Not all forex brokers were born equal. Some will play dirty tricks to drain your account without being typical scammers. Here’s ascenario that happened to me and to many others.
This should ring all your bells. There is a solution: take your business elsewhere.
A scenario that can happen to anyone
Your make up in the morning, check out your forex account and discover that your open position hit the stop loss point and was closed by your broker. This can happen. The market moves 24 hours a day and your pair could have moved in the wrong direction.
When you look at the charts, you notice that the market was never at this point. Your position should not have bounced! A quick call to your broker and they tell you that they’ll check it out.
When they call you back, they say “Oops, that was an error. We’ve reinstated your position”.
The anger
On one hand you’re glad that you didn’t lose that trade,at least not yet. But then the anger starts boiling inside. If you weren’t on the watch, the money would be gone. You were on the watch, but you might have acted differently on the position. You wasted time on finding the error, the phone calls and the aggravation.
Then you forget about this specific position and begin thinking: what if they already did this to me and I hadn’t noticed. Will they do it again? (Probably so). Will I have to be alert all the time?
Such brokers do it occasionally to everybody. In many cases, there isn’t a big gap from the real market levels and the stop loss – such cases are harder to catch. They can spread the spreads in a creative way – creative for them and a loss for you.
Such brokers don’t live off the spreads, but on the money you deposit. They rarely pass on the deals – they just wait for the customer to lose all the account. And they find creative ways to “encourage” a quick loss of the account.
They don’t do it in their forex demo account – you succeed in demo trading, deposit money and then start losing. It isn’t always the trade psychology that brings you down – it’s the broker.
Solution
After you’ve calmed down, the solution is simple. Close all your positions with that broker, withdraw what’s left and take your business elsewhere. You deserve a better broker.
Don’t lose all your money in that account and blame the forex market. There are better brokers out there. Those who are more transparent are probably more reliable. Those who are gated should be suspected.
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7 Comments
Good post.
I only use my broker for execution and do my analysis and monitor price with another service. This way, you are sure to know it went strange things happen!
Good note, regards
One must indeed be careful in choosing brokers. I used to trade through a “dealing desk” broker until I learned that ALL DD brokers take the opposite side of their clients’ trades. So they and you (as the client) inherently have a conflict of interest. Today, I trade through an
STP (straight-through processing) broker. They do charge a 1/2 pip commission but don’t have a dealing desk and don’t take the opposite side of my trades – they pass trades directly to their liquidity providers. I highly recommend all traders go to an STP or ECN broker.
i’ve heard of this happening with a particular broker, hitting stop loss when there were no spikes on other platforms… but so far i havent seen any prof…
maybe we can start publishing the names of these brokers?
Thanks for all your comments! I had this trouble a few years ago with a small broker. I don’t know of any big names that do it, but no one is perfect…
No broker cares about your money the way you do. You are just a profit center to them, like a hundred others. You lose, you leave, too bad, there are a million other suckers out there.
No doctor cares about your health the way you do. You die, too bad, etc.
Do your own homework, or be at the mercy of “experts.”
My pet peave is, once these individuals are foind out to be the crooks they are, WHY, haven’t the the government ALREADY prepared a resolution, for such behavior?
A law, by real lobbist, should be in play, for such individuals!
This is really greed and/but DUMB business practices, for as the saying goes, “the customer is always right”.
With that, it makes common sense, to think, as long as a customer is respected and see that his/her broker is worker FOR him/her and NOT against him/her, they will be honored to continue to do business with them.
No one, in their right mind, wants to do business with someone whom they KNOW, is stealing from them, but a fool and as hard as times are today, there are even LESS “fools”, in the world today!
GREED, is NOT being prosecuted as it should, for these people feel that if they get caught, they will just pay a bail bond, and restitution and the rest of the monies that they have stolen, is scott free!
This is why the LAWS needs to be UPDATED, UPDATED, UPDATED!