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Broker reverses $20K winning trades for alleged latency arbitrage

  • #461
  • Dec 4, 2014 10:36pm Dec 4, 2014 10:36pm
Quoting Rtm
Why has thread starter yunben been banned??
Thanks. My membership was suspended by someone due to my crossing post at news/story.
I didn't realize it is not allowed by forexfactory. I will not do that again.
anyway thanks for Twee who restore my membership.
  • #462
  • Dec 6, 2014 2:45am Dec 6, 2014 2:45am
Quoting yunben
{quote} Thank you for your kind comments. I am waiting for FOS's adjudication. If there is no reply from FOS over two months, I will launch a lawsuit.
Hey, you should launch a lawsuit, i see some guys with big money they trade with Lmax, they open and close less than second, milisecond matter to them. I support you! We need to clean the market, there is no way forex retail market could exist with scam broker under the mask of regulated brokers.
  • #463
  • Edited Dec 8, 2014 12:40am Dec 7, 2014 3:04am | Edited Dec 8, 2014 12:40am
The point of the matter is a trader shouldn't have to look over his/her shoulder to always figure out what is the cause of his profit. Like I said before, a trader is a businessman/woman who is in the business to exploit profit opportunities due to difference in prices. The cause of that price difference is irrelevant only that it exists. All the price info. that gave rise to our trading decision is given to us by the dealer/broker themselves; they were the ones who were in control of that price information. We are their clients. HOW are we supposed to know whether they are correct or late or early?

And the fact that Forex.com would take such drastic steps to confisticate Yunben's profit is not only just an unscrupulous act but is also theft and fraud. I don't know if anyone is aware of this. Even IF let's assume that Yunben really did made these windfall of profit from taking advantage of the server latency (which should've been fixed long time ago) of Forex.com's servers, Forex.com still does NOT have the right to confisticate Yunben's profit. These are client funds that was held in the personal account of Yunben and thus is nobody's but Yunben's personal assets. Nobody has the right to touch them let alone confisticate them. These funds do NOT belong to Forex.com. These were the funds that were earned by Yunben as a result of his trading activities fair and square. If Forex.com feels it's been "unfairly taken advantage" of by Yunben, then WHY don't they complain to the financial authorities and ask them to investigate this issue and if the financial authorities REALLY does believe it's Yunben who has acted inappropriately here (which I highly doubt), then they can be and should be the only ones who seize Yunben's assets. Forex.com has no right to Yunben's profit and their very act of "confisticating" Yunben's funds is nothing short of theft, grand larceny. This is WHY I suggested in my previous post for Yunben to not only launch a lawsuit but to report Forex.com to the police and the authorities because what they have done constitutes a criminal act.

Second, their so desperate action of taking clients' funds when client has made profit also illustrated a very interesting observation and confirmation of what we traders have suspected all along. Despite what they claim about themselves on their website:

Market maker advantage
We are proud to serve our customers as a market maker. We firmly believe this model allows us to deliver the best combination of low trading costs, quality trade executions and great customer service.
Despite what some of our competitors may claim, being a market maker doesn’t mean that we pick and choose which trades to accept, or that our trading desk can adjust the price or the execution speed of your trade. We operate in a highly regulated environment, with strong oversight into trading practices and execution. We quote a price that you can trade, and we execute your trades quickly and accurately, providing a level of price certainty that few brokers can compete with.

If this is indeed the only thing that Forex.com does, "We quote a price that you can trade, and we execute your trades quickly and accurately" then what do they care how much a trader has made according to the price that they quoted and the trades that they executed "quickly and accurately"? What is it to them if a trader has made $200K or $20K or $200, or $20? These dollar amount should make no difference to Forex.com because they would've been compensated already by the spread that they charged according to their website:

"FOREX.com charges no trading commissions or transaction fees. FOREX.com is compensated for its services through the bid/ask spread."

So Forex.com's got their compensation for their service through the bid/ask spread and Yunben's made $200K in profit; everybody is happy. So WHY is Forex.com so unhappy and quick to accuse Yunben of making profit "unfairly" and so desperately trying to hold onto the money that really is not something that they are entitled to anyway? After all, they've already been compensated by the bid/ask spread. Forex.com didn't really lose anything with Yunben making $200K. That $200K is NOT Forex.com's money. So WHY this "desperation"? Perhaps this statement from their Forex.com Customer Agreement might provide the answer:

4.3. Trade Matching. FOREX.com or its affiliates may, at a future date, establish a trade matching system or determine to route Customer’s
orders to a trade matching system operated by third parties. In that event, FOREX.com, and/or any one or more of its affiliates, shall have
the right (but not the obligation), in the sole discretion of FOREX.com or any such affiliate, to act for its own account, and as a counter
party or as a broker to FOREX.com customers, in the making of markets and the purchase and sale of Foreign Exchange Contracts,...

