RESOLVED - AvaFX/AvaTrade cancelled profits of $9188.54

[PaulWilliams]

Official response from AvaTrade to customer

The issue of trading outside the market/on off market rates is very clearly covered in our Terms and Conditions (Found Here).

As a news trader I often get emails by forex brokers that some of my trades were off market, but these come within 24 hours, and reputable brokers actually adjust price’s
One example I have is HotForex, it has happened to me on two occasions that I have received an email of my trades being adjusted, but not cancelled.

The Trading Practices department at AvaTrade takes arbitrage activity of this nature extremely seriously.

In this instance the client is openly acknowledging participation in trading at off market prices on other brokers (HotForex). The complaint here from the client is that AvaTrade did not adjust the price of the trades and instead cancelled the trades and the profit.

AvaTrade is aware of many EA systems that are specifically designed to detect arbitrage opportunities by targeting rates outside the market at times of high volatility – in essence the trader is exploiting short delays in price updates to obtain illicit/illegal profits, clearly forbidden by our Terms & Conditions’

AvaTrade reserves the right to cancel or adjust to market rates - all illicit trades of any client found to be opening/closing trades at off market prices.

Hence, all trades that were opened outside of the market rates by this client were cancelled by the Trading Practices department and all profits and/or losses on these trades are deducted.

Firstly the trades were not cancelled right away rather about 1 month after the trades were executed, most were opened and closed on July 4th, and the cancellations came on July 31st.

AvaTrade’s Trading practices department allows a grace period for clients using an EA (Electronic Algorithm) that have participated in opening trades at off market prices. If the Trading Practices department deems the client was not intentionally doing this, as the client is using an EA, they will continue to monitor the accounts trading to indicate if this activity is prevalent in the clients trading/EA. This was the case with this particular client.

What the client fails to mention in her post is that AvaTrade also detected off market trading on the clients account on the 29th July.
So the combination of arbitrage on the 4th July + 29th July led the Trading Practices department at AvaTrade to deduct profit and/or losses on all illicit trades opened at off market prices on the 30th July.

The other issue I have is with account #2, you can't see it on the statement, but I actually submitted a withdrawal request for the whole account balance before the trades were cancelled. Which makes me believe that they received the withdrawal request looked at the profit I've made and decided to take some of the profit off.

In order to protect client privacy we cannot go into specifics of client withdrawals.

However - The account was being monitored by the Trading Practices department continually from the first instance of arbitrage trading on the 4th July. There is no correlation between the time ANY client makes a withdrawal request and the deduction of funds from illicit trades.

As stated above, the Trading Practices department continued to monitor the clients account for future off market trading as there was a suspicion the client was using an EA that targets rates outside the market at times of high volatility which gave the trader the ability to obtain illegal profits, which are clearly forbidden in AvaTrade’s Terms & Conditions.

The reason that this client received all the deductions on the 30th July is because the Trading Practices department found illegal trading on the 29th July as mentioned above. Based on the fact the client arbitraged on the 4th July, and was monitored by the Trading Practices department for future illegal trading, which was committed on the 29th July, the decision was made to cancel the trades and deduct this illicit profit from the client on the 30th July.

If the trades were off market, why did it take almost a month to catch that?

As stated above, it did not take one month to ‘catch’ the trades that were opened at prices out of the market. The client was being monitored from 4th July after the first cases of off market trading and after a second case presented itself on the 29th July, all trades that were opened at rates outside the market were cancelled and the illegal profits were deducted on the client’s account on 30th July.
It should be noted that the client was able to make legitimate profits on legitimate trades with illicit profits made from these arbitraged trades.

Why were the trades cancelled rather than adjusted to market prices within 24 hours of the trades?

AvaTrade does not manipulate/change/correct prices on clients open or close trades.

Why does AVA see it as totally normal to cancel trades beyond a reasonable time after the trade was closed.

Every client of AvaTrade must agree to the company’s Terms and Conditions.
Within these T&C’s are specific details about prohibition of arbitrage and manipulation.
This particular client agreed to the terms and conditions when they opened two accounts with AvaTrade.

