So you wake up in the morning, check out your positions and find out that your position was closed – your pair reached the stop loss and the position was closed with a loss. You think that “you win some, you lose some”, and in this case you lost. But wait. Something is wrong this time. This time it’s not the crazy market or your bad position. It’s different. Here’s is something that happened to me, and I’m sure that also to some of you.
You look at the forex charts, verify that you correctly correlate the hours, the price and the stop loss, and you see that the market never got close to the stop loss point. You check another chart provider, but you see the same numbers.
So you call your broker. It’s a forex online trade, and calling your broker isn’t something usual, but you do it. They are very nice to you, listen to you and promise to check it out.
They get back to you with “good news” – it really was an error. You’re right! We’re putting your position back in place. You didn’t lose money. Great! You were disappointed to lose money and now it’s a great relief.
Not so great
Is this a one-time event? Wait. This didn’t happen before, but why did happen during night time? Does the market act in crazy ways during the night? Not necessarily. Not this time. It’s the broker.
Are you sure it would happen during the day? What would happen if you didn’t check out the prices thoroughly? Was it an honest mistake?
Or maybe it’s hard to trust them. You already wasted time and pain seeing the loss, checking it out and talking to them. You’ll waste more time from now on since you don’t trust them.
Intuition is right. Say goodbye to the broker.
The methods of brokers vary significantly. Some of them honestly widen the spreads when necessary, depending on market conditions. Others move the spreads more “creatively”. This creative energy doesn’t benefit the trader.
Some market makers don’t really make money on the spreads and don’t really want their traders to win and stay longer. They see the customer’s deposit as their profit and move to take over it. Beware!
There are good brokers out there, and the regulatory bodies in many countries are getting better at catching forex scams, but there are still too many problematic methods used in this market.
Don’t burn your account because of the broker. Get a better one.
Further reading: 7 Ways to Avoid Forex Scams.Get the 5 most predictable currency pairs