Broker reverses $20K winning trades for alleged latency arbitrage | Page 31 | Forex Factory

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Broker reverses $20K winning trades for alleged latency arbitrage

  • #601
  • Jan 11, 2016 7:17am Jan 11, 2016 7:17am
Forex.com was my 1st so called 'broker'. 2004 ? maybe. It took me less than 30 days to close account. Some of the worst forex service out there then. Being based in NJ never helped.
FF = Forex Faggots
  • #602
  • Jan 11, 2016 10:52am Jan 11, 2016 10:52am
He said he had 10 to 15 seconds latency on price. Thats a lot !! Is there any such thing? Is there any brokers who has price latency compared to other brokers? Is arbitrage outlawed wth all brokers?
Let the Market come to you
  • #603
  • Jan 19, 2016 2:48pm Jan 19, 2016 2:48pm
Quoting mry2001
{quote} All Retail forex brokers are casino, not just forex.com what do you think you are buying or selling? Physical currency? Of course it is not. Unlike stock trading where u can request a certificate of shares u own. U never ask your retail broker/dealer to show the currency u sold or bought because they never existed!! Think of it. It is just a online casino game. Many brokers accept deposit/withdraw from SKRILL, which is linked to poker games and gambling. What is the difference between online gambling and online forex trading. There is not...
or trade in currency futures if you can stand the horrible leverage and only the tiny-sized brokers available to Canadians besides IB.
Make your losses in demo. Earn your profits live.
  • #604
  • Jan 19, 2016 4:38pm Jan 19, 2016 4:38pm
I have a question. How many would you agree that the second you enter your order into the market, they know; what your stop loss is. If you use Leverage you have an automatic stop loss; called margin call. Without leverage a regular joe, wouldn't be able to enter an order into the market. Most people let losses run for thousands in pips, imagine how many pips you would of won going the opposite way of your Bias. Here is proof of people holding onto thousands of pips in red.

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  • #605
  • Edited 10:57am Jan 20, 2016 3:25am | Edited 10:57am
Quoting OilNoob
I have a question. How many would you agree that the second you enter your order into the market, they know; what your stop loss is. If you use Leverage you have an automatic stop loss; called margin call. Without leverage a regular joe, wouldn't be able to enter an order into the market. Most people let losses run for thousands in pips, imagine how many pips you would of won going the opposite way of your Bias. Here is proof of people holding onto thousands of pips in red. {image}
If they use what is called a "Virtual Dealer Plugin" in MT4, they know EVERYTHING that you do in your account the SECOND that you do them, your trade entry price, stop-loss, tp target. And on top of that, they of course know all of your account information like how much money you have left in your account and the margin that you face and etc. With all that information, they know EXACTLY how much pain you can take and the approx. amount of risk that you are willing to take and with the Virtual Dealer Plugin, they can hunt your stop, delay the execution of the trade, reject your order and requote, widen the spread all those wonderful things just to bleed you dry but still leave you alive enough to keep you going.

And then they dangle those bonuses in front of you to make you deposit more money so they can bleed you more.
Make your losses in demo. Earn your profits live.
  • #606
  • Jan 20, 2016 8:10am Jan 20, 2016 8:10am
Quoting Forexia
{quote} If they use what is called a "Virtual Dealer Plugin" in MT4, they know EVERYTHING that you do in your account the SECOND that you do them, your trade entry price, stop-loss, tp target. And on top of that, they of course know all of your account information like how much money you have left in your account and the margin that you face and etc. With all that information, they know EXACTLY how much pain you can take and the approx. amount of risk that you are willing to take and with the Virtual Dealer Plugin, they can hunt your stop,...
Knowing all that, do you still trade live ? If yes then do you have a way to avoid all those scary things you mentioned above ? If we are that much at the mercy of brokers there is no point to keep on trading.
  • #607
  • Jan 20, 2016 10:55am Jan 20, 2016 10:55am
Quoting metta87
{quote} Knowing all that, do you still trade live ? If yes then do you have a way to avoid all those scary things you mentioned above ? If we are that much at the mercy of brokers there is no point to keep on trading.
1. DON'T trade with market maker brokers.

