Compliance – Insuring Integrity of Trades or Outright Theft?

[billye]

I did an interview with one of fpa ads sponsor

just on this topic, pls see their reply here...

confirmation of fxopen withdraw procedure - FXOpen forex forum - forex review - trading methods - education - analytics

 

[Russell Marsh]

I agree with most here. I was looking for a "no time zone" option.. They accept the trade then it's up to them to make sure their platform is efficient enough to tell you whether the trade has been filled properly or not. Also if they are going to nullify any trades then it stands to reason they should also be nullifying some trades that we the punter lost on.

As to the scalping issue.. It's worth checking with the broker BEFORE you put any money with them. It will be clear in their Terms or FAQs..

For example: Fxpro.com knowledgebase: "Yes “scalping” is allowed, unlike many brokers we do not discriminate against scalping by placing a minimum time that a trade must be open or minimum size that must be opened."

Alpari UK FAQs: "Do you have any restrictions on scalping?" - "No, we do not have any special policies or restrictions on scalping."

By doing this simple check you can avoid this problem. Another one (MIG) say in their FAQs that they don't accept scalping..

cheers
Russ

 

[Pharaoh]

I agree that in general, a trade is a trade and shouldn't be subject to auditing, but there are a few traders who misuse faster data feeds to try to rip off their own brokers. Giving the brokers a week or two to catch on seems reasonable.

Also, sometimes a bad close on a trade due to a data error (ever see those 200+ pip mystery spikes?) can cost money. If we say that a bad close than makes us money cannot be amended, then we'd also be saying a bad close which costs us money is also ok. Most sane brokers catch these things within a day or so and correct the trades (good and bad).

Of course, brokers that only nullify profitable trades and never bad ones should be taken out and burned at the stake.

BTW - I love Chris Eccles idea of questioning your broker about their auditing policies in advance. Also, Billye's idea in Fx Open's forums of withdrawing $1 per month to get any possible audits out of the way is a great idea (if you have a broker with little or no fee for withdrawals).

 

[crazzyotto]

audits

ANY shop which takes the oposite side of your trade is a potential THIEF! for MANY years i refused to trade Fx b/c i was BURNED [four zeros, but more than i am willing to admit] by one of those houses. recently, however, i found a brkr who states that their income is dependent upon SPREAD and only makes money when the trader does - and continues to trade. they provide a 'market feed' [their numbers are usu. w/in a pip of my tradestation feed]. only been w/ them for 2 weeks...... so, they may also fall on their face. BUT, so far, OANDA has been the best i have ever even heard of. and very tight [market- not fixed] spreads. if it hasnt been fixed in 24 hours, it should STAND ! trying to make 'adjustments' when u go to w/d your funds is BULLSH_T .
and, scalping is a decent way to make a living. any broker who doesnt 'allow' it is SUSPECT!
peace, crazzyotto

 

[john barker]

brokers

I find it unbelievable that a broker can choose to review and "cancel" winning trades, surely some sort of contract is in force when you commit to buy/sell and exit trades.
The only answer is a list of trustworthy brokers, then everyone will use them and let the scammers rot through lack of business. We, as traders, need to act together, all we want is honesty. Thanks to Forex Peace Army for bringing this to our attention.
johnb

 

[stevesmain]

Some companies have a 3 day wait before one can withdraw funds as this is the time to settle trades as they say.

Seems like a reasonable time frame to use rather than 2 weeks or more!

What ever they do, should be transparent in the agreement, even brought to a traders attention by a special phone call or email = good customer relations. If they have to hire a special person for this task so be it, it will prevent problems which take longer to deal with!

 

[ernest8fingers]

Yet another reason

Yet another reason to bail on the Forex market. Pretty much every broker agreement you sign states they can do anything they want. They can invent ANY reason to steal your winnings and they do. If my Brokers did such crap-I would do as I have already done half a dozen times, FIND ANOTHER BROKER! And rarely does a Broker give away money on a mystery spike-they make money-thats y they spike their feeds(regardless if they really do these things or not-they happen for sure) and that's reason enough to find another Broker or get out of the Forex market.

 

[ChrisEccles]

BTW - I love Chris Eccles idea of questioning your broker about their auditing policies in advance.

