Brokers chasing you for negative account balance | Page 11 | Forex Factory

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Brokers chasing you for negative account balance

  • #201
  • Jan 20, 2015 8:05pm Jan 20, 2015 8:05pm
Quoting verv
Thanks to the 94% of traders on my broker who were long on eurchf, my broker is now bankrupt.
Go after the "Big Banks" that drove your broker to bankruptcy! If they were willing to forgive the negative balances owed by your broker to them, your broker might have survived.

Sorry for your trouble man.
Make your losses in demo. Earn your profits live.
  • #202
  • Jan 20, 2015 8:09pm Jan 20, 2015 8:09pm
Quoting Forexia
{quote} No a price that suits both me and the counter-party. That's the free market concept otherwise it's called dictatorship. BUT they need to present a price quote first.
They do not have to do anything, neither you do. It is why it is called 'free'. There is no obligation to trade. No one wanted to buy yours/sell you apples at that time. Not for your price, anyway. It is one of fundamental rules of trading. Your proposal is actually close to some sort of dictatorship, communism perhaps. Completely against free market spirit.
  • #203
  • Jan 20, 2015 8:09pm Jan 20, 2015 8:09pm
Quoting maxvre
Somethings not right with what is going on. Broker software trading platforms didn't honor traders stops or account margin call levels built into the platform to protect the account, yet the retail traders are being asked to pay back the negative balance (by some unethical brokers) even though it was caused by the system failing and through no fault of the trader. Brokers who chase retail clients for negative balances need to be boycoted by the retail trader community. Something should be setup to warn traders not to use these companies in future...
It's been said a heap of times this week already but I will say it again. Entering is a trade and exiting is a trade. Sure , you should never trade without stops ( those that do deserve all they get ), but stops are not guaranteed. Yes, even when the broker advertises "guaranteed stops" . They guarantee them under their own terms, nothing new in business there. If there is nobody there to be on the other side of your stop order, it has to move until it finds one. Sure the chf was an extreme move, but look around, there has been bigger moves in other markets this week already ( take a look at FXCM stock price for example).
What do we learn people, there are NO guarantees in trading. Those that think that there should be, and there are a few vocal numbies on here, need to go back to the basics in life. Death and taxes, they're guaranteed, nothing else.
As for more regulation, you get into this knowing what the regulations are, if you don't like them don't get in. Don't enter and then set about trying to change the world because it doesn't suit you.
  • #204
  • Jan 20, 2015 8:09pm Jan 20, 2015 8:09pm
Quoting grin
{quote} Uncomfortable to admit that there would be no fuss about taking extra gains from a liquidity gap?
Good point! What if your broker close your trade well below your TP and also deny the additional 2000pips profit during a crazy spike claiming market irregularity, what then? That's why there are regulators, they are there to make sure both broker and investor's interest are protected and its a fair (of course never perfect) game for everyone. It would be interesting to see what they do after this.
  • #205
  • Jan 20, 2015 8:12pm Jan 20, 2015 8:12pm
Quoting verv
I'm not going to get much likes for this post. But the people who didn't act responsibly where those who leveraged their account to such a degree that they wiped not only themselves out but potentially lost other people money as well. Thanks to the 94% of traders on my broker who were long on eurchf, my broker is now bankrupt. Thanks to all those who didn't consider that once the floor broke there wouldn't be a buying anywhere near the 1.2 peg, yet you guys expected to be able to get out with pin sharp accuracy. Thanks to those guys not paying back...
Well done for understanding and bonus points for accepting the risk of what it is we do.
  • #206
  • Jan 20, 2015 8:15pm Jan 20, 2015 8:15pm
I would not want to add salt where wounds are plainly and actively open however what better time to shed light on the "wood shed".

Many years ago when I had a live account with GFT I watched a remarkable thing or at least appeared remarkable at the time. I was an amateur back then and traded like the typical new game fool. Long story short I burned the account to the fumes of margin. I watched the screen as the trade (In a slow market No volatile action) as the account went to Zero yes Zero, then a pip positive then zero .. then negative balance. This all happening real time in a slow typical movement No news no action. I went further negative stayed awhile, then up some that after several minutes it magically margin call closed with a simple zero balance.

