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Broker reverses $20K winning trades for alleged latency arbitrage

  • #341
  • Nov 4, 2014 7:19am Nov 4, 2014 7:19am
Quoting Abcxyz77
{quote} Sorry, but can you explain "hedged", what does it mean?
fxcm mean they buy from you, then sell to another trader, that's a hedge, risk free, it is over the counter. although they are not good too, at least they claim that.
forex.com don't hedge, you lose means they win, vice versa. same as casino do
  • #342
  • Nov 4, 2014 7:48am Nov 4, 2014 7:48am
Quoting localjuju
Ff is aiding and abetting fraud, that's indirect fraud. the list is endless, liteforex, instaforex, fortune forex etc, they are all rogues
I hope you put off your statement about one of broker that you have been stated. I've making money in Liteforex since 6 years ago. So far its good and very responsible broker. I was remember when Liteforex server got error due to maintenance, all loses and profit order paid by liteforex with enclosure the log file of our metatrader. I had lost about 20k and they paid me..
When LR collapse, liteforex still paid their clients. salute for for this broker....!!
  • #343
  • Nov 4, 2014 9:20am Nov 4, 2014 9:20am
Quoting yunben
{quote} fxcm mean they buy from you, then sell to another trader, that's a hedge, risk free, it is over the counter. although they are not good too, at least they claim that. forex.com don't hedge, you lose means they win, vice versa. same as casino do
How do i know a broker is hedge or not? Is Oanda hedge? It's mean they trade against customers, I thought NFA don't allowed it
  • #344
  • Nov 4, 2014 11:03am Nov 4, 2014 11:03am
Quoting Abcxyz77
{quote} How do i know a broker is hedge or not? Is Oanda hedge? It's mean they trade against customers, I thought NFA don't allowed it
It is entirely at the discretion of your broker.
When you open a trade your broker takes the other side - unless they specifically say that they do not do that.
Some brokers match your order against other orders in their system from other traders (Oanda used to do that IIRC), and that is fine.
Some brokers feed your order straight out into the interbank system, those brokers are usually called ECN or possibly STP brokers.

Some brokers are happy to accept micro-lots.
Those brokers either take the other side of the trade, or match it against other micro-lot traders trading in the opposite direction.
Such brokers may hedge those positions by aggregating them into bundles that can be traded in the interbank system.
If you trade microlots your broker will not be happy with you scalping, because they cannot de-risk their side of the trade.

edit: your broker's terms and conditions (usually takes a full day to read) will tell you in un-simple English whether they are the counterparty to your trade. Remember that even if your broker does take the opposite side of your trade that does not mean that they are bad, it is their choice.
Carbon-Dioxide: the gas of life! https://youtu.be/ttJBdr6eBuo
  • #345
  • Nov 4, 2014 11:42am Nov 4, 2014 11:42am
I'm surprised someone with a $200,000+ account chose forex.com as their broker. I thought those guys were just for newbies. I started with them 7 years ago and it took me about a year to realise they were crooks. My account manager would call me up and suggest trades, tell me not to use any stop loss and let it run for several days. Then he'd advise me when to get out to cut my losses. I'd lose hundreds of dollars. I didn't know what I was doing and thought they meant only the best for me. They sent me a cake with some currency symbols on it after my first year of being a client. I felt special. It turns out they are just a casino doing everything they can to take your money.

I've been with FXCM ever since and never had a problem with them.
  • #346
  • Nov 4, 2014 2:38pm Nov 4, 2014 2:38pm
Quoting Roofx
I'm surprised someone with a $200,000+ account chose forex.com as their broker. I thought those guys were just for newbies. I started with them 7 years ago and it took me about a year to realise they were crooks. My account manager would call me up and suggest trades, tell me not to use any stop loss and let it run for several days. Then he'd advise me when to get out to cut my losses. I'd lose hundreds of dollars. I didn't know what I was doing and thought they meant only the best for me. They sent me a cake with some currency symbols...
^^THIS. Interesting, is it their company politics or just creative relationship guy? I can imagine him taking his sausages for breakfast and thinking for ways he will make money for his bosses.. "Oh, I will tell them not to use stop losses and we should send cakes.. HELL YEAH - CAKES!!!"
  • #347
  • Nov 4, 2014 5:05pm Nov 4, 2014 5:05pm
Unfortunately, many financial regulators are under-resourced, +/- don’t have the expertise to address this sort of issue properly. I suspect forex.com UK know this, that’s why they’re attempting to take 20k from your trading account. They also assume that, due to the cost and time involved, a customer taking legal action against them is unlikely.

The “the prices were off-quotes so we’re cancelling all your proifts” trick is still way too common in the shady retail forex broker world. The NFA introduced specific rules to prevent this sort of dishonest practise. Forex.com US wouldn’t attempt this because they know the NFA would come down hard on them. But they must feel the UK regulators will be more passive, presumably based on past experience.

Again, if the prices were indeed “off-quote”, they should have been rejected by forex.com’s trade servers after the trader submitted the order. This is standard practise at any reputable broker. They weren’t. And at the very least, the trader should have been notified within minutes (an hour at most), of any server side error that need’s review. This didn’t happen. Some weeks latter they just decided to reverse profitable trades.

Let’s just hope the UK regulators use this as a test case. The retail forex broker industry still needs a lot of cleaning up.

In the meantime, just avoid forex.com.