‘AvaTrade reserves the right to investigate and review any account AvaTrade suspects of manipulation and withhold funds suspected of being derived from such activity. AvaTrade reserves the right to void any transaction which it has determined to be a result of any of these practices and will have no liability to the customer whatsoever for any losses incurred’

 

[Tradetowin]

The issue of trading outside the market/on off market rates is very clearly covered in our Terms and Conditions (Found Here).

As a news trader I often get emails by forex brokers that some of my trades were off market, but these come within 24 hours, and reputable brokers actually adjust price’s
One example I have is HotForex, it has happened to me on two occasions that I have received an email of my trades being adjusted, but not cancelled.

The Trading Practices department at AvaTrade takes arbitrage activity of this nature extremely seriously.

In this instance the client is openly acknowledging participation in trading at off market prices on other brokers (HotForex). The complaint here from the client is that AvaTrade did not adjust the price of the trades and instead cancelled the trades and the profit.

AvaTrade is aware of many EA systems that are specifically designed to detect arbitrage opportunities by targeting rates outside the market at times of high volatility – in essence the trader is exploiting short delays in price updates to obtain illicit/illegal profits, clearly forbidden by our Terms & Conditions’

AvaTrade reserves the right to cancel or adjust to market rates - all illicit trades of any client found to be opening/closing trades at off market prices.

Hence, all trades that were opened outside of the market rates by this client were cancelled by the Trading Practices department and all profits and/or losses on these trades are deducted.

Firstly the trades were not cancelled right away rather about 1 month after the trades were executed, most were opened and closed on July 4th, and the cancellations came on July 31st.

AvaTrade’s Trading practices department allows a grace period for clients using an EA (Electronic Algorithm) that have participated in opening trades at off market prices. If the Trading Practices department deems the client was not intentionally doing this, as the client is using an EA, they will continue to monitor the accounts trading to indicate if this activity is prevalent in the clients trading/EA. This was the case with this particular client.

What the client fails to mention in her post is that AvaTrade also detected off market trading on the clients account on the 29th July.
So the combination of arbitrage on the 4th July + 29th July led the Trading Practices department at AvaTrade to deduct profit and/or losses on all illicit trades opened at off market prices on the 30th July.

The other issue I have is with account #2, you can't see it on the statement, but I actually submitted a withdrawal request for the whole account balance before the trades were cancelled. Which makes me believe that they received the withdrawal request looked at the profit I've made and decided to take some of the profit off.

In order to protect client privacy we cannot go into specifics of client withdrawals.

However - The account was being monitored by the Trading Practices department continually from the first instance of arbitrage trading on the 4th July. There is no correlation between the time ANY client makes a withdrawal request and the deduction of funds from illicit trades.

As stated above, the Trading Practices department continued to monitor the clients account for future off market trading as there was a suspicion the client was using an EA that targets rates outside the market at times of high volatility which gave the trader the ability to obtain illegal profits, which are clearly forbidden in AvaTrade’s Terms & Conditions.

The reason that this client received all the deductions on the 30th July is because the Trading Practices department found illegal trading on the 29th July as mentioned above. Based on the fact the client arbitraged on the 4th July, and was monitored by the Trading Practices department for future illegal trading, which was committed on the 29th July, the decision was made to cancel the trades and deduct this illicit profit from the client on the 30th July.

If the trades were off market, why did it take almost a month to catch that?

As stated above, it did not take one month to ‘catch’ the trades that were opened at prices out of the market. The client was being monitored from 4th July after the first cases of off market trading and after a second case presented itself on the 29th July, all trades that were opened at rates outside the market were cancelled and the illegal profits were deducted on the client’s account on 30th July.
It should be noted that the client was able to make legitimate profits on legitimate trades with illicit profits made from these arbitraged trades.

Why were the trades cancelled rather than adjusted to market prices within 24 hours of the trades?

AvaTrade does not manipulate/change/correct prices on clients open or close trades.

Why does AVA see it as totally normal to cancel trades beyond a reasonable time after the trade was closed.

Every client of AvaTrade must agree to the company’s Terms and Conditions.
Within these T&C’s are specific details about prohibition of arbitrage and manipulation.
This particular client agreed to the terms and conditions when they opened two accounts with AvaTrade.