My point is simple and blunt. Unless your trading on an exchange or at the least some variation of an ECN mechanized system. You are nothing more than trading against your own deposited piggy bank that the broker holds snugly for you as they feed you a price into your platform all the while knowing they stand to lose nothing when your going the wrong way simply keeping your deposit when you bank out to zero dollars left in the jar. They have one simple and entire focus and that is make sure they hedge against the right way traders As Much As Possible! last week with the "Swiss Punk Stunt", well "they" the spot brokers got some screwing themselves.

As a measure of what ever you want to call it. Good Will, Good favor, Market Moral. A few brokers chose not to finish the knife cut to their traders on book that got Negatized! forgiving the below zero balance created in the video game you against them trading game. They did not lose any real money per your negative balance, Just You Did! As for the Greedy ones well. They want the Virtual money you lost in Real Dollars.

I quite trading Spot as of December 2014. I simply trade with a futures broker on a real exchange with the same price and movement that everybody else see's. Now price can move quick in an exchange setup just as well, however many instruments have circuit breakers to keep from having a runaway train. Not a perfect solution but very effective for the most part. I know first hand as I have had trades booth good and bad caught in the whirl-winds of a circuit breaker move action.

Trading is a very twisted adventure these days, it has gotten quite hyper temper mental as the high frequency rigs have covered huge amounts of trading space, they are predatory and very VERY fast.

You can trade full, mini , micro on the majors (CME) with most any futures broker of credible reference.

As I have not closed the Oanda account I got this generic attached email, that being the only reason I knew about the Swiss Stunt Not following Forex much at present.
What a idiotic scam the Swiss played. This could have been a somewhat pre informed roll out vs a foot in the can blunt blow.
Attached Image (click to enlarge)
Click to Enlarge Name: Oanda.jpg Size: 124 KB
"Look Left Think Right"
  • #207
  • Jan 20, 2015 8:23pm Jan 20, 2015 8:23pm
Quoting CurrencyAnalyst
I would not want to add salt where wounds are plainly and actively open however what better time to shed light on the "wood shed". Many years ago when I had a live account with GFT I watched a remarkable thing or at least appeared remarkable at the time. I was an amateur back then and traded like the typical new game fool. Long story short I burned the account to the fumes of margin. I watched the screen as the trade (In a slow market No volatile action) as the account went to Zero yes Zero, then a pip positive then zero .. then negative balance....

I am with Oanda, too, but I have not been touching any CHF pairs since they pegged it first to EUR in 2011. Even then it was just a demo, but the lesson was spectacular enough. IMHO, what they have done now is a PR-motivated matter of courtesy. My guess is they think it will be more profitable for them to attract new customers by doing so, rather than chasing up those few who are in the red. Still, this is not something they have to do.
  • #208
  • Jan 20, 2015 8:38pm Jan 20, 2015 8:38pm
Quoting Forexia
{quote} {quote} Correction: LP's erasing liquidity by artificially stopping price quotes that caused the precipitating drop in prices which in turn caused this massive negative balances by traders and brokers. They chose to abandon the market leaving us holding the bag of s***. Well this is REALLY their shit which they created themselves so WHY should we pick up the tabs? .
Your being incredibly short sighted and foolish. While you complain about conspiracies to take money from traders an entire economy was just effected. Businesses, government, every private citizen, anyone who deals with Swiss Banking from anywhere else in the world are dealing with the blessing or curse of a 30% change in the value of anything that can be valued in terms of money.
  • #209
  • Jan 20, 2015 8:41pm Jan 20, 2015 8:41pm
Seems like OANDA is trying to grab people from inactive brokers. Smooth move?
  • #210
  • Jan 20, 2015 8:49pm Jan 20, 2015 8:49pm
anyone with admiral market australia？
  • #211
  • Jan 20, 2015 9:15pm Jan 20, 2015 9:15pm
Quoting tommy111
anyone with admiral market australia？
I don't with them personally, but know some who do. From the sounds of it the took a small loss, so that shouldn't change things. Just margin requirements which I imagine all brokers will do on small accounts.
  • #212
  • Jan 20, 2015 10:08pm Jan 20, 2015 10:08pm
Quoting Forexia
{quote} Of course I accept the extra gains from the positive slippages beyond my TP price that was created by liquidity "providers" stopping liquidity, what kind of stupid question is that. If they expect me to accept the -ve negative slippages beyond my stop-loss level then they should expect me to accept the positive slippage. If they are willing to forgive negative balances beyond my stop-loss then yeah I can see the merit of not wanting to honour the positive slippage. There.
So ALL your arguments then are hypocritical. This question was the most pertinent asked and you answered it beautifully and highlights that everything you have said about the negative balances due to the massive slippage and gaps created by the event as moot. Your answer that you would happily accept the positive gains but refute the negative is exactly the answer needed.

