HOW YOUR FOREX BROKER CHEATS YOU

Identifying the Signs and Seek Justice for Yourself

Presented by Matthew J.www.FXBuild.com

Obvious Thing :

Your forex broker is in the business to make profit, as ALL companies do, …

BUT…

There are LIMITS on what they can

and CANNOT do in terms of

MAKING PROFITS

Well, ETHICALLY anyway

What about un-Ethically?

Stop Loss Hunting/Spikes Spread Widening Slippage Re-quotes/Order Rejection Platform Disconnect The Infamous “Virtual Dealer

Plugin”

Stop Loss Hunting / Spike

As the name implies, stop loss hunting means a bit of price movement “modification” to make sure your Stop Loss got hit and triggered.

The common method for this type is ….

Artificial price spike

Usually can be identified by comparing market movement (on charts) with other brokerage.

Spread Widening

Spread widening isn’t always your broker fault since some of them only streaming price from their liquidity providers.

However, some of them do add several pips to already widened spread to earn a few extra pips from their clients.

If you’re a news trader, make a habit to compare spread widening between brokers at news release time.

Slippage

Slippage, by itself, is not cheating. If price is moving really fast, your broker might have no choice other than executing your broker at slightly worse price.

Your obliviousness might be used by a cheating brokerage to add a few artificial slippages to earn some instant profit from your trade.

Re-quote/Order Rejection

Requote, by itself, is not cheating.

If you’re trading at an instant execution broker and price has moved when you submit your order, they have no choice other than rejecting your order and give you re-quote.

But, there are brokerages that will intentionally give out requotes is to gain a few extra pips or they planned to be your trade’s counterparty.

Platform Disconnect

Platform disconnect can be triggered by many factors, including your own machine/internet connection.

These occurrences can be used to blur the cause when a cheating brokerage actually disconnect you to prevent you from doing something (eg: closing/opening order at good price)

Virtual Dealer Plugin

This technology has been around for a few years

Some would say that this is how fixed spread brokers protect themselves against the wild market movement, which – essentially - beyond their control.

Basically, this software could do all things mentioned above automatically with some parameters set.

.

Regardless the reason, the use of this software is considered as unethical

Sniffing the Signs

“Hide the leaf in a forest” is a good sayings to illustrate this practice.

You don’t know which occurrence (slippage, requote, etc) is

intentional and which is natural.

However, if you notice a bit too many “coincidences” happened that prevent you from gaining

profits, it is time to:

Recording your order number Start taking screenshot/video

whenever this “phenomenon” occurs Comparing spikes that result in

triggered stop-loss with other brokerage charts

Or simply leave the broker altogether

If you think you’ve been cheated, the first step is of course contacting the broker’s support and tell them your complaints,

HOWEVER…

If you were indeed being cheated,

it is very likely that you will only get generic/long delayed answer from their support staff, designed to tire you and make you get over it eventually.

What to Do Now Is…

Make A Fuss Out of It

Classic technique:

Simply share your experience in big forex forums and review sites.

*I did this once, and got compensated for writing “problem solved” on all my reviews and threads

Why this works?

Quite simply, when you contact themprivately, you’ll talk with a support staff that do not know anymore than you do, thus, the generic answer.

BUT…

… when the company’s reputation is on the line, you’ll probably attract big boy(s) that (might) have the power to solve your problem

HOWEVER….

Complication

… you’ll probably be against more experienced guy in handling such complaints on public

When you think you already corner him with your proofs and ask him to do what you want, he will make his own argument and ask you to do what he wants, creating a deadlock situation

The Usual Answer is “this matter cannot discussed in public because it involves confidential information, please contact our support on..”

This remedy create TWO scenarios, both to his advantage:

1. You Refuse to Adhere to His Request

This creating an excuse for him not to explain anything further, reasoned that you haven’t submit a complaint to support, thus, the ball is in your court

2. You Do What He Wants and Submit Complaints to Support

In this case, you’ll get further generic/delayed answer..

*I’d go straight to regulator at this point, but if you want to keep playing the game..

… then adhere to his request, BUT make sure to post every updates in forums by screenshots, including unanswered emails and generic response.

If this still doesn’t yield anything useful, then go straight to regulator’s complaint form

Complaint to Regulator

If you did yourself a favor by choosing a regulated broker, it’s time to take the benefits from it.

Most strong regulator has complaint form you can use. Of course, you have to present valid proofs and your actual identity information.

Here’s where you can submit: NFA:

http://www.nfa.futures.org/basicnet/Complaint.aspx

FSA UK: http://www.fsa.gov.uk/pages/consumerinformation/if_things_go_wrong/who_to_complain_to_1-2-3/index.shtml (through Financial Ombudsman Service)

CySEC: http://www.cysec.gov.cy/complaints_cifs_regulated_en.aspx

ASIC: http://www.asic.gov.au/asic/asic.nsf/byheadline/Report+misconduct+to+ASIC?openDocument

Don’t know what your broker’s regulator?

Check in broker info at http://fxbuild.com/best-forex-broker/ (click broker name or type the name on search box on the right side)

See regulator’s website list on http://fxbuild.com/forex-regulatory-bodies/

Final WordsThere are no fool-proof method to avoid being scammed/cheated and there are no sure-method to get your money back once you got cheated either, but the more knowledge you have about this, the less likely you’ll suffer great loss from unethical brokerages.