Comment on STP/ECN Claim by Broker: I agree with the broker’s web site paras 3 to 5 regarding its role as STP/ECN broker:
“--- no manipulation, --- no dealing-desk broker, --- orders are executed anonymously, automatically, and with 100% transparency to the interbank forex markets –“ ”----who are responsible for the settling of all winning trades.”
Query on STP/ECN Performance as Representative of the Type:
At 11:18:24 the Support said: “---we as STP broker we work with Liquidity, they take the risk against clients.” At 11:20:47 AM Support said: “----its not about the past, its about the fact that your orders need to be checked and verify with the LP”.
So there is another party who provides the liquidity, with whom the STP/ECN broker has a “due care” relationship regarding wins and losses? Is this a STP/ECN broker and “no dealing desk” as claimed above? Aikôna! (“I don’t believe it!”) So, does this “LP-relationship” apply to all (or other) licensed STP/ECN brokers under formal national regulation?
All successful retail FX-traders wish to win all their trades and beat all comers and remove wins from their trading accounts regularly – they are entitled to this aim and endeavour. To minimize their broker-risks, they use STP/ECN brokers for anonymous and automatic transactions directly to the forex market and are entitled to expect support by true STP/ECN brokers as defined in paras. 3 to 5 above. This applies to all STP-ECN FX-brokers, not only this test-case.
In this case the broker and his LP conferred, the broker then withdrew a significant amount of money from the trader’s account and terminated the contract with the trader, claiming “Our compliance team have discovered (my comment: after the broker’s compliance team conferred with the Liquidity Provider who “take the risk against clients”) predatory trading practices on your account that takes advantages of technical flaws----“. These technical flaws (I presume they were in the broker’s trading system) were not indicated nor how the trader manipulated the broker’s faulty system to his advantage. Prior to this one-sided drastic action by the broker (after the conference with his LP, who stood now to gain rather than lose money) the Support representative said: (11:28:37 AM): “--- as long as trades were executed with no manipulation, and it can be proof, no issue” to which the trader responded (11:55:23 AM) “I have video recorded each and every one of my trades as well, so I have proof that everything was done legally”. But, the broker did not ask for the proof from the trader, not in private nor in public. However, from the proof provided publicly by the trader, the broker appeared to have manipulated the trading times, justifying losses rather than wins to the trader. If this mirrors the action of all STP/ECN brokers, no fairly consistently successful retail FX-trader has any chance to draw winnings from his trading account.
Comment on Arbitration/Regulation.
In a letter from the broker to the trader, the following appears: “Should you wish to dispute our decision to terminate our relationship, you are entitled to exercise your right to arbitration at the International Centre for Dispute Resolution pursuant to Section 5 of the Customer Agreement.”
In the last letter the broker stated: “We have discussed the case with our attorney and according to the terms of the client agreement, you have agreed to rectify matters of dispute through the arbitration process. Therefore we will not submit to an online forum when a real solution has been made available to you”.
• Note that the client has not been given an opportunity to dispute the loss of his money (the main issue) by providing his proof. The main issue will not be subjected to arbitration and any possible fraudulent manipulation by the broker and pressure by the LP on the broker will not be discussed or be made “100% transparent” to the public or, I suspect, to the national Regulating Authority.
• How does the fact that FX-traders accept arbitration “at the International Centre for Dispute Resolution” in their contracts with their brokers, reduce their access to the national Regulating Authority for reasonable speedy redress?