If they expect me to accept the -ve negative slippages beyond my stop-loss level then they should expect me to accept the positive slippage

Everything you have argued hasn't been about the expectations of the broker, it has been about you not accepting negative balances as a Moral outcome because the bank screwed you or others when in fact it was the reckless trading that screwed people. The fact that you deny negative balances as a result of gaps but accept the gains of positive gaps sums up everything.

Hypocritical beyond words. I can finally put you on my ignore list.
  • #213
  • Jan 20, 2015 10:26pm Jan 20, 2015 10:26pm
Quoting Razor_trader
{quote} So ALL your arguments then are hypocritical. This question was the most pertinent asked and you answered it beautifully and highlights that everything you have said about the negative balances due to the massive slippage and gaps created by the event as moot. Your answer that you would happily accept the positive gains but refute the negative is exactly the answer needed. If they expect me to accept the -ve negative slippages beyond my stop-loss level then they should expect me to accept the positive slippage Everything you have argued hasn't...
There is absolutely nothing hypocritical about me accepting me positive slippages that those liquidity "providers" has caused by stopping price quotes. They expect me to accept negative slippages that I had to suffer due to them stopping liquidity and I can't enjoy the positive slippages that they also created by unscrupulous actions?

Anyway whatever goodbye and good riddance! One troll gone, 10 to go!
Make your losses in demo. Earn your profits live.
  • #214
  • Jan 21, 2015 12:17am Jan 21, 2015 12:17am
Quoting Forexia
{quote} No a price that suits both me and the counter-party. That's the free market concept otherwise it's called dictatorship. BUT they need to present a price quote first.
Quoting a certain price shows willingness to buy/sell, not quoting a price at a given time shows an unwillingness to buy/sell. Since you don't even grasp such a basic concept, it's not surprising that you have blown up your account. You are not informed enough to be trading forex.
LPs quoted where they wanted to buy/sell, which was thousands of pips away, & the reason they did because CHF had been massively undervalued due to SNB's intent to peg it to EUR. You wanted to sell but nobody wanted to buy it at the level you wanted to sell, so your order was settled wherever others wanted to buy, so what's there to moan about? That's how a free market works!

You intend to FORCE liquidity-providers, through regulations, to buy/sell at levels they don't want to, that's what's called a dictatorship. There's no way you're going to get what you want from the regulators because governments sell their power to the highest bidder, & you, with your $100 blown up account are never going to be it but if regulators do notice moaning of people like you, the only thing they'll do is to shut you out of the market so you don't have any reason to moan. Forex industry will be ok with that but retail forex might not be.

You'd not want to take a trade knowing that you'd lose money in it but you expect LPs to do just that in order to protect your sorry @ss.
You'd not like to be forced to make a trade that you don't want to take but you think it's ok to force LPs to do just that.
You'd not mind accepting profits caused by price-gaps but moan about losses caused by price-gaps.
In short, you are hypocrisy incarnate!
  • #215
  • Edited 12:27am Jan 21, 2015 12:18am | Edited 12:27am
The sword fight simply wont get the lost wages back. Yes Indeed It's very angering to feel that you have been targeted and cheated one on one.

