GDMFX is witholding my profits

Winston19

Recruit
Messages
24
On 24 July 2014, I traded on AUDUSD and I ended up in large profit. Subsequently, GDMFX cancelled the trades, invoking the off-market prices provision. In particular, they said:

“This email is a notification for order execution details.

Due to using an arbitrage expert adviser in your trading account # 8126263 all your trades which were opened at 01:45:00 on 24.07.2014 have been adjusted to the real market price - 0.9462.

Your EA had opened all these trades on a non-market price at 0.9442 which actually is the quote at 01:44:59 according to our tick history.“

I told GDMFX that I obtained a Bloomberg quotation which shows that the requested price that they entered and confirmed in the account statement and trading platform (0,9442) was available at the time I placed the buy order - 01:45:00. Therefore, their justification of incorrect prices was groundless and they should return the profits.

They replied the following:

“Under the normal GDMFX practice it will be possible to re-investigate your case with respect to the claims you have made in your last message dated 29th of July 2014.

Please, provide us with any evidence in support of your arguments in defense of your EA within the next one week!

Regarding the Bloomberg Quotes you mentioned, please note, no Broker will take responsibility for a quote shown somewhere else by someone else. Additionally, the Foreign Exchange Market is not a centralized market, therefore it is normal to observe differences between the Quotes offered by two separate providers at the same point in time.“

I told them the burden of proof regarding anything wrong with the Expert Adviser lied with them. In addition, I said:

“Although it is indeed possible to observe differences between the quotes offered by two separate providers at the same point of time, these need to be reflective of the real market price. Otherwise, a broker could adjust its prices as much as it sees fit to the detriment of the customer. The aforementioned construction is valid all over the world and my evidence shows that your quote was in perfect accord with the market rates. It follows that you were not authorised to adjust the price and I am entitled to all my profits and deposit.“

Later, they reiterated their previous arguments, stressing the particular provision in the contract and that was it. I was later told that a deadlock has been reached and that I could lodge a complaint to the Financial Dispute Resolution service.

GDMFX failed to produce any convincing evidence that the price was wrong. They merely stated that the real market price at 1:45:00 was 9,462. The attached Bloomberg shows that the price of 9,462 appeared in the market, however it is the - worst and - latest one. So, on the one hand GDMFX quotes the price of 9,462 at 1:45:00 which is in complete accord with the Bloomberg, but on the other it states that it does not reflect Bloomberg when saying that the original price of 9,442 was not present at 1:45:00.

Therefore, I believe that GDMFX was not authorized to cancel my trades because the originally quoted price was reflective of the market.
 

Attachments

  • BBG AUDUSD 24 July, 3.44.59.png
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  • BBG AUDUSD 24 July, 3.45.00.png
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  • BBG AUDUSD 24 July, 3.45.01.png
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  • Account Statement - cancelled trades.pdf
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FXWarriory

Banned for uncivilized conduct
Messages
373
Time had come for Scam brokers to create another stupid reason for not paying clients than off market prices!!!

Yet to know that EA's are that brilliant in opening positions at nonexistent market prices!!! They created the price?! Wasn't it the price found in the broker platform to trade!? Anyway, scam brokers like GDMFX accuse clients for same reason on manual trades, not weird to create it for EA's!!!

Any regulation for this scam broker?! Start filing a complaint if yes.
 

GDMFX

GDMFX Representative
Messages
13
Dear Winston19,

Thank you, for inviting us into this discussion!
Please note, your trades have not been cancelled as stated above. Your trades have been modified at the right price levels at the time of opening, as we have already clarified within our e-mail correspondence.
Therefore your statement "GDMFX is witholding my profits" is somewhat misleading, as you did walk away with quite a significant profit, which you have withdrawn from your account together with your deposit without any problems. Yes, GDMFX did have the right to void the said positions in full, but instead the company modified them, as it was evident at the time that if they were opened at the right price, you would still be in profit. In doing so the Company has acted in your best interest. Please, refer to our final response to you below as a reminder of said correspondence!

From: GDM FX Support
Sent: Thursday, August 21, 2014
To: *** ****
Subject: Re: Complaint

Dear Mr ****,

In respect of your complaint forwarded by you to Global Derivative Capital Markets NZ Ltd (GDMFX) on the 25th of July 2014.

We have been instructed to advise you that an internal investigation into the issues raised has now been completed.