Thank you, kind Sir !
-
As a result of doing this, I received the following, in writing, as an email
from the London Dealing Desk of GFT Forex:

Dear Sir,

With reference to your email; We, GFT, are regulated by the Financial Services Authority and endevour to adhere strictly to the codes, conducts and regulations that are put upon us. We would firstly not take money from your account with regards to trades without prior authority.

Cancellations of trades are very rare, however if you do trade on a bad price, we would take steps to review that specific trade. This would work both on winning trades and losing trades. We do not suppress profitable traders by an audit, you can rest assured that we do not practise this and endevour to maintain a strong trust relationship with all clients.

I hope this clears up any rumours that appear to be floating around.

Many thanks

GFT Dealing

I am happy to work with them on this basis.
I reiterate my suggestion that everyone request a similar statement of
policy from their respective brokers and, if they do not get it, revert to
another firm.

-
Chris

 

[5of7]

A view from the inside.

We just went through the process of setting up our own brokerage, and I have to tell you, there is no such thing, or reason that I see, or anywhere in the process that was shown us.

Trades are recorded on the "Trade Server" and then sent on to the Liquidity Provider for processing. The liquidity provider also keeps transaction records that match the "Trade Server". Once orders are filled and done, they are done. There is no auditing. There is honestly no such thing.

The only thing is that if the trades were done at a dealing desk (all internal to the broker because they were your counterparty, and never sent to the market), then they can yell at the deal desk trader -- "How could you let this guy have these winning trades!" : - )

NOTE: Counterparty means that they take the opposite side of your trade (ie. counter - party). So if you say GO LONG, they say OKAY YOU ARE LONG and hold your order. At this point, if you take a loss, they show the profit, and also if you are in profit, the money must come from their pocket to cover your winner. This is the primary reason US Law states that counterparties must be registered, it's not really to protect your deposit, it's to make sure your winners are covered. Technically, it's legalized bucket shops.

Keep in mind that a broker that is acounterparty to you MAKES money when you have a LOSING trade. But more importantly (at least to them) is that whenever you have a winning trade, they have to pay you out of their own pocket (since your order was never in the market). So if you have a lot of winning trades, it reflects as a loss to their assets.

But if your broker is transacting your trades at the real market, then there is no such thing as an audit. We can't go back to UBS and say, hey remember those 7 winning trades from last week. They would laugh at us.

Now if you have a problem with a trade, you can go to the liquidity provider right away and pull up all the transaction records. But honestly there is no going back to them on a historical basis, especially to reverse something. Not only would they laugh at us, they would terminate our connection for being idiots.

So the only conclusion is that those are internal only, dealing desk trades.

It's easy, ask your broker, "ARE YOU EVER, EVEN FOR AN INSTANT A COUNTERPARTY TO MY TRADES?"

If they say yes, it means they can legally take the other side of your trades and do all that stuff. That's really the bottom line. There are lots of great brokerages out there, just ask them upfront, they have to tell you truthfully by law.

The reason I made this post is that it's an insider's view. It's just the facts from the inside operations since we just went through it all and setting it all up. There ARE lots of great brokers out there, just ask them.)

Trader 5of7 @ TheCollectiveFX.com

 

[journeyman]

Bucket Shops

So if the broker I am using is not a bucket shop am i allowed to do "scalp" trades? and also, what is considered a scalp trade? If im trading a 15 minute window, and i have trades open for a few minutes or more, who are they to decide I shouldn't be doing that?

More details would be a appreciated..

I am new to trading and kinda figured I could hold a 1 minute position or 2 hours, if i so wished?

Thanks

The point is not about scalping or not. The point is when a bucket shop sees you making money consistently, they don't like it. They'll find a way to erase your profits or shut you down. If you scalp and keep losing, they would be very happy about it. That's why they're called bucket shops. They're sitting on the opposite side of the table. Same thing happens if you keep winning money consistently from the casinos, they will keep you from coming back, because every dime you make is every dime they lose. Their businesses are set up to make money , not to lose money. The fairest way to trade is through a true ECN broker or to trade futures market because your brokers would be very happy to see you making profits because in a real trading market as opposed to the virtual bucket shop market , your profits come from the other trader who takes your positions, not from the brokers.