Reality of FOREX: my experience with brokers + share yours

I welcome all Forex Factory visitors, my name is Alex. Even if I usually don't contribute to forums, Forex Factory changed my mind. I consider FF as a great and valuable community that is not influenced by brokers interests and that is free from fake brokers posts (one of a few). So I would like to share there my experience too I believe that this will be eye-opening and useful for other traders.

Lets start with a little about me. I trade forex for more than 9 years and approx the 4th year I am able to trade it profitably. You are probably thinking that I am not so successful if I was the whole 5 years unprofitable. And maybe you are correct, because some things and connections just needed more experience to explore. But after the long 5 years I was able to put together all the puzzles called forex and finally I was able to see all the principles and how it really works.

Now you will probably expect that I will be writing about psychology a lot or how the right trader thinks or that I will write about some holy grail trading strategy. To be honest, this is not what forex trading is all about!

Do you really want to know what long-term forex trading and the whole puzzle called forex is all about?

My long-term success in forex is based on two things:

1. The right money management (this part is extremely important)
2. The right broker (simply without the fair and high-quality broker you will not be able to make any money)

Let's start with money-management. The money-management is as important to traders as a water for fish. If you don't have a strict, quality and mainly safe money-management model, you don't have any long-term chance! In my life I already met hundreds of traders who just lost everything, because they simply risked too much.

Think about it is it possible to trade 2 lots (200 000 of EUR / GBP / USD) with just a few bucks on your account? Unfortunately, in today's market, yes. It's called financial leverage and traders are told that it's a great tool to start with a small deposit and have a potential to great profits. But psychology together with high leverage is simply a gun that will explode in the hand's of each trader who will over-leverage his account and his orders.

Also think about how banks and other institutions make money in normal trading let's not think about some insider information trading or HFT that is not available to us (it's even not available to all institutions). So it's all about managing money then.

My first lesson is to always risk only the amount that is acceptable in comparison with your account's value.

The second extremely important part of trading is choosing the right broker. To be honest, if I would tell you only 10% of how the whole brokerage business works, you would be thinking that I am a psychopath or sci-fi writer. However, the main goal of this article is not to discourage you, but to help you.

There are simply two types of brokers:

1. Those who will take all your money (your deposit = the whole profit for these cheating brokers)
2. Those who need profitable long-term traders as they profit through spreads / commissions only and they are providing the real market liquidity

So to be able to survive in the market full of sharks, choosing truly fair and quality broker is needed. Everyone would be probably able to shout at me tens or even hundreds of brokers, but we would be able to count together the fair ones on fingers of my hands.

And believe me, I've been already trading with a lot of brokers and experienced a lot of bad / cheating practices as well as good ones. Now I would like to share my experience and tell here which brokers you should definitely not trade with and which brokers are based on my experience safe to trade with. I'd also like to invite other traders to share their experience (real accounts only!) and I'll add your experience and notes to this first post. I'd like to create something like database of broker's notes / experience and table of serious vs. low-quality brokers.

Before that, let me save you some money and answer how to recognize the low quality brokers? Their websites are usually like in the supermarket. Bonuses, discounts, cheap texts and graphics everywhere. The cheapest and most cheating trick of today's brokers is % deposit bonus. Remember, that no one will give you anything for free and in case of brokers this applies as well. Similar brokers will never allow you to earn.

These brokers also almost don't talk about the most important factor which are trading conditions. Some of them talk about zero spreads, but this is the second catch. Far more important than spreads is the real orders execution slippage, latency, speed, stability etc. and the whole trading technology and broker's liquidity providers.

Let's start with the brokers database.

Brokers that you should definitely avoid and reasons why:

IronFX (ironfx.com) huge % deposit bonuses, huge financial leverage, traders repeatedly cheated by huge slippages and not processing withdrawal requests for several months.

HotForex (hotforex.com) huge % deposit bonuses, huge financial leverage, their zero spread revolution is another scam due to their terrible orders execution. There are also a lot of IB partners, because they pay up to $15 per every lot.

InstaForex (instaforex.com) this is a huge scam especially in Asia. Again, % deposit bonuses, countless contests and rewards. A lot of trader's deposits stucked with InstaForex too.

Markets.com they will call you every single day if you will provide your real account to them. They will also let you know when to buy or sell and how to loose everything and bring profits to their b-book :-) They are usually recommending to trade without Stop-Losses. Again, they use some simple scamming offers like % bonuses and no-deposit trading.

