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Brokers chasing you for negative account balance

  • #41
  • Jan 18, 2015 7:56pm Jan 18, 2015 7:56pm
Quoting Forexia
{quote} Of course! Didn't you hear those liquidity "providers" crying "they lost money too"? Well that's the profit that those smart traders (good for them) made against them! And thanks to the liquidity "providers" stopping the price quote for an hour+, those traders got to tp at the rock bottom price, making 1898+ pips, indeed a windfall! See if those liquidity "providers" had continued to provide liquidity throughout, their "losses" would've been smaller too because some of the traders might have tp'ed sooner instead of at the rock bottom price...
Yes but I hear that brokers are trying not to pay or to just pay at whatever TP they may have had in place even if it was passed in the swift move. I truly hope those on the right side of the trade get the ull amount especially if brokers turn around and try to make the losers pay.
  • #42
  • Jan 18, 2015 8:50pm Jan 18, 2015 8:50pm
I find it staggering that people in any market think they can take their profits out but walk away from a debt.
Even if that debt is caused by a one in a life time event.

It's like having a bet with a Mate and when you lose you just walk away....

Having said that, greedy brokers plus uneducated clients who demand more and more leverage = bust.

I had an over loss in the 87 stock market crash and as I was so young, it took me two years to pay it off.

Then again, I'm X generation, I guess it's mostly Y generation that want there losses forgotten about.

Don't bother send me letters of abuse, I won't read them, you shouldn't be in a market if you can't pay the ferryman.
  • #43
  • Jan 18, 2015 9:45pm Jan 18, 2015 9:45pm
stop the pointless arguing, those who gotta pay, just pay up or hire lawyer to fight back if he/she thinks the possibility of winning in the court is in his/her favour.

traders are responsible and accountable for his/her own actions. EUR/CHF was down for how many days? if you look at the daily chart?

any brokers got the balls to open up this business sure got their sorry arses covered by legal in the case of catastrophe events, they are no charity organizations, banks/liquidity providers on day NO.1 are already on the other side of the retail traders, this is the FACT.

good luck to sue the banks, or the brokers hiding behind giggling, i don't believe those brokers were also on the losing end, some of them are pretending to be victims, to make an average joe to believe that is too simple. call it a scam, nobody cares, a few months later, all is forgotten, a commoner just don't have the hard disk capacity in its brain to remember history, and history repeats itself.

i am not broker, i am just a normal retail trader and i know on the day when i opened up my account with my broker, i had to fight against 2 enemies, NO.1 enemy is myself, enough said, NO.2 is my broker who has the capability to screw my trades by a pip or so and get away with it because i cannot find any evidence. (showing a chart of another broker is the easiest one to be countered by the broker in use, go figure. and i really don't have the energy or resource to sue the broker, 1 single loss is nothing to me anyway).

what do i do? slightly bigger stop loss, higher time frame, follow the trend in the higher time frame and avoid currency whose central bank has artificial barriers AGAINST the market natural intention. SNB did it once 3 years ago, SNB can do it again any time, that's why i never bothered to touch CHF pairs for over 3 years+, NOT a single trade with CHF, EUR is a better alternative. and don't forget SNB is not the only one, BOE did it decades ago, remember?

arguing in FF resolves no issue at hand, only shows the immaturity of a hot head teenage or an adult with a psychological age of teenage.
  • #44
  • Jan 18, 2015 9:54pm Jan 18, 2015 9:54pm
This is from a large FX education company director

"You will have no doubt seen the big fall out in in the Swiss franc yesterday. This sent the market into a spin and has led to losses of up to £30m reported from IG Index. Alapri has filed insolvency and countless others have been left in a very precarious position, with more insolvency announcements expected over the next 48 hours.

Those brokers left in such precarious positions will no doubt be writing to you this morning, informing you that they have filled your trades at levels they will likely not honour - meaning these losses are very likely to be handed over to you.

We have seen this before and to this end, I decided last year to create a proper "straight-through" broker (with no dealing desk) that ensures we don't internalise this risk like other dealing desk brokers which meant that none of our clients inherited these losses yesterday. And in fact, those that did take losses outside of their account level had their account balances reinstated.

Those of you already aware of the importance of this, have already moved your accounts over to (name suppressed) as I have committed to running a true STP brokerage, that ensures we are aligned - meaning we make our money from the volume of your trades not the performance of your trades."