We advise that the actions taken were in accordance with:

GDMFX Order Execution Policy, "Best Execution Criteria and Relevant Elements" Paragraph, "Speed and likelihood of execution" Sub Paragraph and associated regulations.

GDMFX Risk Disclosure, "Internet Trading Risks" Paragraph and associated regulations.

The GDMFX Order Execution Policy and the GDMFX Risk Disclosure are an inseparable part of the terms of the Client Agreement between GDMFX and yourself.

These provisions allow the company to decline a client order if the price requested by the client is not representative of the market price received by GDMFX. Additionally, as part of the GDMFX Risk Disclosure you have been informed and agreed to the fact that GDMFX reserves the right to void orders in the event of but not limited to software, hardware and Internet Connection failures. This is pointed out on the company’s website.

On that basis your claim in respect of your orders on Account Number 812**** with Ticket numbers 1745920, 1745921, 1745922, 1745923, 1745924, 1745925, 1745926, 1745927, 1745928, 1745929 is denied.

Please note, that even though we had the right to decline the said orders above in full, we exercised this right only partially by modifying your orders to the correct market price. Therefore your positions still resulted in a significant profit for you, as GDMFX has acted in your best interest under the specific circumstances.

We hope this concludes the matter to your satisfaction and if so please confirm this by return correspondence.

If, however, this is not the case then please advise accordingly in order that we can confirm the next steps.

In the event that an agreement cannot be reached (i.e. the complaint reaches deadlock) then, as you will be aware, Global Derivative Capital Markets NZ Ltd Is a member of the Financial Disputes Resolution Service (“FDR”) and the complaint can be referred on to the FDR for their decision.

Kind Regards,

Additionally, on the 22nd of August you have informed us that you do not agree with GDMFX on the matter and as a result you have been issued a Deadlock Number and informed that you can take the issue further to the Regulator for their decision. -Something, which apparently you haven't done to up to date. Therefore, let us use the opportunity to invite you once again -If you do not agree with GDMFX on the issue above, please be advised Global Derivative Capital Markets NZ Ltd Is a member of the Financial Disputes Resolution Service (“FDR”) and the complaint can be referred on to the FDR for their decision. If the FDR supports your claims, GDMFX will be forced to pay you the funds you claim. The fact that the FDR has not contacted us regarding your complaint up to date and instead we are all obviously engaged in a "hands-twisting" exercise publicly, raises a few questions in itself, won't you agree?

With regards to your alternative quotes, once again, please note:
The Foreign Currency Exchange Market is not a centralized market, therefore it is normal to observe price differences between different brokers at the same point in time. Even at this time at least two of every five large Brokers will have differences in their feeds. The above can actually be considered common knowledge: Foreign exchange market - Wikipedia, the free encyclopedia
Wikipedia said:
There is no unified or centrally cleared market for the majority of trades, and there is very little cross-border regulation. Due to the over-the-counter (OTC) nature of currency markets, there are rather a number of interconnected marketplaces, where different currencies instruments are traded. This implies that there is not a single exchange rate but rather a number of different rates (prices), depending on what bank or market maker is trading, and where it is.

FXWarriory said:
Dear FXWarriory,
We beg to differ.
Off market prices are quite a real problem for all FX Service providers. As a matter of fact some regulators have even published case-studies on the topic.
Please, take a look: Online foreign exchange trading | Financial Dispute Resolution
It is a fine example, even though it is slightly different.
In the case study above, the Broker voided all of the trades of the client in full -a decision which the Regulator supported.
In the present case the client's trades were modified to the real prices, which allowed him to walk away with a significant profit.

