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I ENVY YOU - about safety of deposit

fxcommentary

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I ENVY every fx trader who pick a broker without first checking the safety of deposit. I waste a lot of time checking, i wish i had more trust.

The safety of deposit is - my ultimate definition - a compensation scheme in case of broker (or deposit-taker) inslovency, provided by laws in the jurisdiction of the broker (or deposit-taker).

Pls do not regard this as any kind of legal advice or marketing material. Simply take care of yourself.

The procedure I use:

1. Checking what kind of compensation scheme exist in jurisdiction (eg. EdB Germany, FSCS UK) - i will not use USA broker as i do not find one with compensation scheme.

- Pls here if you know any USA broker with such defined safety deposit rules. This do not have to be a compensation scheme in european meaning but any kind of additional safety legal instrument

2. Checking exclusion from the rules of compensation scheme (e.g. am i eligible according o these rules as a citizen of a different country)

3. Checking where is my money deposited, in what bank (i mean: legal obligation of broker and not: a marketing information) - broker may transfer money to deposit-taker which may lead (and probably will) to exclusion of national compensation scheme.

- I will post my communication just started with FCA in UK, and will update here if my concerns as to UK brokers are true

4. Checking if my money is still my money - there is a broker (legally: it is not a broker but everybody recognize his services as a FX brokerage) who takes ownership of clients money. Yes - ownership is transffered.

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Now pls do not comment that:
- this is a boring subject
- that i am marketing representative of a broker
- that i am dramatic
- that fx strategy is more important that safety of deposit

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Pls comment - where can you a reliable jurisdiction, which uses clear / fair rules for safety and deposit + the brokerage name based in that jurisdiction who does not overide these rules in customer agreement.

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In any case - if anybody suggest broker her. PLEASE DO NOT TRUST IT. All you can do is check it yourself.
 
Since this thread will trigger debate on the pros and cons of different brokers, I have moved it from Scam Alerts to Company Comparisons and Competitions.
 
Since this thread will trigger debate on the pros and cons of different brokers, I have moved it from Scam Alerts to Company Comparisons and Competitions.

All I can do (if I have a spare time and sb asks) is to point out to some safety deposit rules (as defined in post 1) which arise in the jurisdiction of a given broker. Rules are simple, really.

If we want to earn we have to protect our capital. The first step is keep money in a safe deposit. Is not it ?

E.g. if you retire and want to invest in FX some savings - PLEASE do not hurry in choosing your broker. Wait, think, read agreements. Investigate before you invest.
 
I'll throw my 100% support behind not hurrying to chose a broker. There's a reason why so many unregulated or under-regulated brokers want you to be able to deposit and start trading in 5 minutes - they know that impulsive people are more likely to lose and less likely to take a moment to read their unfair terms of service, reviews left by clients, etc.

Most people spend more time comparing refrigerators before purchase than they do checking out a forex broker or forex account manager.
 
I understand your concerns, fxcommentary. I think you're referring to rules like what applies to normal bank accounts in germany, for example, that if the bank declares insolvence, the deposits are guaranteed up to a certain amount of money. I think it's a good idea to prefer brokers where you can be sure that money is deposited in a country with these rules (I think some general rule now applies to all countries in European Union, or did I get that wrong?). But then again, you can't get a guarantee on everything. Also, what good is it if you have all possible guarantees and take a lot of time to assure them, but then don't have enought time to really check on your trading strategies and end up loosing money?
 
I understand your concerns, fxcommentary. I think you're referring to rules like what applies to normal bank accounts in germany, for example, that if the bank declares insolvence, the deposits are guaranteed up to a certain amount of money. I think it's a good idea to prefer brokers where you can be sure that money is deposited in a country with these rules (I think some general rule now applies to all countries in European Union, or did I get that wrong?). But then again, you can't get a guarantee on everything. Also, what good is it if you have all possible guarantees and take a lot of time to assure them, but then don't have enought time to really check on your trading strategies and end up loosing money?

You’ve got a good point, Joaoguitar. It is virtually impossible to get the best of both worlds. But a really cautious broker who is dead-serious about the security of his or her investment doesn’t act in careless haste. He/She always takes time to check and evaluate the integrity of his/her prospect trading platforms. Once he/she gets the guarantee he/she wants, he/she can always dedicate enough time to master a trading strategy. The rest will be up to him after this. As far as I’m concerned, the key here is patience and timing.
 
I'll throw my 100% support behind not hurrying to chose a broker. There's a reason why so many unregulated or under-regulated brokers want you to be able to deposit and start trading in 5 minutes - they know that impulsive people are more likely to lose and less likely to take a moment to read their unfair terms of service, reviews left by clients, etc.

Most people spend more time comparing refrigerators before purchase than they do checking out a forex broker or forex account manager.

This is the best and most practical approach any broker should do. Thanks for this nice piece of advice.
 
I ENVY every fx trader who pick a broker without first checking the safety of deposit. I waste a lot of time checking, i wish i had more trust.

Found someone more doubting brokers than Pharaoh:p

Very good subject, totally agree:cool:
 
If we are serious about trading, the security of our deposit should be our top concern. How can we ever be assured of ROI when our investment is gone in the first place?
 
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