FXDD (fxdd.com) previously based in New York and US regulated, then moved to Malta due to fines from the US regulator. They offer binary options (so called casino forex trading), they usually have some bonus time-limited offers and their technologies are very poor especially when talking about slippages.

Saxo Bank (saxobank.com) cheating broker with banking license one of 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 now more enforcer than broker is they are trying to get all the losses they artifically created by themselves from traders.

XM.com quite new player in the game. They buy banners everywhere and offer no deposit trading, % bonus offers plus huge payouts to their IB partners. The same music again and again.

FXPro (fxpro.com) they look like serious and reliable broker, they promote their technologies, regulation etc. They have two MT4 instant execution accounts where they profit from trader's losses. And one floating spread market execution account which isn't any better than their market making accounts. It's very probable that the market execution account is connected to one b-book owned by FXPro. Their 1:500 leverage is also the proof that you can't trade on the real market.

XTB (xtb.com) XTB not a long time ago guaranteed the level of Stop-Losses, why? Because they didn't send any order to the real market. So I traded fundamentals with them and made a very nice return with them. But what I expected happend, XTB called me that they are closing my account. This simply proves that they profit from loosing traders and that they don't like profitable traders.

Oanda (oanda.com) was one of the better market makers and traders were satisfied with them. But something went wrong with them and their services are now worse and worse. Their execution is terrible and their spreads can multiple by 10x times without any problems. Simply slippage and spread will kill any trader in the long-term with Oanda.

FXCM (fxcm.com) they are a story on its own. Just a few examples that talk for everything: FXCM UK Announces $16.9 Million Settlement with FCA for Asymmetric Slippage, NFA fines FXCM $2 million for slippage malpractices etc.

FOREX.com - GAIN Capital - I personally dont have a real experience with them, but traders over the Internet are reporting closing their accounts in case that they made some profit. Also they pay their IBs up to USD 500 per every qualified referred client which is not usual in comparison to standard profit share that offer professional fx brokers.

Z.com - FCA regulated, but doing a lot of business in Japan too. They offer % deposit bonuses, fixed spreads, big shares to their IBs (up to USD500 CPA). In their legal documents you will find 100 USD maximum limit what one can maximum withdraw from profits.

OctaFX - they close profitable accounts of traders without giving a valid reason for closing accounts. They are offering 50% deposit bonus. Also based on their IB / affiliate program, they offer up to 15 USD per lot to their IBs (like 1,5 pips - so the main stream of their profits are not spreads / commissions, but their b-book and traders losses).

ETX Capital - they offer binary options and huge shares to their IBs. There are scammed traders by ETX posting over the Internet - one of the scammed traders can be seen here (and his other post here). Also the video in this post proves what happens when you start making profits with ETX. More scammed traders by ETX are in this thread.

Synergy Financial Markets - Australian based broker who claims to be STP / ECN. However, they seem to manipulating the market and hunting traders orders - you can see this in the posts here, here and here. More traders over the Internet are reporting problems with them.

Plus500 - this broker probably doesn't need any further comment. I personally don't have never so much courage to trade with them. From what I've heard, they even don't open real accounts connected to some liquidity providers and traders are only trading on virtual accounts connected to live servers. Traders are reporting that they remove money of traders from their accounts, don't send withdrawals etc.

Alpari - their UK branch went bankrupt during the SNB event. Here is the thread about price manipulation and SL hunting by Alpari. A lot of traders over the internet are reporting that Alpari is a scam.

FXPRIMUS - they are offering 100% deposit bonus and huge 1:1000 leverage. One of FF members is warning against their bonuses here.

DMM FX - warning against this originally Australian based broker - they closed their business in Australia and are trying to offer services in Japan. One of traders here warned that they have pretty bad execution of orders (here). Plus you can see this thread how they were scamming other traders - like penalizing traders who are using EAs by widening spreads etc.

A few more bucket shop brokers mentioned by "yesyoucan" here.

More come to the list soon.

On the other side, reliable and quality brokers are interested to have as many profitable traders as possible, because they profit from spreads / commissions only and the counter party of your trades are always different liquidity providers of the broker. They also improve their trading conditions, trading technologies, they always provide direct access to the market without any interventions, they provide high deposit security and especially have a great orders execution with both positive and negative 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 to Purple Trading (purple-trading.com), and their new license allowed them to add some services for money managers and investors.
I personally have the real account with this broker with the highest deposit. The broker is less known as they don't invest to advertisement that much. As I trade a longer time with them, I experienced significant technologies and trading conditions improvements which increased my belief in Purple Trading being a reliable brokerage. Based on my opinion they have currently the best technologies and very good orders execution. For me, they are number one for my intraday trading.