‘AvaTrade reserves the right to investigate and review any account AvaTrade suspects of manipulation and withhold funds suspected of being derived from such activity. AvaTrade reserves the right to void any transaction which it has determined to be a result of any of these practices and will have no liability to the customer whatsoever for any losses incurred’

Thank you for the response. May we see proof that the prices were off market? I mean doesn't that make sense, to ask for some sort of proof when something like this happens?

I am not satisfied with the explanation and reasoning behind any of the points made here. Most importantly I don't participate in arbitrage trading the way you are saying I do. I am a news trader and I am not hiding this, if you interpret my news trading as arbitrage then that's wrong. I even explained how my strategy works, I place the trades on multiple brokers with the help of an EA, the EAs job is to simply copy the trades that I manually send. As for the example I gave with HotForex that was just an example of what a good forex broker should do, when a mistake in the feed is caught it is fixed right away. News trading is a viable strategy in many financial markets, so just because I trade the news that doesn't allow Ava to simply decide to cancel trades. "AvaTrade reserves the right to cancel or adjust to market rates" well why doesn't AVA adjust the prices, it appears that this is in the T&C as it is quoted here by Paul, I bet if the prices are adjusted AVA will come up with ficticious prices that will make turn from a profit of nearly $10k into a loss.

This BS about the grace period etc. is foolish, nobody will believe that, and if in fact it is true then AVA is a total scam operation.


The facts here are very clear I had trades I placed myself, many of which were open for over 40 min. You can't call a trade open for 40 mins arbitrage. Now I have a hard time believing that this trade was outside of the market for 40 mins.

Does anyone find the explanation of not adjusting trades and just cancelling them if supposedly the price if off market very very "scammy" practice. Adjustment to prices is the norm in forex and all forex brokers are doing this, Ava is openly saying that they don't adjust prices, just based on this we need to label AVA a SCAM.

Quoting a policy that I supposedly agreed to when I opened my account is nonsense. The policy in itself is a scam, you can't just arbitrarily cancel profits like that, see the problem is that Ava makes the rule then decides when to apply it and how to apply, which trades should be called as "arbitrage" totally unilateral. Ava is a market maker, a market maker can't say that the price was off-market, this price was available on the feed, and on more than one feed as I provided another broker's feed. This claim that the other broker didn't catch that is also total speculation, in a decentralized market that Forex is these prices existed on many platforms, the truth is that it would cost Ava $9188.54 if the admit that.


And one more thing. Generally when providing Terms and Conditions in any sort of business does not make them enforceable. The Terms and Conditions could be totally illegal on many levels, which here is also the case. One huge example is that AVA according to the T&C is solely able to decide to cancel profits if they "decide" that arbitrage took place(this whole excerpt that was provided here), they are the mediator and of course what do you think they will always side with themselves. I think the FOS Australia will side with me here based on the evidence Ava and I have presented so far, for two big reasons:
1. The price adjustments did not occur within a reasonable period of time.
2. Inability to prove that prices were off market.

‘AvaTrade reserves the right to investigate and review any account AvaTrade suspects of manipulation and withhold funds suspected of being derived from such activity. AvaTrade reserves the right to void any transaction which it has determined to be a result of any of these practices and will have no liability to the customer whatsoever for any losses incurred’
This whole line in the T&C will most likely be deemed unenforceable by any legitimate financial regulator, for the simple reason of conflict of interest. As a market maker using this clause will always allow AVA to decide in its own favour should anyone make a profit and AVA decides to "investigate". "Will have no liability to the customer whatsoever for any losses incurred", Why shouldn't Ava have a liability to the trader, they are the ones providing the technology to allow a trader to place transactions, if anyone should be liable it should be AVA.

Does anyone see that what Ava is doing is not right or is it just me? Is Ava the victim here?
I think the traders here at the FPA will see how Ava's T&C are meant to greatly skew the odds in Ava's favour and allow them to cancel profits whenever the see fit. I see a lot of similarities between Ava and InstaForex. From what I've read here in the forums about Insta, Ava is totally copying their behavior.