2. DON'T use MT4

Yes I still trade live.
Make your losses in demo. Earn your profits live.
  • #608
  • Jan 21, 2016 6:54pm Jan 21, 2016 6:54pm
I'd just like to point out, that whether you use MT4, tradestation, FxTrade, Ninjatrader, CTrader...it doesn't really matter. The broker still has back office control. They can still widen spreads, still affect latency and still requote you.
Essentially a platform is just a GUI. The function is still the same, they still receive quotes from LP's via a bridge, and their in house software then processes the quotes into the platform.
Arguably MT4 is more open to corruption due to it's very nature, but using another platform won't make all these things go away. In fact they can become harder to detect in some cases.

The truth is, there are no good brokers. Some are just worse than others.
There are ways to avoid being flicked out of stop losses, and ways to ensure you exit a trade at the right level. That's up to us as traders. We should always be aware that when the price comes within a pip of a SL, it's open season.

If you are always on the negative side of slippage and spread widening, then it's best just to change broker.
Wealth comes from what you keep, not what you earn
  • #609
  • Jan 23, 2016 6:56pm Jan 23, 2016 6:56pm
I have experienced all of the above with mongrel brokers,but I gotta say this,and I get nothing out of it it is just my opinion,I have been with Global Prime for about 3yrs now and they are prompt to fix mistakes and they look after their customers ,I have had money reimbursed to me because of a issue at there end on 2 occasions and they where onto it immediately,they are worth looking into guys.
GW
IMPROVISE ADAPT OVERCOME
  • #610
  • Feb 24, 2016 11:51pm Feb 24, 2016 11:51pm
Quoting yunben
I've received their final reply. shameless fraud. Dear Mr. Yun, After a review of your account, your complaint is not upheld and we now consider this matter closed. If you are unsatisfied with our decision on this matter, you may refer your complaint to the Financial Ombudsman Service within six months from the date of this email. http://www.financial-ombudsman.org.u...complaints.htm Sincerely, {image} Stephanie Bromm, Compliance Manager | GAIN Capital Forex.com UK Ltd. d: UK +44...
You should report this to NFA and other Regulators in UK, so Regulator aware and investigate correctly on this matter.
  • #611
  • Feb 25, 2016 3:30am Feb 25, 2016 3:30am
Quoting trader34
I'd just like to point out, that whether you use MT4, tradestation, FxTrade, Ninjatrader, CTrader...it doesn't really matter. The broker still has back office control. They can still widen spreads, still affect latency and still requote you. Essentially a platform is just a GUI. The function is still the same, they still receive quotes from LP's via a bridge, and their in house software then processes the quotes into the platform. Arguably MT4 is more open to corruption due to it's very nature, but using another platform won't make all these things...
And this is WHY I don't use SL and just monitor my trades and close them manually when necessary.
Make your losses in demo. Earn your profits live.
  • #612
  • Feb 25, 2016 3:33am Feb 25, 2016 3:33am
Quoting mmswe
{quote} You should report this to NFA and other Regulators in UK, so Regulator aware and investigate correctly on this matter.
He already did. He reported this to the FCA in UK, one of the toughest regulator in the world and this is the response that they gave him, completely siding with forex.com.

I am not sure if NFA would even bother to listen to him since he's not a USA citizen and his account is not with forex.com in US.
Make your losses in demo. Earn your profits live.
  • #613
  • Feb 25, 2016 3:58am Feb 25, 2016 3:58am
Quoting Forexia
{quote} And this is WHY I don't use SL and just monitor my trades and close them manually when necessary.

Exactly what I do for the same reason.

