Brexit Election Variable Leverage Scam - FPMarkets

CliveAldred

Recruit
Messages
5
In the last three days leading up to the UK General Election I was trading Oil and Eur/USD with your highly recommended broker FPMarkets. I managed to build up my account mainly through trading Brent Oil to around £25,000 see attachment below. Simultaneously I also trade with several other brokers: CitiIndex, ForexTime,Pepperstone. I noticed that in both Pepperstone and FPMarkets that the Margin and Leverage were suddenly fluctuating very high, (very odd as I was hedging), much higher than that of the other two brokers. After selling a lot of potentially good oil trades, GBP/USD and EUR/USD trades to stay within the Leverage limits - suddenly I was hit with a massive leverage surge in regards to FPMarkets and my account was frozen and completely emptied and all that remains is £222.90p. I also hear that this company is planning to avoid regulation by moving its headquarters offshore - is forexpeacearmy aware of this rumour and is it true. Normally when trades are stopped out the client retains 50% of their initial funds -- but not with FP Markets! I am concerned you are recommending this broker given my personal experience. See attachment of trades and chart taken from MT4.
In regards to Pepperstone, I have two observations, firstly that this brokers price quotes go rampant at certain times of the day, whereas those of other brokers do not follow this pattern and are steady. This appears to be a ruse to take out traders stop/losses etc. In my case I was using a trading robot which was also simultaneously being used and actively trading on CitiIndex and ForexTime. At precisely 23:00Hrs on the 11/12/2019 all my trades were closed on GBP/USD pair. I asked Pepperstone to investigate and they told me that this was caused by my robot automatically closing all my trades. The only problem with this explanation is that if it were true, why didnt that identical robot also close my trades on CitiIndex, FPMarkets and ForexTime on the same day and time? And as that same robot had been trading in Pepperstone for several days why didnt it close on previous days at the exact same time? Examination of the robot shows that there is no properties in it that allow anyone to set a sell off or close all open trades at any set time. So Pepperstone appear to be strangers to the truth and scamming people out of their deposits. However, Pepperstone at least left some money back in my account my £10K deposit was eventually reduced down to £7,289.04p! At least they didnt wipe out my entire account unlike your recommended broker FPMarkets. What I would advise traders is this... when opening a brokerage account, the broker demands all your identity documents as well as your money. However scam brokers usually hide their company accounts and names and addresses of their owners and/or directors. Given that it is the Trader that is risking everything we should pressure Govts to ensure that Broker operators identities and personal home addresses are also shared with traders.. this will remove a lot of the scammers from the market! I would appreciate other traders sharing any similar experiences over the BREXIT Election Period with these two brokers or any other Australian based Brokers (as it may be a liquidity provider scam). I will also ask forexpeacearmy to investigate both matters especially the FPMarkets scam as currently you are highly recommending them as a trusted broker and I only joined them as a result of reading your reviews!
 

Attachments

AsstModerator

FPA Forums and Reviews Admin
Messages
5,591
The FPA doesn't recommend brokers. The FPA does show banners from some companies in order to pay the bills. I'm not even sure if FPMarkets has any banner campaigns running or not. I'd have to ask the Advertising Department.

The ratings at the FPA are not recommendations by the FPA. The ratings are given by reviewers. You can submit a review yourself. Please make sure to select the country you are currently in from the dropdown box.

A number of Australian brokers have been setting up offshore corporations. I'm told one of the reasons is because ASIC is restricting where licensed brokers can offer services. I've just checked the FPMarkets website and added information about their St Vincent and Grenadines office to the review page. If you become aware of any other regulatory changes for any broker, please PM me.
 