Swissquote Bank (en.swissquote.com/fx)
With Swissquote, it's little bit more complex. There is Swissquote Ltd. based in London. Then there is Swissquote Bank Ltd. based in Switzerland and holding a banking license. I personally have an experience with Swissquote Bank Switzerland, they have high quality technologies and I really like their banking license / security. They were always fair and open to me. It is a huge company with huge capital. So I have to say that they are doing a good job too.

JFD Brokers (jfdbrokers.com)
Cyprus based brokerage with fair approach to traders. They have good trading technologies and trading conditions. For me, they are not the number one and they are also surely not the number one in the world, but I like their approach and they are surely a good choice in comparison with other dirty brokers mentioned above.

Interactive Brokers (interactivebrokers.com)
US traders have a very few options to choose from when they are comparing the brokerages accepting US traders. I don't have much experience with IB, but I consider them to be a good option for US traders. But I would be happy if you confirm or disprove this based on your real experience. You can read more detailed review here.

LMAX (lmax.com)
Based on traders reviews here, LMAX is also a trustworthy broker and a good option to consider. However, LMAX requires higher minimum deposit that doesnt have to fit some traders.

Then there are some Prime Brokerages, which usual retail trader can't afford they have huge minimum deposit requirement and set limits how much you have to trade every single month and cancel your account if you trade less. So for me the above options are currently the way to go.

Traders can easily verify which Cyprus licensed broker (it's possible to check with other regulators too) is a MM or STP, by simply checking their license type. You can read more here (plus important add here).

My second lesson is that Without fair and reliable broker don't even try to trade, as you don't have any long-term chances.

Now it's your time, I would like to invite you to share your experience with both fair and bad brokers. Please always provide as much details as possible and share your real experience from real accounts only. If appropriate, I will add your experience and notes to this first post. Let's help and save money each other and tell here which brokers traders should definitely avoid and which ones are a good choice.

I hope that this thread and my experience will open your eyes and direct you in the right way. If not, you will probably appreciate this later, it will only take you little more time

Alex

So Interactive Brokers does not offer forex any longer. You state, and I completely agree, Oanda and FXCM should not be considered options. That leaves Forex.com. That's all for US residents. I personally trade with a high leverage, non- regulated broker but with only 20% of my forex trading capital sitting at the broker. Been withn them for 3 years with no issues whatsoever. Withdrawals arrive in 3 business days. To me, that's the advantage of high leverage, I hold on to most of my trading capital in my own bank. So given these facts, would you recommend a US resident simply stop trading , trade with one of the horrible selections the US offers or go offshore ?

TradingLife: Hi, I agree with your opinions, sad but true. There are very few retail forex brokers worth using. I haven`t used to many of them, still the picture is pretty clear.

That is why we see the increased focus on the branch by authorities. In the long term this should be positive, because many of the brokers won`t survive with their current business model if regulating authorities decides to increase surveillance of the branch. Either the lousy brokers are out of business or they have to straigthen up.

For recommending brokers I have one I would recommend, even though they have a rather stiff minimum deposit requirement. That broker is LMAX. For my experience with them they are top notch. No bullshiting and professional to the bone. If you are a retail trader that want to deposit a bigger amount and do not want to worry about the broker this is the broker to use.

Also, I am currently testing an account with Darwinex. So far so good, still need more time with them before I can be able to recommend or not.

Threads like this is important. Hopefully newbies read through this, not to follow our advice on brokers to use, but to increase their awareness of how important it is to choose the rigth broker and understand that there are a lot of brokers not even worth considering..

All broker is good, if they pay me ...... You have experience with many brokers and now you play with Axiory Global Ltd. is licensed and regulated by the IFSC Belize??????? . Are you IB or something????

I have accounts at LMAX and Interactive Brokers:

LMAX is an excellent place to trade, their software package is complete, easy to use and provides advanced analytical tools. If you are able to open an account with them...this is the place to be.

Also, I have opened an account with Interactive Brokers, their software provides a lot of information. New users should use their demo software and review all their Webinars due to the number of software options.

- Low cost (excellent)

- Choice of financial products, more sophisticated traders seem to be happy with the system.