No clients inherited losses ? Why because his broking firm managed to get the only prices in the market whilst every other broker didnt.

What other crap is this company teaching ?
  • #45
  • Jan 18, 2015 11:09pm Jan 18, 2015 11:09pm
My IGMARKETS broker is chasing me for payment. Expecting me to pay because I have made a fair penny over the year. But all has been spent on paying bills and debts that I have had accrued over the years because of my terrible trading.
They requested my bank account statements to prove that I have no money to pay them back. WHICH IS TRUE!!!
I have bed credit ratings and have had a default before.
There is no way I can pay them back with this huge deficit. Lesson learnt but I might have to pay this for life with my current income! 280k AUD is not a nice figure to be in deficit for and I don't even own a home!
Waiting for them to get back to me... I don't know what for though because they don't want to help in any way. THey are expecting a lump sump payment then an installment plan. Even so I cannot afford it due to my rent etc.
!!!!!!!!!!!!!!!!!!!!
Sorry to rage but I am lost and confused.

My next step is asking Ombudsman for help....
  • #46
  • Edited 11:51pm Jan 18, 2015 11:27pm | Edited 11:51pm
Quoting grin
{quote} Let me remind about numerous efforts of various central banks to control exchange rates. They all failed. The banks were attempting to be liquidity providers in order to satisfy demand as you say. They all bled profoundly and once they gave up price still moved rapidly in the direction where it wanted to be. You suggest that private liquidity provides step in and do something on which the SNB gave up even with its essentially unbound capacity to flood market with francs. Think a bit beyond news announcement itself. Think about fundamental...
You overestimate your liquidity providers LOL; they are big yes, LOT bigger than us or the brokers yes but they are in NO WAY be able to "step in" to fill in the shoes of a Central Bank nor were they ever expected to. However they were expected to provide liquidity to maintain an orderly market. By the end of the day, the prices would've fallen to its fair market value eventually still but NOT in such huge fall which created a 1K+ negative slippages to all traders and brokers who tried to close the positions!! If the liquidity "providers" had stayed there and kept the market open, all the losing trades would've been closed at the stop-loss levels or as soon as it could and the losses a.k.a negative balances would've been minimized and controlled. Like I said many times before, and thanks to all those trolls I get to say this again and again and again, that because of the shutdown of the quotes by the liquidity "providers", all the trades that had reasonable stop-loss prices and all the brokers who had good margin stop-out levels all had to wait until the price hit rock bottom and then closed the trades, all suffering close to 2K+ pips negative slippages! It's that 2K+ pips slippages that shouldn't have happened if the liquidity "providers" had continued to do their job which is providing liquidity. And it's this loss or negative balances resulting from this 2K+ pips negative slippages that brokers thus the traders shouldn't be responsible for.
Make your losses in demo. Earn your profits live.
  • #47
  • Jan 18, 2015 11:59pm Jan 18, 2015 11:59pm
Quoting Trendzalore
{quote} Yes but I hear that brokers are trying not to pay or to just pay at whatever TP they may have had in place even if it was passed in the swift move. I truly hope those on the right side of the trade get the ull amount especially if brokers turn around and try to make the losers pay.
Well they can't have it both ways. If they are not going to forgive the negative balances or at least part of the unreasonably large negative balances incurred due to the outrageous negative slippages because of those a$$holes liquidity "providers" stopping the quotes a.k.a the "swift move", then they are gonna have to honour the positive slippages that the winning traders had while holding the positions all the way until the price hit rock bottom in that "swift move" because they are the flip sides of the same coin. Negative slippage for the losing traders who got the positions closed at the rock bottom price far worse than their originally intended stop-loss levels is the very same positive slippages that those winning traders enjoyed when their trades got closed at the rock bottom price far better than their originally intended TP level. You can't just honor the negative slippage but not the positive slippage. This is what FXCM got fined for last year by FCA; it's their unfair slippage practice. If any brokers and/or banks choose to do that again this time, then we will just complain to the FCA and they will get fined again. They get to choose between paying us the profit or paying the fines to FCA.