Slippage is not what was the big picture problem within the defining perimeters of price momentum over the Swiss debacle. (Why traders could not exit, even manually)

Slippage is a subtle and recognizable minor disturbance or rather opportunistic price click gearing between like or common instrument thru the walk of price change within an electronic mechanized presentation.

Simply put an advantage or timing issue between an entry fill as comparable to what was presented for offer on screen. MT4 was famous for the re quotes back in the big getting screwed FX trading arena as well as many stand alone platforms. Yes you could set some platforms to take a direct market fill at what ever comes up and for the most part get the exact numbers or within reason a close fill. (Limit Orders are no good unless the price existed to get hit and when yours was entered among others if so that the units queried for fill indeed were still an actual bid/offering)

Then comes the pipet's a clever way to squeeze more from the till without being highly noticed. With that we get the first big lawsuit against "0000" For cheating positive fills and for sure cheating on the negative side.

Even in the most liquid market on the planet. U.S. Treasury bond/ tnote trading I have gotten 1 tic off offer or bid skewed fills in or out.

please take a moment to realize this one simple thing. It's machines making up price discovery points along the ladder of bids and offers. They are very quick and ghosting occurs all day long. When I speak of this I am primarily defining an exchange traded environment but Wow just look at the hideous opportunities with staggered price quotes taking favor from one broker to another ever changing off exchange. You just can't see it all.

The huge difference between SLIPPAGE and GAPPING is likened to letter A vs Z. Gapping is where price is Y.XY here and then appears again as if on the other end of a worm hole as YY.XYX if even a second later. Every number conceivable between the two points never existed. This is not a definable slip in count. It's a Jump in Value up or down.

it's gettable yes, when you get a little bonus on the fill you feel good and when the thing slips indeed words come to mind.

Don't beat each other up over semantics with this. Trading was never supposed to be rocket science.
Attached Image (click to enlarge)
Click to Enlarge Name: PRICE DYNAMICS 101.jpg Size: 66 KB
"Look Left Think Right"
  • #216
  • Jan 21, 2015 12:41am Jan 21, 2015 12:41am
to forexia's point ,, I think his concern was lack of any quotes for a period of time... and perhaps he would have been totally fine even if they were quoting price at 0.06 (the lowest proclaimed ) through this period ...


well practically lack of quotes is understandable in this situation as nobody even the big banks were sure OF THE TRUE PRICE ( as there was no time to assimilate the news) -- perhaps would it have had less impact had SNB announced during the weekend .. (apparently they wanted to do this before 22nd so did not have this option) .. just wondering if in case they had that chance .. would it have helped ...


Quoting r41225
{quote} Quoting a certain price shows willingness to buy/sell, not quoting a price at a given time shows an unwillingness to buy/sell. Since you don't even grasp such a basic concept, it's not surprising that you have blown up your account. You are not informed enough to be trading forex. LPs quoted where they wanted to buy/sell, which was thousands of pips away, & the reason they did because CHF had been massively undervalued due to SNB's intent to peg it to EUR. You wanted to sell but nobody wanted to buy it at the level you wanted to sell, so...
  • #217
  • Jan 21, 2015 12:45am Jan 21, 2015 12:45am
Quoting spaceduck
{quote} That was my point, the losses from this snb event are really minimal, seems like mostly only the retail traders have lost, and retail brokers too as a result. Again, retail fx brokers are not really important in the forex market, we are just small speculators that don't have any relevant effect on the market, let's just say that if the retail industry would completly fall down, like if fx trading would be declared illegal worldwide (this is just an example), the fx market would continue to work exactly like before, nothing would change....
Spaceduck, thanks for taking the time and having the patience to break things down to novice and advanced beginner traders on this thread. I hope they take your words and meditate on them for awhile.
If you are good at something, never do it for free--Joker
  • #218
  • Jan 21, 2015 12:54am Jan 21, 2015 12:54am
Quoting CurrencyAnalyst
The sword fight simply wont get the lost wages back. Yes Indeed It's very angering to feel that you have been targeted and cheated one on one. Slippage is not what was the big picture problem within the defining perimeters of price momentum over the Swiss debacle. (Why traders could not exit, even manually) Slippage is a subtle and recognizable minor disturbance or rather opportunistic price click gearing between like or common instrument thru the walk of price change within an electronic mechanized presentation. Simply put an advantage...
Wow, you even went through the trouble of posting graphic of how a market works!