​
  • #348
  • Nov 5, 2014 3:35am Nov 5, 2014 3:35am
Quoting Abcxyz77
{quote} How do i know a broker is hedge or not? Is Oanda hedge? It's mean they trade against customers, I thought NFA don't allowed it
Remeber that when you look at your pretty chart and click buy you are looking for someone to sell to you. You broker is doing just that - selling to you. If they did not you would not be able to trade!!! THIS IS WHAT YOU PAY THEM FOR!! - if they did not then you wouldn't recieve a service. Now what they do with that liability/risk is entirely up to them and how they manage their own inventories is frankly none of your or my buisness. Why people get so wrapped up in whether their broker holds or dumps that risk is beyond me. At the end of the day somewhere in the world someone is directly counterparty to your trade whether your service provider holds the inventory (dealer) or dumps it (effectively broker) - and that someone doesn't want you to win :-)

On a more pratical point I suspect the vast majority of 'brokers' are performing the dealer function and holding that risk. Why wouldn't you? you have a traders history and know who is and isn't profitable (informed vs uninformed). As we all know most are unprofitable so its easy for the broker to take your money - is that wrong? - absolutly not and I would do exactly the same thing - I'm sure that 'brokers' will broker (off set the risk) for some traders on their books - the ones that are constantly profitable - Whilst digging through my 'brokers' (alpari) terms and conditions a wee while ago they claimed to automatically (NDD type affair) process 99.6% of trades (can't remember their exact words) - thats an interesting figure I think you'll agree...

Sorry about going OT there for a bit :-)

BBCMicro
  • #349
  • Nov 5, 2014 9:09am Nov 5, 2014 9:09am
Quoting SM02
Unfortunately, many financial regulators are under-resourced, +/- don’t have the expertise to address this sort of issue properly. I suspect forex.com UK know this, that’s why they’re attempting to take 20k from your trading account. They also assume that, due to the cost and time involved, a customer taking legal action against them is unlikely. The “the prices were off-quotes so we’re cancelling all your proifts” trick is still way too common in the shady retail forex broker world. The NFA introduced specific rules to prevent this sort of dishonest...
Usa is the best country to live, the rest of the world is just ignore what is happening with their residents. It is very very hard to choose a broker. We need to choose the office that is manage our account, if it is not in USA, you are most likely f** up!
  • #350
  • Nov 6, 2014 3:56am Nov 6, 2014 3:56am
today no news. Just waiting FOS reply.
  • #351
  • Nov 6, 2014 4:12am Nov 6, 2014 4:12am
Quoting yunben
today no news. Just waiting FOS reply.
your case on FPA look like a dead thread..... no progress, i think forex.com already shut FPA mouth with money
No Pain, No Gain
  • #352
  • Nov 6, 2014 4:48am Nov 6, 2014 4:48am
Quoting 2Good2beTrue
{quote} your case on FPA look like a dead thread..... no progress, i think forex.com already shut FPA mouth with money
maybe
Striving to Develop & Implement Innovative Ideas
  • #353
  • Nov 6, 2014 4:12pm Nov 6, 2014 4:12pm
Hello Yunben, do you teach how to trade ? And Can you tell a bit about how your system works ? Cause if you ve been profitable for years you are among the minority on this forum and i'd die to learn for you. Thanks..
  • #354
  • Edited 9:44pm Nov 6, 2014 8:07pm | Edited 9:44pm
[quote=2Good2beTrue;7851065]{quote} your case on FPA look like a dead thread..... no progress, i think forex.com already shut FPA mouth with money

Quoting metta87
Hello Yunben, ..

I guess becase forex.com is a regulated broker. FPA would like to let FOS to judge it first. FOS does need long time to investigate whether a broker was acting illegally or not. Forex.com doesn't share any evidence or adjusted trade activity. I have to wait any way.
  • #355
  • Nov 6, 2014 8:20pm Nov 6, 2014 8:20pm
Quoting metta87
Hello Yunben, do you teach how to trade ? And Can you tell a bit about how your system works ? Cause if you ve been profitable for years you are among the minority on this forum and i'd die to learn for you. Thanks..



I do wish to trade with a group. but at least you have to trade face to face for several months and you need large fund as me or it is not possible to master other trader's skill with many years trade experience.
  • #356
  • Edited Nov 7, 2014 2:32am Nov 6, 2014 8:53pm | Edited Nov 7, 2014 2:32am
Something about Ombudsman (watch from 15:10)

om·buds·man
ˈämbədzmən/
noun

  1. an official appointed to investigate individuals' complaints against maladministration, especially that of public authorities.


Inserted Video
  • #357
  • Nov 7, 2014 5:50am Nov 7, 2014 5:50am
Anything new guys?
  • #358
  • Nov 8, 2014 8:30pm Nov 8, 2014 8:30pm
Quoting Abcxyz77
Anything new guys?
Nope.
  • #359
  • Nov 9, 2014 3:52am Nov 9, 2014 3:52am
Quoting yunben
{quote} Nope.
I guess the company knows very well that initially there would be some noise but it will die down after some time and then back to business as usual.
One permanent loss for the company that the company underestimates is that : any person who has seen this thread will never use or recommend forex.com to anybody.
Striving to Develop & Implement Innovative Ideas
  • #360
  • Nov 9, 2014 3:56am Nov 9, 2014 3:56am
Quoting New-Pragati
{quote} I guess the company knows very well that initially there would be some noise but it will die down after some time and then back to business as usual. One permanent loss for the company that the company underestimates is that : any person who has seen this thread will never use or recommend forex.com to anybody.
well if it has to with me forex.com is a dead on here I will be watching :
people leave, but this thread will go on for ever
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