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Repercussions of closing a Forex contract early?

Discussion in 'Beginners Bootcamp' started by Denizati, Mar 5, 2019.

  1. Denizati

    Denizati Recruit

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    Hi,
    I was wondering if someone could help me. I accidentally pushed the ‘close all’ button on my Forex account page and now my broker is saying that I need to send them thousands of dollars because I closed the positions a week early. I explained that it was an accident but they say it’s a tax/penalty payment that they need in order to unlock my account - which they locked as a result of this mistake. They also said that as soon as I pay it they will give it back. I have enough money in cash in my account to pay but they said they can’t use that because it has to be ‘an external payment’. It does not sound logical or necessary to me, so I was wondering if anyone knows more about why they are saying this / is this a normal consequence of closing a contract early.

    Thank you in advance for any clarification you may be able to give.

    Alex.
     
  2. FxMaster

    FxMaster Lt. Colonel

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    What was the amount in your account?
     
  3. Denizati

    Denizati Recruit

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    In the whole account? Or just the cash portion? I’m not sure how that’s relevant?
     
  4. Pharaoh

    Pharaoh Colonel

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    In any normal retail forex broker, you can open and close positions at will. A few require trades to be open for more than a few minutes because they are not well connected to liquidity providers (or aren't connected at all) and ban scalping. A retail forex contract is actually for 2 days, but rolls over automatically.

    Did you have some sort of long term options or futures contract open at the company? Even then, if you've got a button to close those, I don't see how that could trigger a penalty. If there are taxes due, that's based on profits made. The only way you could owe more is if they have minimum time limits to hold a contract before the tax rate changes - if that happens, that should be considered a higher bracket for shorter term investments, not a penalty.

    Many brokers have had many claims of a need to send the broker "tax" money before a withdrawal could be processed. Although it is within the realm of possibility that some country might require this, the vast majority of the time it's just an excuse to collect money while delaying a withdrawal. If that is the case, payment will be followed by a demand for some other money that needs to be paid before the withdrawal, then more, then more.

    What country do they claim you owe the penalty to? Ask them for the web address of the tax authority (and confirm that it's a real government site) so that you can directly confirm if any taxes are owed and how those should be paid.
     
    Etedus12 and geovaridel like this.
  5. Etedus12

    Etedus12 Sergeant

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    Hi Denizati, I'm really sorry to hear what you've got to go through. People make mistakes every now and then, what matters is if you learn from your mistakes or not. I don't know much about this issue, but I guess it's got to do with your broker's policies. You can contact customer support for help, but if that isn't forthcoming, I suggest you pay and then find another broker with more understanding and better customer relations
     
  6. Olieng38

    Olieng38 Corporal

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    Hi, don't let some broker with manipulative poicies and penalties bring you down and stop you from achieving your dreams as a forex trader. If they can't help you out of this mess; find money, pay the penalty and then leave them! After all, who wants to trade with a broker with deaf ears to your problems?
     
  7. TrapLok

    TrapLok Recruit

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    I find this very strange. Are you sure that you are trading Forex? It sounds more like forward or futures agreement. Anyway, there is absolutely no chance that broker can tell you how long you are going to keep your position open. Something is not right here
     
  8. Shalirad

    Shalirad Private, 1st Class

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    That sounds like a total scam to me from the very begining, I assume they will simply scam you out as soon as you will send them the money, please tell me how much do they took from you. Are they regulated so you can really fill some complaints.
     
  9. bigdolly

    bigdolly Sergeant Major

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    Could you please describe more what does it mean close all positions? Did you trade on your own or broker was making trading decisions for you? When you close positions, instead there is no risk exposure and your money into account can't be affected by market price movements. I really can't get understand what is the reason they charge. Looks like a outright scam.
     
  10. JamesForexSlayer

    JamesForexSlayer Sergeant

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    I didn't know you could close all positions at once!
     
    momo3HC likes this.

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