FxMaster

Lt. Colonel
Messages
9,337
In the last three days leading up to the UK General Election I was trading Oil and Eur/USD with your highly recommended broker FPMarkets. I managed to build up my account mainly through trading Brent Oil to around £25,000 see attachment below. Simultaneously I also trade with several other brokers: CitiIndex, ForexTime,Pepperstone. I noticed that in both Pepperstone and FPMarkets that the Margin and Leverage were suddenly fluctuating very high, (very odd as I was hedging), much higher than that of the other two brokers. After selling a lot of potentially good oil trades, GBP/USD and EUR/USD trades to stay within the Leverage limits - suddenly I was hit with a massive leverage surge in regards to FPMarkets and my account was frozen and completely emptied and all that remains is £222.90p. I also hear that this company is planning to avoid regulation by moving its headquarters offshore - is forexpeacearmy aware of this rumour and is it true. Normally when trades are stopped out the client retains 50% of their initial funds -- but not with FP Markets! I am concerned you are recommending this broker given my personal experience. See attachment of trades and chart taken from MT4.
In regards to Pepperstone, I have two observations, firstly that this brokers price quotes go rampant at certain times of the day, whereas those of other brokers do not follow this pattern and are steady. This appears to be a ruse to take out traders stop/losses etc. In my case I was using a trading robot which was also simultaneously being used and actively trading on CitiIndex and ForexTime. At precisely 23:00Hrs on the 11/12/2019 all my trades were closed on GBP/USD pair. I asked Pepperstone to investigate and they told me that this was caused by my robot automatically closing all my trades. The only problem with this explanation is that if it were true, why didnt that identical robot also close my trades on CitiIndex, FPMarkets and ForexTime on the same day and time? And as that same robot had been trading in Pepperstone for several days why didnt it close on previous days at the exact same time? Examination of the robot shows that there is no properties in it that allow anyone to set a sell off or close all open trades at any set time. So Pepperstone appear to be strangers to the truth and scamming people out of their deposits. However, Pepperstone at least left some money back in my account my £10K deposit was eventually reduced down to £7,289.04p! At least they didnt wipe out my entire account unlike your recommended broker FPMarkets. What I would advise traders is this... when opening a brokerage account, the broker demands all your identity documents as well as your money. However scam brokers usually hide their company accounts and names and addresses of their owners and/or directors. Given that it is the Trader that is risking everything we should pressure Govts to ensure that Broker operators identities and personal home addresses are also shared with traders.. this will remove a lot of the scammers from the market! I would appreciate other traders sharing any similar experiences over the BREXIT Election Period with these two brokers or any other Australian based Brokers (as it may be a liquidity provider scam). I will also ask forexpeacearmy to investigate both matters especially the FPMarkets scam as currently you are highly recommending them as a trusted broker and I only joined them as a result of reading your reviews!
Make sure to fill company invite form and invite them to this thread and also let us know the status from AFCA.
 

AMust123

Recruit
Messages
7
What I can say in regards to your situation with FP Markets is that they by their own T&Cs will inform you when their leverage changes will be implemented. This therefore would increase the required margin for your positions, increasing the required equity level. Your margin level would also proportionally become lower due to these circumstances. What complicates this is the fact that you are running multiple hedges during a roll over period. The spread widening would increase the divergence between the P/L of your hedges and if the total value of the P/L of the hedges specifically is insufficient with the amended margin requirement, can cause the margin level to become negative, effectively wiping your account and in most cases with overleveraged hedging, cause a negative balance. This is more a case of misfortune and the dangers of over-leveraged hedge positions than any scam operation. FP and IC are notorious for reducing leverage around news events but its the price you pay for liberal leverage conditions. FP even cap your leverage; we are in a risk averse environment with brokers, with homage to our dear policy makers over at the SNB, to thank for that.
 

FxMaster

Lt. Colonel
Messages
9,337
What I can say in regards to your situation with FP Markets is that they by their own T&Cs will inform you when their leverage changes will be implemented. This therefore would increase the required margin for your positions, increasing the required equity level. Your margin level would also proportionally become lower due to these circumstances. What complicates this is the fact that you are running multiple hedges during a roll over period. The spread widening would increase the divergence between the P/L of your hedges and if the total value of the P/L of the hedges specifically is insufficient with the amended margin requirement, can cause the margin level to become negative, effectively wiping your account and in most cases with overleveraged hedging, cause a negative balance. This is more a case of misfortune and the dangers of over-leveraged hedge positions than any scam operation. FP and IC are notorious for reducing leverage around news events but its the price you pay for liberal leverage conditions. FP even cap your leverage; we are in a risk averse environment with brokers, with homage to our dear policy makers over at the SNB, to thank for that.
You got the issue as well or its just your views?
 

compu-forex

Sergeant
Messages
149
FXMaster,

I have to agree with AMust123. It does not look like he has a problem, he was just commenting on what the OP posted.