But then again this is not really the brokers' problems, since all of this slippages, negative and positive were caused by liquidity "providers" stop providing liquidity, they should just send these to their banks and let them deal with this s*** created by their own doing.
Make your losses in demo. Earn your profits live.
  • #48
  • Jan 19, 2015 12:06am Jan 19, 2015 12:06am
Forexia, so, basically you want to unload your loss to someone else. Someone had to sell you swiss franks at prices did not exist anymore. Do you really believe in that?
Liquidity providers are not in the market to give you volume at any given price. They provide you with money at the price they think adequate.
Swiss frank revaluation while quite huge by forex standard is nothing special in other markets. Stock prices move much more. FXCM share plunged overnight 88% from 17$ to almost 1$ per share. For regular traders there were no possibility to do anything as the market was closed. A person who bought it at 17$, should he blame someone else for his loss or only himself?
EURCHF was pretty one sided market. There were few odd bids below 1.20 but that was it. Mostly empty volume prices. Overall long position was many times bigger than the overall short position. No way any matching engine could match your stop with someone else's bid. Some brokers executed client's orders at or near the stop prices 1.19+, but it was not real execution so the brokers either have to review the trades and change the execution price to more realistic <1.0 or take that loss on themselves. A piece of advice here that if your broker is taking that loss and no reviewing your execution, you'd better get your money and go to a broker who tries to recover money from clients. Because the former broker will try to recover the loss from clients by other means.
Wookey
  • #49
  • Jan 19, 2015 12:18am Jan 19, 2015 12:18am
Quoting Forexia
{quote} Well they can't have it both ways. If they are not going to forgive the negative balances or at least part of the unreasonably large negative balances incurred due to the outrageous negative slippages because of those a$$holes liquidity "providers" stopping the quotes a.k.a the "swift move", then they are gonna have to honour the positive slippages that the winning traders had while holding the positions all the way until the price hit rock bottom in that "swift move" because they are the flip sides of the same coin.
1. You may not have a positive slippage here because you have so many stop orders that your buy limit will be matched with one on those stop orders. So you will be executed at your limit price precisely and someone stop will be filled.

2. Saying that, if your broker does not have positive slippages at all, you should change it. Because they are clearly playing not fair. My small FXCM account never had positive slippages, that is why I will never trade with them. LMAX on the other hand had positive slippages so they will get business from me.
Wookey
  • #50
  • Jan 19, 2015 12:37am Jan 19, 2015 12:37am
Quoting Forexia
{quote} That's for me to calculate, you to guess and my broker to pass to the f***ing chicken s*** liquidity "providers" to eat up!

Why should your LP "eat that up", they gave you a price, you got filled, that is a Market. Now you come here quarterbacking on a Monday morning because they gave you a price you didn't like. Tough. Eat it up.
A contrarian; I always disagree.
  • #51
  • Jan 19, 2015 12:42am Jan 19, 2015 12:42am
Quoting grin
{quote} I feel you missed my point. A central bank capitulated and seized providing liquidity to support 1.20 peg while you want private parties to replace SNB provided liquidity along supplement compensating for psychological effect of the announcement. At the same time, you concede these private parties are not as powerful as SNB. Do I miss something? There were reports of SNB providing liquidity aftermath the announcement, but apparently it was not enough or not structured properly for the circumstances.

He got burnt because he was in a crap trade, now he wants someone else to pay for his mistake. It is traders like him that give the rest of the retailers a bad name, the more he goes on, the more a regulator will pick up on it and start regulating the crap out of the retail market to protect the silly uninformed retailers like him from future events like these.

It is guys like Forexia that should not be trading, if they don't stop voluntarily, they will find ways to make him stop to protect him from his own stupidity. I really do hope his broker will chase him for his negative balance, that should teach him a lesson.

A trader should not be able to walk away from his own doing. In the process of all of this I learnt that FXCM is one that will not chase you up for negative balances as they themselves admit that negative balances should not occur within their business practise. I really hope that Forexia is with a broker that does chase his client for negative balances.