Hmmnn...so they don't just get compensated by the bid/ask spread then. And further guess is that Forex.com must be trading as a "counter-party" to Forex.com's customers "in their sole discretion" during those "server latency" times. And what's even more interesting is that throughout their ENTIRE website, they never made ONE proclaimation that they do NOT trade against their clients unlike other MM brokers like Oanda and IC Markets which also operates in MM model for part of their business.

Something really for us traders to think about when we are looking for brokers. This is something that can happen to you when you have REALLY made too much money with a broker when the broker does trade against you. And for Yunben, I say "All the best to you!! Go as far as you can in persecuting these criminals and get your money back! We are all behind you 100%! Keep us updated of your case." Hope you found a reputable broker now and good trading!

P.S. Further interesting observation about Forex.com:

On their "advertising" website, this is what they claim regarding their order execution practices:


We stand behind every trade

Perhaps most importantly, we stand behind each and every trade. One of the primary benefits of dealing directly with FOREX.com is that we’re fully accountable for every execution – as a market maker, we don’t outsource that responsibility to a third party.

And yet this is what they state in their Customer Agreement as stated earlier:

4.3. Trade Matching. FOREX.com or its affiliates may, at a future date, establish a trade matching system or determine to route Customer’s
orders to a trade matching system operated by third parties.

So what happened to them "standing behind every trade"?
Make your losses in demo. Earn your profits live.
  • #464
  • Dec 9, 2014 2:37am Dec 9, 2014 2:37am
Quoting Forexia
The point of the matter is a trader shouldn't have to look over his/her shoulder to always figure out what is the cause of his profit. Like I said before, a trader is a businessman/woman who is in the business to exploit profit opportunities due to difference in prices. The cause of that price difference is irrelevant only that it exists. All the price info. that gave rise to our trading decision is given to us by the dealer/broker themselves; they were the ones who were in control of that price information. We are their clients. HOW are we supposed...
thank you for your post it was great reading
people leave, but this thread will go on for ever
  • #465
  • Dec 9, 2014 3:05pm Dec 9, 2014 3:05pm
Quoting Forexia
The point of the matter is a trader shouldn't have to look over his/her shoulder to always figure out what is the cause of his profit. Like I said before, a trader is a businessman/woman who is in the business to exploit profit opportunities due to difference in prices. The cause of that price difference is irrelevant only that it exists. All the price info. that gave rise to our trading decision is given to us by the dealer/broker themselves; they were the ones who were in control of that price information. We are their clients. HOW are we supposed...
Very fair and informative post.Thank you !!
Failure, is a wonderful teacher!
  • #466
  • Dec 10, 2014 5:55pm Dec 10, 2014 5:55pm
Quoting Forexia
The point of the matter is a trader shouldn't have to look over his/her shoulder to always figure out what is the cause of his profit. Like I said before, a trader is a businessman/woman who is in the business to exploit profit opportunities due to difference in prices. The cause of that price difference is irrelevant only that it exists. All the price info. that gave rise to our trading decision is given to us by the dealer/broker themselves; they were the ones who were in control of that price information. We are their clients. HOW are we supposed...
In the world of electronic markets there will be glitches.

I don't know the insides of this particular dispute but if there is a glitch on a platform that presents an arb opportunity then this is not in the spirit of the game so to speak and both parties should not take advantage of each other.