Regarding EAs,
Not all EAs ar bad. But with the numbers being sold online with no real regulation or control, ever so frequently traders end-up using a piece of code that is actually completely malicious and abusive and the worst part is that the buyer has no way of knowing, as for example most abusive EAs are advertised and vigorously defended as normal, white-hat, scalping or news trading bots.
With regards to creating prices, we can't comment, but as a matter of fact, EAs can be quite useful in creating arbitrage opportunities.
For example (strictly hypotetical, of-course):
Bombarding a server by creating bogus pending orders and frequently modifying them within short time-intervals from several different IPs at the same time, which contributes to a phenomenon called "Latency", or simply put "Delay" Latency (engineering) - Wikipedia, the free encyclopedia
That can be quite useful as if a server is slowed down enough, the trader can effectively see in the future (for which he would hypothetically need a non-delayed feed, say... Bloomberg for example).
To keep it simple it can be considered a type of Layer 7 DDoS attack Application layer DDoS attack - Wikipedia, the free encyclopedia EAs use bogus pending order requests, which they keep modifying constantly. By "bogus" we mean for example BUY LIMIT AUDUSD at 0.0001, which a few seconds later is modified to 0.0002 and then back and so on.
One curious fact about such a tactic is that the number of modification requests is not displayed in the Account Statement, but is strictly recorded in the Server Logs.
Just as with the classic attacks, sufficient protection measures have been created to protect against such EAs and Scripts as the one just described. Of-course it is self evident that every now and then someone gets through.
Sometimes due to a temporary vulnerability of the Broker, sometimes due to failure of a defence mechanism, or just by being plain smart and innovative.
Whatever the situation is, Brokers can not afford to award "windfall" profits, regardless whether the actions were intentional or unintentional.
We hope we have been helpful!

GDMFX would like to thank everyone for bringing this topic forth. We would like to conclude our representation by appealing to all readers: Please, buy your EAs from trusted sources only and make sure what you are using is aimed at making money from the market and not via exploiting loop-holes and/or security vulnerabilities. Forex Brokers are Financial Institutions too. Ask yourself -if you tried to hack a bank or an ATM machine, what would happen?

Kind Regards,
GDMFX
customersupport@gdmfx.com
 

FXWarriory

Banned for uncivilized conduct
Messages
373
Well, must congratulate your broker for finding a diplomatic and manipulative person like you for appointing as its FPA representative.

Your manipulation words are lovely, you know!!

First, not the client EA but your modification and change of prices that ruined the account.

Obviously, there was a news release at that time and the EA executed the trades before it by a second.

GDMFX can't resist EA scalping methods, then disallow EA Trading and never try to laugh at anyone here with your advice to choose good robots not bad ones and that ""completely malicious and abusive " was great too!!!

In your view of "bad robots" are the ones that loose you as a broker money and wins the client;)

Now, you want to also convince anyone here that the robot can do "a type of Layer 7 DDoS attack":D
Well, must search for the EA creator and give him the Oscar Award:cool:

You went to the extreme of funniest guy!!! Give us a break!

This too made my day: "Ask yourself -if you tried to hack a bank or an ATM machine, what would happen?"

Yes, We started to feel guilty about your poor broker, we must be sent to jail. Common Man!!!

Your tricks can work on clients via emails and phone calls but never on us;)

Briefly, you are not a news trading broker nor EA Trading broker, announce that on your website. There's no price was not there and EA created it!!!
Price can be there even before a second of news release, since it is seen on your mt4 then it can be traded FULL STOP
 

Amin EL-HAKIM

Master Sergeant
Messages
306
I'd like to add my experience with GDMFX in good faith. I think I have been proved over the years as an honest and reputable member of the FPA, and many of the senior members can confirm that. As many of you know, I'm a News Trader, as simple as it gets. Over the years, and with the advancement of MT4, I have automated my trading style, so, the story. I have opened an account with GDMFX a couple of months ago. I will not mention my deposit and my profit for the sake of keeping this post as an informative post no more. I started trading with my EA (which doesn't use any arbitration technique). After 1 trade, GDMFX moved me to an MT4 group where EA trading is not allowed, after inquiring the issue, they answered the following:
Dear Mr. Hakim,

Thank you, for contacting our Support Department!

With regards to your Expert Adviser - Please note, due to the increased traffic from your location we have upgraded our system architecture in order to ensure lightning-fast execution. This sadly, may create an incompatibility issue with some older Expert Advisers which are no longer supported.

We highly recommend to consider our BLADE Accounts, as the superior STP system there is able to support older software as well Account Types - GDMFX Forex Brokerage NEW.

Alternatively, if you prefer to use a fixed-spread account you can send us your EA and our IT department will investigate it in order to check if it is an incompatibility Issue and if a solution can be provided to adapt it to the newer technology.

So to keep the story short, I didn't argue (since after experience, I know that there's no point of arguing with a broker). Instead, I have continued trading manually, simply clicking the sell and buy buttons and trailing the SL with the MT4 trailing stop feature. I made a profit of around 1000% until my execution turned to 4-5 seconds. Then I asked for a withdrawal and a partial bonus to cash conversion. They were processed, and although the wire took around 2 weeks to hit my bank account, I was paid to the last penny.
I can say it was a fine experience, and if not for the execution slowing down, the broker was good and played fair.
 

