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Ask These Questions of Your Broker - Post the reply here

Discussion in 'Beginners Bootcamp' started by Josh, Feb 18, 2009.

  1. Josh

    Josh Recruit

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    Hi everyone,

    Broker tricks can be tough to get around. And we know that many but not all brokers can use tricks to give a false impression to new or existing customers. Below I have given a proforma that I use for questions and insist that the responses are done by email. Why? Brokers can change their website without a trace, but once the answers are in writing and in your email inbox, it is very hard from a legal view point to take a different stand. If a broker refuses to give written answers, then stay well away because they are trying to not be accountable. Because brokers know, that if their answers are in writing they are accountable, they are not accountable for their words unless it can be shown in writing.

    Obviously some questions need to be orientated towards that specific broker. Like forex.com have 3 different styled trading accounts and obviously the questions below would not determine the answers unless an account type was specified.

    Hopefully these help newbies not scammed as easily...

    Also in writing you can then cut and copy to this post for everyone to view.

    Read the questions and edit as necessary but for most questions, just replace _-_-_-_-_-_-with a name like IBFX or IBFX's and hopefully you are ok to go.


    PROFORMA

    Hi _-_-_-_-_-_-,

    Interested in opening a small live account, but I need to know the answer to a number of questions first.

    1) What is _-_-_-_-_-_-'s minimum account size?

    2) Besides spreads what other commissions or fees does _-_-_-_-_-_- charge (sometimes the broker may have a range of account types make sure you specify what account type you are looking at)?
    2a) If so, how much per 1 lot traded? Or how much per trade?
    2b) Are there any other commissions or fees?

    3) Does _-_-_-_-_-_- allow all trades to be hedged?

    4) Does _-_-_-_-_-_- allow all trades to have trailing stops?

    5) With _-_-_-_-_-_- demo prices, are they identical to the live trading prices at all times?

    6)Do spreads at _-_-_-_-_-_- widen ever?
    6a i) If so, how do they differ? (a variable spread or a fixed wider spread)
    6a ii) If a fixed wider spread do you have a table of expected changes?
    6b) If so, when do they differ? What GMT time do they usually differ in? Or is it only during news?

    7) Does _-_-_-_-_-_- offer re-imbursements or spread reductions for high volume traders?
    7a i) If so, at how many lots traded per month, do spreads get reduced for traders? What size are the spreads?
    7a ii) If so, at how many lots traded per month, do re-imbursements start to occur? What size are the re-imbursements?

    8) The currency pairs that I can see on the demo account, are they the only pairs that _-_-_-_-_-_- make available when live trading?

    9) Does _-_-_-_-_-_- allow all indicators, EAs and scripts for MT4 to be used at all times?
    9a) If not, can you give me a list of indicators/scripts/EAs that you ban or control the use of?

    10) With deposit currencies, what deposit currencies does _-_-_-_-_-_- allow?
    10a) If different to minimum account size do you have a minimum deposit size, for each respective currency?

    11) How often and when are _-_-_-_-_-_- trading servers closed down?

    12) Does _-_-_-_-_-_- have an automated instantaneous execution of all trades, or is there a need to go through a trading desk / operator?

    13) What is the standard leverage for each of _-_-_-_-_-_- accounts?
    13a) OR Does the leverage change as trade account size increases / decreases?
    13b) OR Do you have different lot sizes for so called 'Standard' and 'Mini' accounts? Such as some brokers have 1 lot moves $10000 for accounts that they term as mini-accounts.

    14) In which countries are _-_-_-_-_-_- regulated? Which websites and authorities can I check this with?

    15) Which country are _-_-_-_-_-_- servers based in? Security of your info can depend on where the servers are based.

    16) What is _-_-_-_-_-_- policy on margin call?

    Happy trading.
     
  2. pinguino

    pinguino Recruit

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    Really nice advice

    According to your experience, witch are the brokers that better answer all your questions, any in Switzerland or Europe?

    Regards.
     
  3. coinage

    coinage Recruit

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    great questions

    Most likely any broker you are considering will hesitate or avoid answering one or more of these. Get the details before you commit.
     

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