Lets look at futures or the stockmarket electronic platforms.
If there is a glitch then all trades will be cancelled for that period of irregularity.
  • #467
  • Dec 10, 2014 10:54pm Dec 10, 2014 10:54pm
Quoting lasty
{quote} In the world of electronic markets there will be glitches. I don't know the insides of this particular dispute but if there is a glitch on a platform that presents an arb opportunity then this is not in the spirit of the game so to speak and both parties should not take advantage of each other. Lets look at futures or the stockmarket electronic platforms. If there is a glitch then all trades will be cancelled for that period of irregularity.
forex.com only cancel profit trades !!! and leave losing trade, and you should note that only this men get that adjustment.... i think there should be a lot of people enter position at that time(at high impact news) and don't get adjusted, do you think it fair enough???
No Pain, No Gain
  • #468
  • Dec 11, 2014 4:49pm Dec 11, 2014 4:49pm
Quoting 2Good2beTrue
{quote} forex.com only cancel profit trades !!! and leave losing trade, and you should note that only this men get that adjustment.... i think there should be a lot of people enter position at that time(at high impact news) and don't get adjusted, do you think it fair enough???
There is a big difference between news events and a technical fault. News events are part of the market conditions and gapping or slippage can be expected.
  • #469
  • Dec 11, 2014 10:30pm Dec 11, 2014 10:30pm
Quoting lasty
{quote} In the world of electronic markets there will be glitches. I don't know the insides of this particular dispute but if there is a glitch on a platform that presents an arb opportunity then this is not in the spirit of the game so to speak and both parties should not take advantage of each other. Lets look at futures or the stockmarket electronic platforms. If there is a glitch then all trades will be cancelled for that period of irregularity.
First of all, these "glitches" is NOT the trader's problem. It's the responsibility and the sole responsibility of the providers of the platforms, in this case Forex.com to maintain their system to make sure they are glitch-free. Second, if glitches were found on exchanges or platforms, trades are not cancelled, the whole entire platform or exchange is shut down to repair the glitches only when the "glitches" or any problems are fully repaired then the platforms or exchanges get re-opened. WHY didn't Forex.com inform their traders of these "glitches", shut down their platform to take them off-line for them to repair these "glitches" as you call it and re-open them once these "glitches" are eliminated or "repaired" like any other reputable brokerages, platform providers and exchanges? Instead, they knowingly kept their faulty glitchy platform for traders to trade against taking their money and in the meantime punishing traders like Yunben who managed to still make a profit? Us traders trusted Forex.com for accurate and timely price information I mean this is why traders signed up with Forex.com and yet this is how Forex.com treated us? By providing delayed, inaccurate price information due to their "glitches" and then punishing us traders who happened to still be able to make a profit? I actually didn't cover this information integrity issue because my post was already very long but thanks for bringing this up. This just gives me more opportunity to point out how unscrupulous this broker is.
Make your losses in demo. Earn your profits live.
  • #470
  • Dec 11, 2014 11:02pm Dec 11, 2014 11:02pm
Quoting lasty
{quote} There is a big difference between news events and a technical fault. News events are part of the market conditions and gapping or slippage can be expected.
What do you mean? Do you mean forex.com adjust customers trades by hands is a new event and it happens regularly! Because they put the terms that they can adjust it due to arbitrade latency! And this is what they do daily to customers?
  • #471
  • Dec 11, 2014 11:59pm Dec 11, 2014 11:59pm
Quoting lasty
{quote} There is a big difference between news events and a technical fault. News events are part of the market conditions and gapping or slippage can be expected.
yes i know that different lasty, but the problem is, "if" they have server problem at that time they should adjust ALL TRADES... not only cancel Profit trades and leave lossing trades....