Amin EL-HAKIM

Master Sergeant
Messages
306
Well, must congratulate your broker for finding a diplomatic and manipulative person like you for appointing as its FPA representative.

Your manipulation words are lovely, you know!!

First, not the client EA but your modification and change of prices that ruined the account.

Obviously, there was a news release at that time and the EA executed the trades before it by a second.

GDMFX can't resist EA scalping methods, then disallow EA Trading and never try to laugh at anyone here with your advice to choose good robots not bad ones and that ""completely malicious and abusive " was great too!!!

In your view of "bad robots" are the ones that loose you as a broker money and wins the client;)

Now, you want to also convince anyone here that the robot can do "a type of Layer 7 DDoS attack":D
Well, must search for the EA creator and give him the Oscar Award:cool:

You went to the extreme of funniest guy!!! Give us a break!

This too made my day: "Ask yourself -if you tried to hack a bank or an ATM machine, what would happen?"

Yes, We started to feel guilty about your poor broker, we must be sent to jail. Common Man!!!

Your tricks can work on clients via emails and phone calls but never on us;)

Briefly, you are not a news trading broker nor EA Trading broker, announce that on your website. There's no price was not there and EA created it!!!
Price can be there even before a second of news release, since it is seen on your mt4 then it can be traded FULL STOP

Can't disagree with your statements good friend.
 

FXWarriory

Banned for uncivilized conduct
Messages
373
Dear Amin just approved my reply to the broker representative that it is not an EA Trading broker.

Read what they told Amin: ""you can send us your EA and our IT department will investigate it in order to check if it is an incompatibility Issue and if a solution can be provided to adapt it to the newer technology""

Are you for Real GDMFX?!, asking a client to send you his EA!!!, they wanted to make good tweaks on it to make it compatible to the broker platform to insure Amin makes more money:D

Even if a broker approve withdrawals, it does not make it an innocent broker from manipulation tricks for winning clients, "execution slowing down" maybe one of it;)
 

GDMFX

GDMFX Representative
Messages
13

Dear FXWarriory,
Thank you, for your reply! We are left with the impression that you felt offended by our post above. It was not our intention. As we were invited to reply, we aimed at providing relevant information for the complaint above and to your original comment, as it was relevant to the topic.
Nevertheless, thank you, for finding our team "diplomatic"!
With regards to your comment regarding allowed trading methods, we would like to assure yourself and every other interested party, that the conditions under which trades can be declined or voided have been listed in the Legal Documents available at our homepage since the 25th of October 2012.

Amin EL-HAKIM said:

Dear Amin,
Thank you, for your post and congratulations for your results! It sounds most impressive!
We are sorry that you have decided to leave.
We are constantly working to improve every aspect of our Traders' experience and will be happy to see you back at some point if you decide so. Please, don't hesitate to give us a call if you need anything!

Kind Regards,
GDMFX
customersupport@gdmfx.com
 

FXWarriory

Banned for uncivilized conduct
Messages
373
Stop playing games GDMFX Rep., start answering my questions instead. We are not here to play with your manipulative mind.

Answer the following:

- How the client or his EA were able to open positions on prices not existed on your platform?!

- When you can't absorb EA trading, why not disallow it!?

- Why not disallow news trading instead of modifying clients positions as you had done in this case!?

- Why client EA consistently(as you said) modifying positions is seen illegal by GDMFX!! when you accept EA Trading?!

- Why you asked Amin to give you his EA?! Don't tell me you wanted to positively tweak it!!!!

To remind you that GDMFX is in a bad position in this case, even if you want to hide behind your terms and conditions or "legal documents", you can't modify clients positions just because EA's had beaten your system and made profits for the client.

*Note that all EA's(esp. scalping ones) modify positions many times and can also hide the real take profit and stop losses from the broker.
Even in manual trading the client can modify the order as much as want until offer price doesn't differ from market price in certain pips distance that differ between brokers but mainly 2-5 pips.
Knowing that it's totally legal to modify positions as long as needed and anyway client can not go further than the distance of pips between offer and market price before being disallowed by the system. So your hilarious comment about client EA abusing your system or platform is false.
 
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