Quote
He already did. He reported this to the FCA in UK, one of the toughest regulator in the world and this is the response that they gave him, completely siding with forex.com.

I am not sure if NFA would even bother to listen to him since he's not a USA citizen and his account is not with forex.com in US.

It doesn't matter who he reports this to, there will be no resolution. He will be unable to prove his case, and the broker is acting within the small print of their agreement.

People should understand that regulation, even in the highest categories is extremely limited. Mostly all it does is restrict how the broker segregates your funds, anti money laundering policy, and dictates how much operating capital they are required to have.
Due to the small print agreements we all agree to with live accounts, there is precious little any regulator can do at individual level if you have a grievance with your trading conditions.
Even when the NFA fined FXCM and Gain capital (Forex.com), it took a huge number of complaints and a lengthy investigation to bring this result.....and still the situation hasn't changed.
http://www.financemagnates.com/forex...-clients-back/
Wealth comes from what you keep, not what you earn
  • #614
  • Feb 25, 2016 9:26pm Feb 25, 2016 9:26pm
In Australia, it does not matter what the terms and conditions are, they have to be fair. Brokers can put what they want in the PDS, if it is not fair, it will be voided by FOS. I guess that is the difference between regulators. Traders prefer FCA regulated brokers because of the 50K pound guarantee etc. There is no such guarantee in Australia (as all guarantee comes at a cost). Before the GFC, australian banks do not have any gaurantees since they don't need one. But when every country starts having guarantess during GFC for their banks, Australia is forced to introduce one.

in the above forex.com case, I can almost certain that a broker cannot cancel only winnings but let the losses remain. The broker can cancel all wins/losses within the certain period if they can "justify" it. This is the only leeway that I can think the broker can take. the Broker can also disown you as a customer and force you to withdraw all funds from your account - this include all profits, FOS may also agree with this action since Brokerage is not a monopoly business and allow to choose their customer (just like a restaurant).

I work in a financial institution and had seen FOS power. If you are serious trader, try australian brokers. Personally I prefer home-grown australian brokers.
  • #615
  • Feb 25, 2016 10:01pm Feb 25, 2016 10:01pm
Quoting reddevil
In Australia, it does not matter what the terms and conditions are, they have to be fair. Brokers can put what they want in the PDS, if it is not fair, it will be voided by FOS. I guess that is the difference between regulators. Traders prefer FCA regulated brokers because of the 50K pound guarantee etc. There is no such guarantee in Australia (as all guarantee comes at a cost). Before the GFC, australian banks do not have any gaurantees since they don't need one. But when every country starts having guarantees during GFC for their banks, Australia...
Yes good suggestion ... I have good faith in Australian system so I prefer ASIC regulated brokers, such as ThinkForex and AxI .. By the way, what is your most prefer AU homegrown broker?
  • #616
  • Feb 26, 2016 2:04am Feb 26, 2016 2:04am
Quoting trader34
It doesn't matter who he reports this to, there will be no resolution. He will be unable to prove his case, and the broker is acting within the small print of their agreement. People should understand that regulation, even in the highest categories is extremely limited. Mostly all it does is restrict how the broker segregates your funds, anti money laundering policy, and dictates how much operating capital they are required to have. Due to the small print agreements we all agree to with live accounts, there is precious little any regulator can do...
Very true although they WERE also able to fine FXCM for unfair slippages and since then there has been improvement. So those regulators ARE able to do something IF they REALLY want to, at least against forex brokers which are still comparatively small size compare to all those banks and huge brokerage powerhouses against which the regulators are REALLY powerless to do anything.