total profit=19.751,19 (Canceled)
total loss =-8.150,15

date 2014.10.15
01:44:31 buy eurusd 5.30
07:50:01 buy uk_oil -4.00
07:57:57 buy uk_oil 5.00
07:59:33 buy uk_oil 15.00
08:00:26 buy uk_oil 4.00
08:08:01 sell usdcad 7.65
11:21:30 sell us30 2.00
12:36:53 buy usdjpy 7.61
12:37:25 buy usdjpy 24.51
12:47:43 buy usdchf -34.85
12:47:48 buy usdchf -15.96
12:48:24 buy usdchf -6.97
12:48:25 buy usdjpy -6.77
12:51:17 buy usdchf 11.40
12:51:29 buy usdjpy 0.85
12:52:26 buy usdchf 54.48
12:53:00 buy usdjpy 8.47
12:53:48 buy usdjpy 24.83
12:54:17 buy usdjpy 23.98
13:00:05 buy usdchf 0.63
13:00:31 buy usdchf -5.70
13:02:01 buy usdchf 23.45
13:02:25 buy usdchf 18.70
13:02:28 buy usdjpy 11.85
13:03:15 buy usdchf 138.16
13:03:29 buy usdjpy 25.11
13:10:24 buy usdchf -40.91
13:11:16 buy usdchf -19.03
13:16:26 buy usdchf -126.09
13:16:48 buy usdchf 8.88
13:17:22 buy usdchf 102.75
13:18:49 buy usdchf 28.23
13:19:16 buy usdchf 25.05
13:22:35 buy usdchf -185.11
13:23:25 buy usdjpy -92.38
13:25:02 buy usdchf -166.60
13:25:22 buy usdjpy -148.01
13:26:35 buy usdchf -88.23
13:27:26 buy usdchf -440.66
13:28:02 buy usdchf -414.86
13:28:11 buy usdjpy -147.26
13:29:57 buy usdjpy -592.93
13:30:33 buy usdjpy -316.50
13:30:36 buy usdchf -238.93
13:31:49 buy usdchf -529.79
13:32:06 buy usdjpy -329.29
13:34:14 buy usdchf -1770.36
13:35:58 buy usdjpy -844.84
13:37:20 buy usdchf -821.25
13:37:29 buy usdjpy -181.76
13:39:07 buy usdchf -239.33
13:39:53 buy usdchf 1475.57
13:40:27 buy usdchf -230.25
13:41:50 buy usdjpy 1662.94
13:42:31 buy usdchf 2675.93
13:43:33 buy usdchf 1045.67
13:44:09 buy usdchf 1072.96
13:44:59 buy usdchf -111.53
13:46:03 buy usdchf 456.61
13:46:27 sell usdchf 775.80
13:46:43 sell usdchf 743.92
13:46:58 buy usdchf 1040.43
13:47:02 buy usdchf 2760.32
13:47:31 buy usdchf 159.29
13:48:23 buy usdchf 604.69
13:48:27 buy usdchf 369.20
13:49:35 buy usdchf 3346.18
13:50:40 sell usdchf 445.20
13:50:45 sell usdchf 339.20
13:55:59 sell usdchf 12.51
14:01:30 sell usdchf 1.27
14:02:51 sell usdchf 5.50
14:17:31 sell usdchf 116.36
14:24:17 buy usdchf 10.15
15:51:04 buy eurusd 4.60
17:00:25 sell eurusd 2.20
17:04:24 sell eurusd 0.80
17:36:59 buy us30 12.00
17:38:13 buy us30 26.00
17:51:04 sell us30 8.00
No Pain, No Gain
  • #472
  • Dec 12, 2014 12:21am Dec 12, 2014 12:21am
Quoting 2Good2beTrue
{quote} yes i know that different lasty, but the problem is, "if" they have server problem at that time they should adjust ALL TRADES... not only cancel Profit trades and leave lossing trades.... total profit=19.751,19 (Canceled) total loss =-8.150,15 date 2014.10.15 01:44:31 buy eurusd 5.30 07:50:01 buy uk_oil -4.00 07:57:57 buy uk_oil 5.00 07:59:33 buy uk_oil 15.00 08:00:26 buy uk_oil 4.00 08:08:01 sell usdcad 7.65 11:21:30 sell us30 2.00 12:36:53 buy usdjpy 7.61 12:37:25 buy usdjpy 24.51 12:47:43 buy usdchf -34.85 12:47:48 buy usdchf -15.96 12:48:24...
NO IF they had a server problem, they should've shut down the server so NOBODY could trade. Period. Until they repair the server and then re-open it to everybody for trading. That's the ONLY fair thing to do and that's what reputable brokers and exchanges do. They can't just quietly accept losing trades from clients and then cry foul when clients profit from trading. They can't have it both ways. Server's got problem, server's got problem. Shut down the server, fix the server then re-open the server. Otherwise everything that's traded on that server is won or lost fair and square. Another way to think of it, they confisticated Yunben's funds when he made profit. Do they turn around and compensate clients on their losses that they made due to their servers' problems? No. So that means everything on the server is fair game for all. If it's fair game to forex.com, then it's fair game for Yunben.
Make your losses in demo. Earn your profits live.
  • #473
  • Dec 12, 2014 12:24am Dec 12, 2014 12:24am
Quoting Forexia
{quote} NO IF they had a server problem, they should've shut down the server so NOBODY could trade. Period. Until they repair the server and then re-open it to everybody for trading. That's the ONLY fair thing to do and that's what reputable brokers and exchanges do. They can't just quietly accept losing trades from clients and then cry foul when clients profit from trading. They can't have it both ways. Server's got problem, server's got problem. Shut down the server, fix the server then re-open the server. Otherwise everything that's traded on...
agree
No Pain, No Gain
  • #474
  • Dec 12, 2014 5:48am Dec 12, 2014 5:48am
Quoting Forexia
{quote} NO IF they had a server problem, they should've shut down the server so NOBODY could trade. Period. Until they repair the server and then re-open it to everybody for trading. That's the ONLY fair thing to do and that's what reputable brokers and exchanges do. They can't just quietly accept losing trades from clients and then cry foul when clients profit from trading. They can't have it both ways. Server's got problem, server's got problem. Shut down the server, fix the server then re-open the server. Otherwise everything that's traded on...
If there system is that bad then NFA, CFTC will shut down there business in the matter of time. If they are dishonest and try to make money by adjust customers trades like this they will be fined soon an nobody will trade with them simply because there are so many other good choices out there.
http://www.cftc.gov/PressRoom/PressReleases/pr7077-14
NFA,CFTC will act soon or later!
  • #475
  • Edited 9:42pm Dec 12, 2014 4:33pm | Edited 9:42pm
Quoting Abcxyz77
{quote} If there system is that bad then NFA, CFTC will shut down there business in the matter of time. If they are dishonest and try to make money by adjust customers trades like this they will be fined soon an nobody will trade with them simply because there are so many other good choices out there. http://www.cftc.gov/PressRoom/PressReleases/pr7077-14 NFA,CFTC will act soon or later!
While I applaud those regulatory bodies' efforts in monitoring the forex brokers for our sake but they aren't really going after the real offenders and the right offences that really matter to us traders. All they are doing is punishing the "offences" for their sake, I find like this one on IBFX. All they fined IBFX for failing to keep minimum net capital to NFA which means IBFX is not having enough money thus not doing so well and reporting that they cannot meet the required minimum net capital which means IBFX, in order to attract customers, didn't want to publish the fact that they are short of cash and thirdly not supervising their employees in forex exposure which just means they didn't bother to issue margin calls on traders that traded with them so they can actually make a bit of money. All nice gestures on NFA's part but aside from advertising that IBFX is a small company to discourage traders from signing up with them, they really haven't done anything solid for traders who are with them.

