  2. When your SL is hitted and the price was far away from it
  3. When your order is closed way above or under your SL (slippage)
  4. When your pending order is executed far from the price (slippage)
  5. When you can’t close your order running in profit
  6. When the price is different from other (prime) brokers
  7. When you trade well and your broker is trying to disrupt your trading
  8. etc.

Swissquote IB 2018

This last one (7.) is especially dangerous and it’s common among the brokers, I can say that I’ve experienced that for few times as well during my career. You’re trading is going great and you make a lot of money quickly, but suddenly there is some problem with your platform, you can’t execute your orders, your statement is totaly disrupt, there is some strange withdrawals/deposits of your capital, etc. It’s not an accident, it is done intentionally to disrupt your psychology. After that you can easily lose your calmless and starat to make mistakes, your angry and you want revange… Well, they know that and how you will react on something like that. It means that you’re trading well and that you’re taking money from your broker, not from the market and they want to stop that! Believe me, it’s true. How many of you have experienced something like this?

For the end, I can say that the biggest problem are the SCAMMERS. There is so many brokers who are not regulated at all and you can have huge problem when you want to withdraw your money, earned one or even the deposit. Ever heard of that? Well, I am for so many times. My facebook friends usualy write me about everything and I see that there is so many forex brokers who are simply cheaters. That’s why you should be very careful when you experience something listed above.

Maybe there is something more as well, so do share your bad experience here in my blog, how to help traders around the world. Please do so.

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9 comments

  • Andrew
    May 28, 2018 18:29

    This is the highly informative content of forex trading practical situation. I appreciate your brilliant helpful article as there are numerous online forex brokers available online and chat with their clients in many tactics. It is said one click trade start but practically seen that it takes a more time to open the trade, and sometimes it cause a great loss of the trader, So, really it is very important to find a real broker at fast before registering to trade. But basically, it is very hard to find out the trusted broker from the huge brokers online, Here I would love to appreciate your initiative to share such kind of spamming aware article.

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  • beanfxtrader
    April 4, 2018 23:08

    Hi,

    I believe with good money management skills, your broker won’t cheat you.

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  • Forex scalper
    March 1, 2018 14:06

    Pozdrav i hvala na ovom članku, zaista jako zanimljivo. Imao sam dosta slučajeva koje nabrajate i kad odvrtim film unazad nisam bio ni svjestan opasnosti ni manipulacija sa njihove strane. Kad bi se žalio uvijek su se izmotavali sa odgovorima koji nisu držali vodu. Koja je vaša sugestija?

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  • seba
    February 18, 2018 23:18

    I ja bih pozdravio sve one, koji su imali hrabrost i raspisali se o mahinacijama brokerskih kuča. Dogodilo se, da sam radio na live računu 3 godine, imao cca 3200,00eur sopstvenih sredstava i kad sam se prijavio na seminar nazvali su me predstavnici brokera (fortrade ) i tražili da otvorim live račun kod njih. Na odgovor, da več radim kod njih na live 3 godine, dobio sam odgovor, da me nema nikde na spisku. Kad sam sledeči put razgovarao sa “mentorom” i pitao za ovaj slučaj, odgovori, da je bila greška kod njih. Kasnije sam izgubio račun, tog puta zbog sebe. Drugi slučaj dogodio se sada kod drugog brokera, slično kao opisuje (sox). Dosta puta, kad želim otvoriti poziciju, treba nekoliko puta da kliknem, jer me upozorava, da sam izvan kotacije, tako ide dosta pipa dalje, kad da poziciju na čekanje (buy ili sell) umesto da se otvori, ona se tada zatvori sa 0.Kada stavim SL zatvori se često prije a kod zlata nešto pipa preko, a TP ako zatvorim ručno (dogodilo se da je bio TP 35,00eur, kad sam kliknuo, zatvoreno je bilo sa 11,00) obrnuto. Nekoliko puta sam razgovarao sa predstavnikom brokera, pa sam dobio odgovor, da je jak signal i da sam bio tada na redu za zatvaranje pozicije. A sve to se dogodilo bez jakih izveštaja, da bi bilo od jednom jaka volatilnost. I još bi se našlo situacija, da pomisliš kako dalje. Da se ovakve stvari dogode koji put, ok jeste možda nešto, što kažu toliko klika pa postoji red, ali kada je to često onda…..

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    • Forex Trejder
      February 19, 2018 17:19

      FORTRADE je sigurno jedan od najvećih prevaranata u ovom svijetu forexa. Ja sam imao račun preko njih i prvo su mi dijelili besplatne savjete koji su potpuno bili pogrešni. Ulagao sam u naftu kad je padala, pa su oni zvali da nadoplaćujem račun sve dok nisam sve izgubio što sam uplatio prvi i drugi put jer nafta nije stala već nastavila padati. Onda su zamisli obraza rekli da imaju nove “prilike” a ja sam ih pitao jesu li to opet prilike za izgubiti novac kao prvi put? Pravili su se kao da ne znaju o čemu pričam, pa to su dno dna od ljudi. Koliko sam čitao po forumima to je bivši FXLIDER koji je zavarao na stotine malih također pa su pobjegli pod novo ime FORTRADE. Prevaranti i bježite od njih, čitaa sam da ne isplaćuju novac koji želiš povući po mjesec dana i navodno rade sa njim što ne smiju po zakonu. Bježite što dalje od njih.