That should sort him. "Eat it" as he likes to say himself on countless threads here.
A contrarian; I always disagree.
  • #52
  • Jan 19, 2015 1:30am Jan 19, 2015 1:30am
Fortunately or unfortunately I'm chasing my Broker ....U K to get my Swiss New year windfall. Anyone out there like me!!!
  • #53
  • Jan 19, 2015 1:39am Jan 19, 2015 1:39am
Quoting wookey
Forexia, so, basically you want to unload your loss to someone else. Someone had to sell you swiss franks at prices did not exist anymore. Do you really believe in that? Liquidity providers are not in the market to give you volume at any given price. They provide you with money at the price they think adequate. Swiss frank revaluation while quite huge by forex standard is nothing special in other markets. Stock prices move much more. FXCM share plunged overnight 88% from 17$ to almost 1$ per share. For regular traders there were no possibility to...
Well said.
  • #54
  • Jan 19, 2015 1:45am Jan 19, 2015 1:45am
Quoting Forexia
{quote} Well they can't have it both ways. If they are not going to forgive the negative balances or at least part of the unreasonably large negative balances incurred due to the outrageous negative slippages because of those a$$holes liquidity "providers" stopping the quotes a.k.a the "swift move", then they are gonna have to honour the positive slippages that the winning traders had while holding the positions all the way until the price hit rock bottom in that "swift move" because they are the flip sides of the same coin. Negative slippage for...
Ah, sorry, yes they can have it both ways. If the broker is "insolvent" or out of regulation, or however you want to word it, ALL trades get included. All settlement basically gets halted and it is left up to account administrators to deal with. From the brokers point of view, they will chase traders who lost or owe money, from the traders point of view , unfortunately you have to play administrator yourself and chase your money if you were on a winning trade or if you were on a loser you may be running and hiding. That's business folks, not always fair, rarely nice, often tough but that's how it is.
For what it's worth, I haven't heard of anyone not having their account credited with profits from that day, myself included. Perhaps a more prudent selection of broker is required for some, look past the discount.
  • #55
  • Jan 19, 2015 1:46am Jan 19, 2015 1:46am
I think its always easy to blame someone .Just say:" oh the big move just happened what should we do...??!!"
NONSENSE
  • #56
  • Jan 19, 2015 1:46am Jan 19, 2015 1:46am
Quoting goldfinch
{quote} He got burnt because he was in a crap trade, now he wants someone else to pay for his mistake. It is traders like him that give the rest of the retailers a bad name, the more he goes on, the more a regulator will pick up on it and start regulating the crap out of the retail market to protect the silly uninformed retailers like him from future events like these. It is guys like Forexia that should not be trading, if they don't stop voluntarily, they will find ways to make him stop to protect him from his own stupidity. I really do hope his...
OUCH!!!....but probably true.
  • #57
  • Jan 19, 2015 1:54am Jan 19, 2015 1:54am
Quoting grin
{quote} I feel you missed my point. A central bank capitulated and seized providing liquidity to support 1.20 peg while you want private parties to replace SNB provided liquidity along supplement compensating for psychological effect of the announcement. At the same time, you concede that private banks are not as powerful as SNB. Do I miss something? There were reports of SNB providing liquidity aftermath the announcement, but apparently it was not enough or not structured properly for the circumstances. One option for not being stopped out is not...
Absolutely a properly funded account with orders placed to cover all eventualities. An investment looks at all angles. Unfortunately the so called "educators" don't make money from educated traders, so don't teach their followers such tactics, just show them the golden path. Sadly this leads a lot of retail traders with small accounts down a different path. Controversial, but small accounts don't work, do it properly or not at all. Feel free to shoot me down, but I've been in this circus for more than 20 years and seen plenty come and go. It wasn't that long ago you had to have a serious account to even look at FX, but the brokers pushed for change to allow retail, because it's profitable....for them.
Last week was a shock for many new or small traders, but in reality and compared to other markets, not a big hit. Think back to 87, 97, tech wreck or even oil and iron ore over the last few months. Not to mention FXCMs stock price today.
  • #58
  • Jan 19, 2015 2:00am Jan 19, 2015 2:00am
Quoting shrike
Any reason in particular LMAX should pay for YOUR losses?
LOL

Quoting mitch77
{quote} Of course not........ but if you had the choice between a broker that doesn't make you pay if you account goes negative or does what would you choose?
You're right but those brokers who forgive negative balances from traders are either bucketshops (so they don't owe money to anybody on the other side like an ECN would in this situation) or they are absorbing the losses, which they will have to recover through the traders one way or another (increased commissions, etc) otherwise they could possibly end up sacrificing their financial stabilitly in the long-run.

I doubt brokers are going to go after traders who are in the negative by a couple of hundred bucks, it's probably not cost-effective but they might, depending on contract-agreement, regulations & costs involved, choose to go after those that owe them thousands of dollars. Lmax is big with a higher minimum deposit than most brokers so it should be obvious that they aren't going to let people off the hook very easily. But then, if you expect a certain level of quality & standards then there's typically a cost attached to it.