The biggest problems that we traders encounter with these forex brokers is the same that we encounter with any dishonest brokers out there regardless if it's for stocks or forex and that includes but is not limited to front-running, price manipulations, unfair slippages, conflict of interest (trading against clients), inaccurate and/or delayed prices, taking client's money and not returning them back to the clients when demanded just to name a few and so far the ONLY broker that has ever been caught and fined on these infractions was FXCM and the disciplinary action was launched by FCA in the UK not even in the US. And then the NFA saw that there was money to be made so they just tagged along for the ride and subsequently found FXCM guilty of the same charges and fined FXCM as well. But what's interesting is that FXCM had been doing the same thing, the same unfair slippages practices and price manipulations for years before the FCA caught them, what were NFA doing before? WHY didn't NFA prosecute FXCM before? They were not aware of it before until FCA in the UK came along and pointed it out or did they turn a blind eye and just not care? We all know which one it is. Even IF that is the case, then at best NFA is not that competent. Can we really trust them in better regulating our retail forex industry? But then again without NFA there, who else is there to regulate and oversee the retail forex industry? We all know what the retail forex industry was like before the NFA went to Congress and applied to put the retail forex industry under their jurisdiction under the extension of the Dodd-Frank Act.

SO all in all, it's nice at least we have some regulatory bodies to watch over the retail forex industry to keep those brokers in line but are they REALLY doing enough and effectively regulating those brokers AND for the flourishing of the Retail Forex industry and not to the detriment of it is the BIG question.
Make your losses in demo. Earn your profits live.
  • #476
  • Dec 15, 2014 1:45am Dec 15, 2014 1:45am
other complaints are pending on forex.com so lets see what happens
people leave, but this thread will go on for ever
  • #477
  • Dec 18, 2014 8:58pm Dec 18, 2014 8:58pm
Quoting Forexia
{quote} While I applaud those regulatory bodies' efforts in monitoring the forex brokers for our sake but they aren't really going after the real offenders and the right offences that really matter to us traders. All they are doing is punishing the "offences" for their sake, I find like this one on IBFX. All they fined IBFX for failing to keep minimum net capital to NFA which means IBFX is not having enough money thus not doing so well and reporting that they cannot meet the required minimum net capital which means IBFX, in order to attract customers,...
Thanks.

FOS is tooooooooo slow
still now result so far.
  • #478
  • Dec 18, 2014 9:16pm Dec 18, 2014 9:16pm
It is because of the slowness of Regulatory bodies that firms like forex.com and others are able to cheat customers.
Shame on FOS and forex.com
Striving to Develop & Implement Innovative Ideas
  • #479
  • Dec 18, 2014 11:13pm Dec 18, 2014 11:13pm
justice delayed is justice denied
Shame on FOS
  • #480
  • Dec 19, 2014 12:46am Dec 19, 2014 12:46am
Quoting yunben
{quote} Thanks. FOS is tooooooooo slow still now result so far.
You should follow up or better yet ask your lawyer to follow up with them. They can't just make you wait forever. There is a certain guideline where they have to respond. After all, Forex.com took your money, money that rightfully belonged to YOU. If not for anything else, it's at least theft!

Good luck!
Make your losses in demo. Earn your profits live.
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