- I trade manually and have algorithms with them, new traders need to learn the system so they are able to diagnose problems if they occur.

- Selection of APIs, private lines, dedicated servers: IB along with other brokerages share relationships with Verizon, Att, CenturyLink (US) providing a seemless connection and increases a traders cost but adds to the internet line security, execution etc.

- Charting
- we are in the 22nd century and the charting should reflect sophistication, more advanced tools, Elliot, Gann, Luca, Fibonacci --- are not available (Fibonacci retracement is available)

- Historical data is limited

- Aggregated data feed: Data aggregation is a component of business intelligence (BI) solutions. Data aggregation personnel or software search databases find relevant search query data and present data findings in a summarized format that is meaningful and useful for the end user or application. (some people like it and others do not)

I.B. aggregates their data feed to reduce Internet band width.

Advantages: (For traders who are understand how to extract information out of large data sets, this gives a more accurate picture of price in time)
1) Queries on large amounts of data that are eventually going to be processed into some form of an aggregation are much faster if aggregate data already exists.

2) Aggregate data can provide a feature rich data set, with reduced dimensionality when being used in Machine Learning for predictive modeling etc.

3) Aggregate data could open doors to patterns and trends, by way of analytics which normally would not be visible without long running, memory intensive queries. Aggregate data sets being generated via Map Reduce Jobs or other scalable mechanisms, pull in data from different sources and provide a clean, big picture overview for projections.

https://en.wikipedia.org/wiki/MapReduce

Disadvantages:

- Software: High performance trading applications written to present tick data sometimes have issue with IBs aggregated feed and API. This does not apply to all software vendors.

Personal Opinion:

I had some trouble getting use to the aggregated feed, the lack of available analytical tools.

Now, what I save in cost overall has allowed me to purchase other tools required for indepth data analytics. (Deep Dive)

Being a US trader with larger interest in Foreign Exchange, (We also trade Futures, Future Options, stocks, bonds and management of a small global portfolio) based upon the reported number of traders/gains, I chose I.B.

I trust statistics, numbers do not lie.

If anyone has any questions regarding LMAX or IB, please forward and I will answer within a couple of days.

IB now requires 10 million in net worth to trade forex as US regulations force yet another broker out. Wish I could trade with LMAX, but my nanny won't let me.

Okay, okay. First, let's be reasonable. You're saying XM is bad, and conlude InstaForex as a scam?

InstaForex, their verification is very complicated and they require many documents in order to withdraw from your account first, but I've deposit $100 and I'm not s$$$$$ with you, they let go my profit and deposit. I used their 30% Bonus too, but couldn't withdraw it. Their execution is bad, takes 7 seconds to open a trade, but you can use Take Profit to close your trade for less than a second. At least that's what I've experienced.

Second, I have to admit that they some fishy sentiments in their Terms & Conditions, like, you can not earn more than your initial deposit if it reaches 10%, and that itself is a scam sign most people would call, but I don't agree.


Let's talk about XM. Can't a broker make a name for themselves and advertise their welcome bonus everywhere? How will they ever reach customers then, or do you not like it?

Second, They have very high spread but their execution talks for itself. Its less than 0.90 seconds and I didn't encounter any slippage with them yet. Withdrawals didn't take more than 2 days. So I wouldn't mark such broker as ''avoidable''.

i trade dirctly on FXall's interbank platform, orders are then API-ed to MT4 brokers. if pricing/spread differs above my set tolerance, no trades executed.

not all will have the opportunity to get interbank platforms, unless you are serious about trading and know what you are doing.

so couple of brokers which i recommend, mostly based in AU.

VantageFX
AxiPrime
IC Markets
Pepperstone
Global Prime
FP Markets
Invast

these brokers are all dual models, meaning they can run A/B book.eitherway, it doesnt matter as they are well capitalized(in excess of 20 million). I make it a point to purchase their audited financial statments from ASIC. - drop me your email, i can forward em to you. save yourself bout 90 bucks each.

ASIC has recently started to require brokers to submit daily trades to trade repository, so the possibility of them manipulating charts is now not even possible

I have been using FXDD since 2008... withdrew over USD 6-figures... need to manually fill up a redemption form.

For XM... just used for less than a year... withdrew USD 6-figures too... very good spread. Fast withdrawals.

Most traders failed not because of the broker... that's what 95% of loser like to blame on.

Check your trades. Improve it. Period.