Quoting santos23
excuse my stupidity, but dont brokers have some type of financial insurance against these type of events?
Probably not but they SHOULD. I think it's high time that brokers, especially ECNs being more vulnerable under certain conditions, should arrange for some sort of insurance to protect themselves & their traders against events like the other day.

Quoting Hyperion
I find it staggering that people in any market think they can take their profits out but walk away from a debt. Even if that debt is caused by a one in a life time event. It's like having a bet with a Mate and when you lose you just walk away.... Having said that, greedy brokers plus uneducated clients who demand more and more leverage = bust. I had an over loss in the 87 stock market crash and as I was so young, it took me two years to pay it off. Then again, I'm X generation, I guess it's mostly Y generation that want there losses forgotten about....
I don't think it's a question of generations. I think it's the difference between those who believe in taking responsibility for one's own actions & those who believe in always pointing fingers others for their mistakes & have an attitude of being entitled to things.

Quoting Forexia
{quote} It's the LP's JOB to give me a price.
No, you DIDN'T hire them so they are NOT "working" for you. Your contract is with your broker & I'm sure the contract says that the broker isn't obligated to provide the price that you want, at any given time. The LPs' contract is with the broker, NOT WITH YOU so LPs are in no way obligated to provide prices to you or to absorb your losses. YOU should take responsibility for YOUR overleveraged, ill-conceived trading, & if you can't then stop trading altogether; don't try to destroy forex market with stupid regulations. If you want a regulated market then go trade on the exchanges, where you'll be "protected" by the regulators, where you'll need $25000 to daytrade! Let forex market remain free!

Quoting wookey
Swiss frank revaluation while quite huge by forex standard is nothing special in other markets. Stock prices move much more. FXCM share plunged overnight 88% from 17$ to almost 1$ per share. For regular traders there were no possibility to do anything as the market was closed. A person who bought it at 17$, should he blame someone else for his loss or only himself?
Very good point!
  • #59
  • Jan 19, 2015 5:17am Jan 19, 2015 5:17am
This problem points to the absolute necessity of establishing a centralized forex exchange similar to NYSE or CME. I can only speak for the US, but your losses regardless of the cause have to be covered in T3. (trade + 3 days) Most brokerages will sue you for losses, heck they have plenty of lawyers to do this work.

Again, without the transparency of a centralized exchange your brokerage firm was on the other side of your contract. Let me ask you this, had the market spiked up and reached stopping volume. would you expect to realize the gains? Or just cut the brokerage some slack because it was a freak event?

I am not a broker, but have traded for institutions for my adult career. I also owned a stock brokerage with 100+ traders until 2012. With commissions so low, the margins are razor thin. I can remember back in 1980 when a round trip was $50, a lot has changed in the brokerage business. Further, a stop/loss or target is not guaranteed in most markets as there are specific rules covering them, specifically the 2 tick rule when trading stocks. I think it is safe to say you are liable for your losses. I am not unsympathetic to traders who lost money; it was an unfortunate event, but it you are going to trade you had best fully understand the risks of zero-sum trading.

Further, FXCM is trying to negotiate a $200,000,000 loan. If it were me, I would seriously consider the ramifications of their lack of current solvency. Of course, they may get the loan and everything will be fine. I really don't know the status of their financials except they were looking for lots of money Fri. in the credit markets and with banks.

Hope it helps, and keep pushing for a real exchange and things will get better. You need the transparency of a real exchange to insure fair treatment.
  • #60
  • Jan 19, 2015 6:22am Jan 19, 2015 6:22am
Quoting JensG
{quote} You could create some sort of limited liability legal form like the british limited or the german GmbH (also, the LTD comes a lot cheaper and might be preferable anyway as LMAX is a UK broker). You may want to discuss that with your accountant/financial advisor/Steuerberater.
It costs just £15.00 to form a UK company online and it is formed within 24 hours of submission. It would provide very cheap protection against the events of last Thursday - Black Swan as they may have been. The UK is really one of the best place to do business and possibly why is it is doing so much better than the rest of Europe. Greece is a completely nightmare and Italy (as Mario has confirmed) is little better. Almost everything can be done on line with the minimum of officialdom. For example small companies do not need audited accounts which saves a massive amount on audit fees every year.
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