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  • sox
    February 18, 2018 11:22

    Veliki pozdrav maistore,evo super clanak da budem iskren nism obracao paznju previse na te stvari jer obicno sve posvetim kretanju cjene tj grafa prilikom ulaza jer obicno trgujem na nekim vijestima ili dogadajima gdje je volatilnost dosta velika! Inace moj broker je AdmiralMarkets i preko njega sam u live vec trecu godinu od svega navedenog sam primjetio da kad zelim kupiti ili prodati jednim klikom misa nalog se ne ostvari ponekad istu sekundu nego za sekundu kasnije,tako da se nalog izvrsi sa nekoliko pipova vise 4 -8, ali to pripisujem visokoj volatilnosti! Isto tako kad postavim sell ili bay limit nalog on se ponekad ne ispuni tamo gdje je postavljen nego i po 10-15 pipova nize ali to je zato jer je nalog blizu potpore ili otpora gdje je volatilnost opet ogromna ,znao sam ponekad ostvariti i po 20 pipova bolju ulaznu poziciju nego sto sam htio poziciju a ponekad i obrnuto ! Jedna mi je stvar enigma ,jos uvjek ponekad otvorim koji nalog bez SL ali s malim SIZE npr 1 pip 1 euro i u 70 posto slucaj ako nisam stavio SL uspijem zakljucati 40-50 pipova a sa SL postavljenim cijena dode ,ugasi me i ode gdje treba!Mozda je to samo moja psiha a mozda i ima nekih kemija!Mario hvala ti sto si me potaknuo na razmisljanje o ovom samo nam jos fali da se borimo sa trzistem isa svojim brokerom,ludo a? L.P.

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    • Mario Urlic
      February 23, 2018 14:12

      Pozdrav sox,
      A slušaj, to sa SL-om koji ti skine pa potom krene prema tvom predviđanju nije pitanje brokera, već marketa koji živi od skupljanja SL-ova. (Iako učestalo skidanje u 1 ili 2 pipsa može biti unutar brokerske kuće i relativno varanje.) Činjenica je da veliki rade SL hunting u potrazi za volumenom, ali sa druge strane je jedini način njihove zarade na dnevnoj bazi (short term trading). Istina, trejdanje bez SL je puno profitabilnije ako radiš sa umjerenim pozicijama, npr. da ti 100 pipsova negativnog kretanja ne donosi više od 1-2% minusa na kapital. SL-ovi su oni koji prave minuse računima, jer bez njih nije minus sve dok ne odlučiš zatvoriti poziciju. Naravno, ako se trejda jako sa velikim rizikom, onda trejdanje bez SL-a može nanijeti prevelike gubitke i to nije poželjno. Meni je puno bolja solucija trejdanje sa manjim pozicijama, bez SL-a.

      Što se tiče ove teme, siguran sam da većina ako ne i svi FX brokeri (ako nisu Prime, a i oni to rade samo malo drugačije) koriste obje opcije, dakle trejdaju unutar i van kuće, B book i A book. Ako ne trejdaš dobro i gubiš, oni te drže unutar kuće jer na taj način oni zarađuju umjesto nekog drugog. To se može primjetiti ako te krene u određenom periodu, pa te onda oni žele na razne načine poremetiti u tom ‘winning streak-u’. Tu treba biti oprezan i ostati hladan na te pokušaje, zadržati mirnoću bez obzira na sve. Ako treba, čak i prestati trejdati nekoliko dana, samo kako bi zadržao ostvarenu dobit, povući sve na bankovni račun je najbolja opcija. Doživio sam to od strane raznih brokera i znao sam se poremetiti, te tako izgubiti većinu ostvarene zarade. Nitko mi ne može objasniti da su takve stvari slučajne, jer nisu sigurno.

      Također, kada ti sa slippage-om naprave npr. duplo veći gubitak nego si ti odredio. Trejder uopće nije svjestan koliko to poremeti njegovu psihu. Naime, samim ulaskom u poziciju ti određuješ rizik i gubitak koji si spreman prihvatiti ako krene suprotno od tvog predviđanja. No, ako je to npr. $2,000, a slippage-om si izgubio $4,000, ti ćeš lako izgubiti kontrolu jer ti psiha ne funkcionira zbog toga, nisi spreman prihvatiti ono što nisi odredio, zar ne!? Samim tim gubiš kontrolu i u većini slučajeva izgubiš na kraju dana puno više od tih $4,000, što te može potpuno poremetiti, čak i dugoročno.

      A vidi, FX je najvećim dijelom psihološka igra između svih aktera na tržištu, kako brokera, tako malih i velikih trejdera. Onaj tko je psihološki stabilan i savlada tu ‘igru’ na pravi način, nosi novac sa tržišta. Onaj koji ne može savladati sve te prepreke zbog psihe, gubi na kraju. Znamo da su ta većina gubitnika mali trejderi, koji jednostavno ne mogu podnositi gubitke zbog, većinom prljave igre od strane velikih igrača i brokera zajedno. No, to je forex. 🙂

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  • Nac
    February 17, 2018 17:03

    Hi
    What brokers do you recomand? (I live in south Europe).
    I curently use AdmiralMarkets – any opinion?

    Thank you

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    • Mario Urlic
      February 23, 2018 14:29

      Hi Nac,
      Well, I don’t reccomend any of them, they are mostly the same regardless to this subject. I trade with couple of brokers, but they all have some nasty things related to this issues. What you need is to notice them that you are aware of this things are happening and that if that happens to you oftenly, you will change the broker. It’s good to point them out all the things which you notice that are not as it supposed to be.
      But, if you want really a good broker for you personally, in my point of view, “Swissquote Bank” and “Interactive Brokers” could be the best choice.

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