And in this Yunben's case, I really feel FCA dropped the ball on the trader. The onus in this case is NOT really on the trader but on forex.com aka Gain Capital to prove that the trader was engaging in "latency arbitrage" which justified their forceful confiscation of the trader's profit. I believe in any agreement, it does guarantees at the least that clients are allowed to withdraw their profit so it's Gain Capital who is the guilty party here being in breach of the terms of the agreement so it should've been Gain Capital to prove the reason that justified their action. The fact that FCA right away forced Yunben to prove his claims which is already a granted right under any regulations and agreement is obviously biased and unjust.
Make your losses in demo. Earn your profits live.
  • #617
  • Feb 26, 2016 5:27am Feb 26, 2016 5:27am
mmswe,
each trader need to evaluate which broker is best depending on his/her trading style, I choose my Australian broker based on the criteria in this order:

1. zero cost to deposit & withdraw ( to Aussie banks) - I was surprised some not homegrown Aussie brokers charge for local withdrawal !.
2. Has Bpay facility to deposit. For those traders intending to use Australian broker, fly to Aus and open a bank account here. Do not use internet banking to fund, use Bpay. Bpay is a Australian wide vendor payment facility. Vendor receive a file each day from their bank on all incoming funds only. For internet banking, the file that vendor(broker) received contains both incoming/outgoing funds and matching these with your accounts leave room for error. With Bpay, all transactions in the file are incoming funds, the transaction id and vendor id is unique when you make your deposit. There is no room for error.

Next I consider the following:
1. spread & commission ( I trade 21 pairs via my EA), so it is not just EU but minor pairs as well. Average 50 lots a month, so spread matters!
2. cTrader is a must. My wife use this for manual trading but EA runs on MT4.
3. Client area that can access all my trading accounts(live & demo) and real-time transfer of funds between live trading accounts- between ctrader & mt4.
NOte: Client area allows you to create a live account and the passwords is stored here and is visible. Which means it is accessible by broker staff. I changed my password within MT4 or Ctrader software just before trading live.

Lastly:
Trading server preferably in NY since VPS in USA is cheaper than UK. I do not use VPS from forex VPS provider since normal VPS providers are cheaper.

I only started trading live 2 years ago and this is my observation on my broker ( I have not changed my live broker, had many demo accts from other brokers):

1. Slippage is both positive and negative - it is not dependent on the execution latency. i.e high latency trade 600ms could have +ve slippage and low latency 200+ could have -ve slippage. and vice versa. My EA records the details and it is quite consistent across all market hours, usually <= +-1 pip.

2. Funding by Bpay is reflected on my trading account by 9 - 10am the following business day.
3. Withdrawal - I submit by 9am when I get to the office in the morning and the money is in my bank acct that evening.

My broker is IC market and the one thing that wins me over compared to other aussie brokers is non expiring demo acct.

Like all traders, I am always searching for a better broker
Have a great weekend.
  • #618
  • Feb 26, 2016 9:55am Feb 26, 2016 9:55am
Quoting reddevil
mmswe, each trader need to evaluate which broker is best depending on his/her trading style, I choose my Australian broker based on the criteria in this order: 1. zero cost to deposit & withdraw ( to Aussie banks) - I was surprised some not homegrown Aussie brokers charge for local withdrawal !. 2. Has Bpay facility to deposit. For those traders intending to use Australian broker, fly to Aus and open a bank account here. Do not use internet banking to fund, use Bpay. Bpay is a Australian wide vendor payment facility. Vendor receive a file each day...
Wowow .. Really great explanation and I learned a lot .. Thanks so much Dude .. I am looking into ThinkForex so I can use this as meter ...
Have a wonderful weekend too
  • #619
  • Feb 27, 2016 9:02pm Feb 27, 2016 9:02pm
Who else is using this 'brokerage'? I can't.....believe....
  • #620
  • Feb 28, 2016 1:36am Feb 28, 2016 1:36am
Excuse me for playing the devil's advocate here.
But why would any broker not screw around with the customer funds ?
Do you really think that any broker does not have meetings at least 3 times a week on how to "maximise profit from OUR customer funds" ?
Even if they are "heavily regulated", then they will still screw with your account while staying within the rules.
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