I now understand that a lot of people do not know this.

Thanks for educating the novices and advanced beginners.
If you are good at something, never do it for free--Joker
  • #219
  • Edited 1:53am Jan 21, 2015 1:14am | Edited 1:53am
Quoting Moka
few points: 1) "So maybe this is what should happen with the LP level. More and more banks should be encouraged to join in to offer liquidity so the forex market liquidity is not controlled in the hands of the 80%. Brokers would have more choices when they are shopping for liquidity brokers." But is it not true that every player is a liquidity provider? What i mean is in a OTC or a exchange some instruments are so popular that there are enough buyers and sellers present so one does even need special liquidity providers or designated market makers? SO it would be interesting to see what % of trades are actually settled just between retail players so LP's has no role!
Banks trade in the forex market as much out of necessity as they do for profit. People in different parts of the world have to buy/sell foreign currences for various reasons (import, export, travelling, etc), for this, they go to banks, & banks, in turn, hedge their exposure on the forex market while hoping to make a profit, if possible; this is the whole reason why forex market exists in the first place. So obviously, banks, especially megabanks are going to be the biggest participants in forex so if traders were to trade amongst themselves (presumably through a broker who internally matches all orders) then there wouldn't be enough liquidity & spreads would be massive. Yes, we're all in essence liquidity providers but retail trading is only small chunk of the forex market. All banks, that are exposed to foreign currencies, are directly or indirectly connected to forex market, they have to be, so unless you have a few billions or trillions to spare to start new banks, talking about bringing more banks into the market is pointless. And, it's not necessarily about "control" per se but it would be natural that the biggest banks have the highest volumes on the market since they are the ones most exposed to various currencies but they are all competing amongst themselves (& everyone else) to make the most profit (as we all are), which is what ensures competitive pricing.

Quoting Moka
2) Leverage: how can people complain about Negative balance when one hand they want huge leverage like 100:1 or worst 200;1 It is a double edged sword how can you complain only about one side? Imagine for stocks you take 1:1 leverage ( in US in Aus it is 1:3) WHY DO YOU EXPECT THE BROKER WHO HAS LEND YOU THE MONEY SHOULD SUFFER? HE WANTS HIS MONEY BACK it was loan YOU ARE the one who wanted to "enhance" your returns! Say yo long a stock with 50% borrowed money and fraud happens at the company stock tanks 80% is it the broker's fault? there will be a margin call! simple
Fair enough. I don't think it's unfair for brokers to ask their traders to pay the negative balances but in most cases, it's going to be pretty difficult for them to recover that money so I feel that may be brokers should arrange for some sort of insurance for events like these in order to protect themselves & their traders.

Quoting Moka
Having said that I have a question given that Margin fx is a zero sum game does the broker actually physically lend real cash? like the equity broker does? Take an example: Mr A goes long xyz pair notation value 100000 with his own 1000 and Mr B is the other side of trade with his 1000 so in real physical terms has the broker actually lent 2 x 99000? I don;t think so al he has done is matched the two parties made the spread and just like futures each account is marked to market every day or every second! so when somebody said brokers lends 99K is...
Firstly, don't confuse spot & futures; forex is a spot market, akin to buying stocks in the cash market. It should be obvious that most brokers just don't have the amount of money that would be required to lend to all of their clients, they arrange for credit lines from banks, which is a sort of a short-term loan. Obviously, it goes without saying that this holds true for those brokers that actually hedge their exposure with their LPs, not those who keep all their orders in-house.
  • #220
  • Jan 21, 2015 1:29am Jan 21, 2015 1:29am
I received a call from a Fxcm representative saying they will not cover negative balance, that I am responsible and I should wait for the official claim from their side.

I specifically asked when opening the account if I can get to negative balance and they said: "No way"

Should I wait for their claim or should I be proactive and request officially for them to cover my negative balance as they promised?
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