• Please try to select the correct prefix when making a new thread in this folder.

    Discuss is for general discussions of a financial company or issues related to companies.

    Info is for things like "Has anyone heard of Company X?" or "Is Comany X legit or not?"

    Compare is for things like "Which of these 2 (or more) companies is best?"

    Searching is for things like "Help me pick a broker" or "What's the best VPS out there for trading?"

    Problem is for reporting an issue with a company. Please don't just scream "CompanyX is a scam!" It is much more useful to say "I can't withdraw my money from Company X" or "Company Y is not honoring their refund guarantee" in the subject line.
    Keep Problem discussions civil and lay out the facts of your case. Your goal should be to get your problem resolved or reported to the regulators, not to see how many insults you can put into the thread.

    More info coming soon.

I ENVY YOU - about safety of deposit

fxcommentary

Recruit
Messages
2
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.

--

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

--

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.

--

In any case - if anybody suggest broker her. PLEASE DO NOT TRUST IT. All you can do is check it yourself.
 

AsstModerator

FPA Forums and Reviews Admin
Messages
5,716
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.
 

fxcommentary

Recruit
Messages
2
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.
 

Pharaoh

Brigadier General
Messages
20,237
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.
 

joaoguitar

Private
Messages
21
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?
 

binary-explorer

Private
Messages
18
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.
 

binary-explorer

Private
Messages
18
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.
 

Roaming

Banned for uncivilized conduct
Messages
142
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:
 

Chan Ming

Private
Messages
18
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?
 
Top