This account appears to be heavily overleveraged, and the problems caused here were not caused by massive leverage increase. Any leverage increase would have had negligible effect, as 99% of the trades were hedged. What happened, is that with the heavy over-exposure, the spread widened and the account reached the point of stop-out. By the OP's own admission, he was closing trades to avoid a stop-out. The spread on XBR widened from 4 points to 7 points, I estimate this would have removed close to $1000 from the available equity. This widening of spreads at rollover is not a rampant ruse to take out traders. This indicates a fundamental lack of understanding of how the markets work.

When an account is stopped out, the broker generally closes the biggest losing trade.Now this would not have affected the equity in the account, as the "loss" is already accounted for in the available equity. What would have been an issue, is that the trade that was closed, was for 1 lot and that means that there would have been 1 lot of unhedged trade, which would require a substantial margin, probably around $600 depending on the leverage condition, account leverage, etc. Obviously this new margin requirement would have had the effect of causing another stopout, closing the next biggest losing trade. That trade was an unhedged trade, so the margin requirement would go back to zero but, presumably, the original spread that started the stop out would still persist.

The process above will cascade through the entire structure until the free margin is sufficient to stop the stop-out.

Presumably the OP is looking at the $4.80 margin before the stop-out and is suddenly wondering why he requires $108. The leverage has not changed, the trades that remain are not hedged and therefore full margin is required.

There is not enough info on Pepperstone to see what happened but presumably something similar.

The OP suggests that his account was frozen and emptied. I should point out that based on the screenshots, there was no money in the account. The balance is absolutely meaningless......all that matters is the equity which is below zero.

This looks to be a case of burnt fingers rather than scam by the brokers.
 

FxMaster

Lt. Colonel
Messages
9,337
FXMaster,

I have to agree with AMust123. It does not look like he has a problem, he was just commenting on what the OP posted.

This account appears to be heavily overleveraged, and the problems caused here were not caused by massive leverage increase. Any leverage increase would have had negligible effect, as 99% of the trades were hedged. What happened, is that with the heavy over-exposure, the spread widened and the account reached the point of stop-out. By the OP's own admission, he was closing trades to avoid a stop-out. The spread on XBR widened from 4 points to 7 points, I estimate this would have removed close to $1000 from the available equity. This widening of spreads at rollover is not a rampant ruse to take out traders. This indicates a fundamental lack of understanding of how the markets work.

When an account is stopped out, the broker generally closes the biggest losing trade.Now this would not have affected the equity in the account, as the "loss" is already accounted for in the available equity. What would have been an issue, is that the trade that was closed, was for 1 lot and that means that there would have been 1 lot of unhedged trade, which would require a substantial margin, probably around $600 depending on the leverage condition, account leverage, etc. Obviously this new margin requirement would have had the effect of causing another stopout, closing the next biggest losing trade. That trade was an unhedged trade, so the margin requirement would go back to zero but, presumably, the original spread that started the stop out would still persist.

The process above will cascade through the entire structure until the free margin is sufficient to stop the stop-out.

Presumably the OP is looking at the $4.80 margin before the stop-out and is suddenly wondering why he requires $108. The leverage has not changed, the trades that remain are not hedged and therefore full margin is required.

There is not enough info on Pepperstone to see what happened but presumably something similar.

The OP suggests that his account was frozen and emptied. I should point out that based on the screenshots, there was no money in the account. The balance is absolutely meaningless......all that matters is the equity which is below zero.

This looks to be a case of burnt fingers rather than scam by the brokers.
I agreed, let me ask mods to invite OP. I hope to hear more about that guy because one and only post lead to suspicious
 

compu-forex

Sergeant
Messages
149
I agreed, let me ask mods to invite OP. I hope to hear more about that guy because one and only post lead to suspicious
Ah ok, understood.

I should also point out, as an aside, one of the unseen risks of this grid type strategy is that with the current trade structure he would be paying an estimated 800 GBP per day in swaps. :oops::oops:. In fact, this may have been a contributing factor.

This was never going to end well........
 
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