Trading Life posting is good for forex starters . But shouldn't count as recommendations . One should do lots of research himself . Such post of Traderslife similar to guest blogging technique where He found most of Negatives but what he recommends really weird . Putting Axiory Europe and Global is somewhat provoking new traders to open their account there and yes Smart Marketing idea too .

Agreed. But you have to admit, they have fabulous website design and Client cabinet.

I am not personally from US, but I felt that choosing a good broker is a real issue for US traders, so I covered it in my post. You probably agree that Forex.com should definitely be among "avoid" brokers, I will add them there soon. If I would be from US, I wouldn´t like stop trading, even if that´s something what the US officials probably want to. I would definitely not trade with the horrible ones, so that leaves the last option - to go offshore. But it´s pretty risky too, so I would take forex as a diversification only - exactly as you wrote - and hope that the situation will get better there.

Thanks for your post and confirming my experience. I will add LMAX among the good ones as I already see the post of "Galexandr" who has the same experience as you. I would be happy if you will let us know how Darwinex is performing, they are new in FX and I thought that they are much more focused on investors than traders, so they require a lot of real testing. But so far they are looking trustworthy.

No, I am not. I trade with Axiory Europe, you can see one of my accounts in my explorer and I don´t push anyone to anywhere. But I´ve heard that their Global branch has the same technologies / liquidity and falls under their group, so that´s the reason why I mentioned it. I am not sure why there is so much offense from you, you can see in the posts above that others confirmed my experience. And no, not all brokers are good, maybe they pay the rest of what you lost, but the bad brokers will cheat you on every single trade that you will open - well for now, just read the last sentence of the first post and relax

I have traded with XM for over 5years now, and hotforex, and do they pay - yes they do, and in time. That's what i would want from a broker, pay me when i want to be paid - for the issue of bonuses and credit - maybe its a marketing gimmick to get more clients and huge leverage to tempt us greedy and amateur traders - truth it works because am sure many of us have fallen to it - but is it their fault? I don't think so - all these brokers allow me to adjust my leverage to 1:1 - they give me the choice to accept or not to accept their bonuses - at the end of the day a trader is responsible for their trading success or failure not the broker - the brokers to avoid like you mention are the cheating ones - your deposit and profit, IMO

Thanks for your complex review. I will add a link directing to your post to the list of brokers in the first post.

Thanks for your valuable post. But I don´t understand why you disagree with Instaforex marking "definitely avoidable" while you are confirming that they are 100% scam. The 10% rule in their Terms & Conditions is just something terrible - they officially tell you that you can trade with them but can´t earn with them - even casinos would pay you more than Insta So Insta should definitely stay there.

Regarding XM. To be honest, I consider forex trading as a serious business and investment. Deposit bonuses and similar suspicious offers come from casinos and sport betting, you will see there bonuses everywhere, no-deposit trading etc. everywhere - it has nothing to do with a serious business and investment. Deposit bonus is something that will artificially increase your deposit, so traders are more aggressive, but in fact they are loosing their own deposit much faster - meaning faster and bigger profits for cheating brokers. Also just click on their "partnership" button. They pay up to USD10 per lot, plus some % if you introduce other introducing brokers. Just answer for yourself, how they could make so much money then?

Thanks for your nice post! I was with IC and they are above-average broker, but left them due to their bad execution - probably I wasn´t switched to A-book yet. Vantage looks like a good broker for serious traders on one side and also a broker for "casino traders" with their binary options - I think that binary options have nothing to do in the offering of professional broker. I don´t have much experience with other brokers mentioned, so I can´t judge.

Thanks, but FXDD definitely not. I traded with them a few years ago when they offered trading without any costs (purposed for b-booking orders and for loosing traders) - made a very nice profit in just one week and then they closed my account immediately This happens when casino loose its advantage (spread / slippage) Also NFA fined FXDD repeatedly for unfavorable slippage. Regarding XM I´ve answered above.

Definitely, everyone should do a research on himself and if my posts will initiate the research, then it´s enough for me Also everyone should choose the broker who will suit him and his trading strategy the best, but traders should be aware of a lot of cheating brokers and sharks who are just waiting on them. I am also opened to the real experience of other traders - as you can see in the first post, I´ve already updated the list. If you have any better idea how to handle the first post and the list of brokers, just let me know The good brokers that I wrote about are not a recommendation, but sharing my experience and opinion - you can see one of my trading accounts in the explorer here.