MG Forex At Risk ? | Forex Factory

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MG Forex At Risk ?

  • #1
  • First Post: Jan 11, 2008 7:54pm Jan 11, 2008 7:54pm
I trade with them and no complaints so far, except the fact that when you take a look at their financials on the CFCT website, they have only 300k over the new minimum requirement of $5M. That's VERY close, and I do not like it one bit.

If they have more then they better show it soon. A few months ago they "magically" went from 2m to 5m as soon as the new rules were announced. So I assume they got it somewhere...it would just feel much safer to actually see it. Otherwise I'll close my acct 'cause there's no point of trading if your money is at risk...
"Lunch ? Lunch Is For Wimps !"
  • #2
  • Jan 12, 2008 12:16am Jan 12, 2008 12:16am
Quoting MrFuture
A few months ago they "magically" went from 2m to 5m as soon as the new rules were announced.
Isn't it a good sign that a broker wants to comply with the new rules?
sans peur et sans reproche
  • #3
  • Jan 12, 2008 2:50pm Jan 12, 2008 2:50pm
Quoting ilanr
Isn't it a good sign that a broker wants to comply with the new rules?
Of course it is, yet you wonder where did it come from, and why wasn't it always there in the first place. Aren't they supposed to always show how much they really have, regardless of what the min. requirements are ? Can we really trust the CFTC report then if apparantly brokers have different amounts then what they show ?
"Lunch ? Lunch Is For Wimps !"
  • #4
  • Jan 13, 2008 10:31am Jan 13, 2008 10:31am
I was looking at GFT's website and I really like it. I might go with them, you can tell they have more capital and resources, plus according to the CFTC report they are loaded with $$$$$.

I'll give them a try with the demo and then I'll make my move
"Lunch ? Lunch Is For Wimps !"
  • #5
  • Jan 14, 2008 4:38am Jan 14, 2008 4:38am
Quoting MrFuture
I was looking at GFT's website and I really like it. I might go with them, you can tell they have more capital and resources, plus according to the CFTC report they are loaded with $$$$$.

I'll give them a try with the demo and then I'll make my move

WOW, you used MGFOREX to promote your company "GFT" , Soooo underhanded...GFT must pay you well
  • #6
  • Jan 14, 2008 5:11am Jan 14, 2008 5:11am
Quoting mike999
WOW, you used MGFOREX to promote your company "GFT" , Soooo underhanded...GFT must pay you well
Dont be too fast labeling people as spammer...
  • #7
  • Jan 14, 2008 6:46am Jan 14, 2008 6:46am
Quoting MrFuture
Of course it is, yet you wonder where did it come from, and why wasn't it always there in the first place. Aren't they supposed to always show how much they really have, regardless of what the min. requirements are ? Can we really trust the CFTC report then if apparantly brokers have different amounts then what they show ?
The net cap is (from what I understand) supposed to show an amount derived by formula to show they can reasonably meet their obligations in a pinch. Almost any private business will make a decision as to how to allocate their monies. Some show far more because they want to, others (usually smaller companies) choose to spend their money elsewhere in order to build their business.

So while you should always treat a rapid increase with a grain of salt, it may be that company was reinvesting in their business to grow the business.

I think the problem is, most people don't really understand what that net cap number means (myself included) and how its derived, so they assume its straight-up liquidity. That isn't the case according to the NFA guidebook, so we need to be careful before making the assumption that an increase to the new net cap = some indication of fraud.
  • #8
  • Jan 14, 2008 7:15am Jan 14, 2008 7:15am
Quoting mike999
WOW, you used MGFOREX to promote your company "GFT" , Soooo underhanded...GFT must pay you well
Then I must be working also for FXsolutions 'cause I am also considering them as an alternative.

Think whathever you want, really I do not care. All I know is that MGForex is been really good to me and I would hate closing an account with them, but financials are important.

What I really hate is that no other borker seems to offer the nicest of all MGForex's feature, which is Flexi Trade, where you can change anytime you want, right from your platform, the size of your units. Other brokers want that everytime you make a request for that, which is pathetic.

I am still uncertain on what I am going to do, I would love it for MGForex to show some more $ if they really have it. One thing is for sure though, they have less than $20 Milllions, and I can say that 100% sure 'cause just a few weeks ago they were forced to go from their usual 400:1 leverage to 100:1. New NFA rules allow for 400:1 levergae only to brokers who have more than $20 millions....
"Lunch ? Lunch Is For Wimps !"
  • #9
  • Jan 14, 2008 11:15am Jan 14, 2008 11:15am
I've written an email to MGForex regarding the topic...no answer yet. As soon as I get something I'll keep you guys posted....
"Lunch ? Lunch Is For Wimps !"
  • #10
  • Jan 14, 2008 5:15pm Jan 14, 2008 5:15pm
They got back to me. They redirected me to an interview that the CEO of MGForex did with fxstreet.com. This is what he says regarding not showing all the money:


"MG will have no difficulty accommodating this change if the proposal does pass. MG Financial as a group has ample capital to satisfy the new Net Capital requirement. Retail FX is just one part of the group's business and a reallocation of investments has already been initiated. Already as of the end of July, MG has increased its Net Capital to be in excess of the new proposal. This proposal to increase the Net Capital Requirement came out in the middle of June; however, the basis of information that caused the panic is the two months old Financial Reports (as of April 2007) when MG had over 120% of the requirement at that time. MG has always been above the Net Capital Requirement as set by the NFA but there is no reason to have more cash tied up than 120% of Net Capital to satisfy regulatory requirements. One needs to understand that in running a multi-faceted company, it is not prudent business practice to tie up capital for regulatory reasons just for “show”.


What do you guys think ? I mean, I get the part that he only wants to show whatever mnimum is needed to meet the new standards, BUT, this still makes me think that they do not have that much $$$, 'cause otherwise why would then the other brokers show all their millions ?

I don't know...it kind of looks like an excuse to me.....what do you guys think ?
"Lunch ? Lunch Is For Wimps !"
  • #11
  • Last Post: Jan 18, 2008 8:52am Jan 18, 2008 8:52am
Quoting melpheos
Dont be too fast labeling people as spammer...
This is legal advertising, not annoying spamming, big difference
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