I am now placing this in the open cases folder.

 

[Pharaoh]

I think it appears that two terms are being used interchangeably, when these terms are not 100% synonymous.

Off market means that the prices are incorrect. If there is a real price feed error, a broker should have the right to make adjustments or cancellations. This should be rare, but can happen. The client "admitted" to having 2 trades adjusted by HotForex because of a pricing error, NOT cancelled because of the second term, arbitrage.

Arbitrage would generally be making use of an alternate price datafeed to ensure a profit. Attempting to spike trade the news is NOT the same as arbitrage. Arbitrage is only if an entry or exit is deliberately designed to be executed at a price when the trader has outside assurances that price is about to change, thus ensuring profits.

Yes, a trader could do an arbitrage entry on a news spike and hold the trade for 40 minutes. Yes, a trader could get an off-market fill during a news spike and hold the trade for 40 minutes. What I do not see in Ava's statement is how they differentiate a perfectly legitimate entry before/during a news spike from one that Ava does not consider to be legitimate. Without some additional evidence, Ava could use "off market" or "arbitrage" to adjust or cancel any trade at any time and tell the client to read the TOS if the client complains.

So, will Ava's rep step up and support this contention, or does everyone get to be left wondering if any trade that scores a big gain could be wiped clean later.

BTW - That grace period excuse would carry a LOT more weight if the client was issued a warning. Did this happen?

 

[Tradetowin]

BTW - That grace period excuse would carry a LOT more weight if the client was issued a warning. Did this happen?

No.

Nobody's buying this grace period BS. A good broker should be transparent and honest, both of these qualities are absent in Ava's behaviour in my situation. The reason I mentioned HotForex is because I have been with them for a very long time, and actually they are honest and transparent in every way, that's how a good business should be run. I bet one of the reasons HotForex is doing so much better than Ava in terms of popularity comes down to simply honesty above all.

Ava, clean up your act, look up to the leaders in the industry and business will be booming, you won't need to "steal" traders profits to make money.

 

[Tradetowin]

Pharaoh I started a case yesterday, I still don't see it in the open cases folder, do you see it from your end?

Thanks

 

[Pharaoh]

Try the Case Preparation folder. All new cases filed start out there.

Court Case Preparation Folder


Hello PaulWilliams!

Will you be dropping back into the thread to answer any of the questions that your post generated?

 

[Thug Willy]

So with AVA if you place a sell limit at the high of a resistance area before the news and it is hit THAT is an "off market" trade?

I don't get it, if it is your platform how could tradetowin get an order filled outside of the market?
Unless you can send proof where during a news spike in which the price went say 1.30 to 1.32 and tradetowin got a price of 1.29...(but how is that possible?)
it sounds like Paul is defending the theft of tradetowin's profit.

My 2 cents is maybe AVA should offer tradetowin a job so they can make profit instead of stealing from a superior trader...

 

[Master Yoda]

Why ava are not answering?.... I dont like it

 

[Tradetowin]

Look guys, the reality is that Ava is a market maker. By definition they are always the counter-party on every trade, whether they choose to offset the trades with a liquidity provider is up to them. So my gain is their loss, ofcourse they won't be happy I made 10k, they are now trying to come up with all kinds of "excuses" to take my money.

So with forex traders mostly losing a market maker is generally guaranteed a hefty profit by simply not doing anything and letting the traders gamble their money away, however when a disciplined trader comes along and makes money the Market Maker sees the loss and greed sets in. Immediately upon the discovery of a trader making money, the MM gets busy trying to come up with excuses to confiscate profits, and that's when they start looking through their T&C and deciding which clause to apply to get the trader to shut up.

Whether I made 10k trading the news or trend following it is always their loss, as they probably don't offset trades. It's like a casino, the casino doesn't like winners or card counters, they screw up their business model. News trading is the only edge that I have when trading the market and it is natural that a broker will not like it, news trading is sort of like card counting, not illegal however no broker likes it.

 

[Tradetowin]

It's funny if you read the definition of market maker(here on FPA), there you are pointed to the definition of bucket shop. Interesting reads!