RESOLVED Case# 2013-098 | Tradetowin vs www.avatrade.com

[Tradetowin]

I've been having an email conversation with a representative from AvaTrades over this issue.

If I can't make any more progress soon, this will be moved to Open Cases.

Paul Williams has posted in my other thread. He is showing some screenshots from a bloomberg terminal showing my entries were supposedly 10-15 pips outside the "market". Suppose this is true then why cancel the whole profit and not adjust my entries as an honest operation would do. I have made 100 pips of profit on one of the examples and the issue is that the entry was 10-15 pips off the bloomberg feed?! How about the rest, 85 pips at least are profit.

Clearly Ava is trying to manufacture evidence to support their bogus practices of cancelling profits, when the simple truth is I made a legitimate profit and now they have to pay out.

 

[Tradetowin]

It has been over 2 weeks since anything was posted here. Will this go up for a vote?

 

[AsstModerator]

Cases usually go to a vote the week after they are moved to the Open Cases folder. This was moved to Open Cases today. If there is not a resolution or convincing evidence provided soon, it goes to a vote next week.

AvaTrade has been communicating with me by email. They have not yet provided information to make me believe that Tradetowin used arbitrage.

 

[sbobbj]

AVA Trade Case

If Ava has no written documentation prohibiting the use of EA, then cancelling his profit is fraudulent, AVA should be treated as a scam. Early this year I was about opening an account with AVA, but, some how I declined for obvious reasons.

 

[Onyebuchim C. Obike]

Theres a lot to learn from this case. One of this is agreeing with your broker before using any EA on their platform. AVA needs to provide concise proof in documentation that they prohibit arbitrage. I also agree that the areas where arbitrage was spotted should be removed and not the whole profit except everything was a result of the prohibition.

I think the FPA would do a lot of help here by explaining clearly to FPA FANS (i.e the Jurist) what and how arbitrage works. This will guide our judgement.

 

[ruseneca]

If Ava has no written documentation prohibiting the use of EA, then cancelling his profit is fraudulent, AVA should be treated as a scam. Early this year I was about opening an account with AVA, but, some how I declined for obvious reasons.

I'm sorry! I disagree with that! It is clearly stated that arbitrage and scalping are prohibited!

20. PROHIBITION ON ARBITRAGE AND MANIPULATION

Internet, connectivity delays, and price feed errors sometimes create a situation where the prices displayed do not accurately reflect market rates. The concept of arbitrage and "scalping", or taking advantage of these Internet delays, cannot exist in an OTC market where the client is buying or selling directly from the market maker. Ava Capital does not permit these practices on its platform. Ava Capital strictly forbids any form of manipulation of its prices, execution, and platform or making transactions based on errors, omissions or misquotes on the Ava Capital platform. Ava Capital reserves the right to investigate and review any account Ava Capital suspects of manipulation and withhold funds suspected of being derived from such activity. Ava Capital reserves the right to void any transaction which it has determined to be a result of any of these practices and will have no liability to the customer whatsoever for any losses incurred.

No matter how their client has traded, automatically or manually, when an arbitrage trading is prohibited, you simply open an account with another broker which accepts all trading styles, EAs and so on...
By publishing

The EA I use is not a fully automated EA . It works in the following way.
1. I place a trade as soon as news releases come out(this part is manual or triggered by news trading software which clicks either buy or sell)
2. The EA replicates my BUY/SELL instruction to several forex brokers
3. The EA manages the positions in the seconds right after the news release by placing protective stops .
4. Once the market absorbs the news and prices settle I manage the positions manually on most occasions and decide whether or not to hold the position for longer in anticipation of a further move or close out the position right away.

@Tradetowin has already confirmed that he's used the EA so...I don't see any optimal solution except withdrawing everything or transferring the deposits to another broker.

 

[FXPulsator]

@Ruseneca,

If Arb or EAs are prohibited on the Ava platform, the trade should be cancelled within minutes[And the Trader has to be warned immediately to STOP such type of trading, ref to Trading Conditions] However in this case AVA has cancelled [after weeks it was opened] the trades when the profit was booked .. this shows that AVA waited to see if this trades turn out to be profitable OR not.. had it not been profitable, they would have kept mum on this, it seems their strategy did not favor them.

Further, if the Bloomberg quotes were 15pips off the price at which the trade got filled on the AVA platform. AVA is bound to honor that trades, for the simple reason that they did not cancelled the trades immediately when they were placed.

Anything else is the retro justification & AVA is now cooking up the evidence to justify their bucket-shop policy.

 

[Pharaoh]

The trades were open for extended periods, so any claim this was scalping is false.

Tradetowin says the trades were triggered by a news EA. There are many of those. One is available for free right here at the FPA. It's called Forex News Gun. It's an autoclicker EA that launches a long trade if the deviation in a news release should be good for a currency and a short trade if the deviation should move price down.

Think about this - if there is a news release with a big deviation, price will move quickly. A slow reacting broker may end up filling some orders at off-market prices. Under those circumstances, the fill will almost always be in the client's favor.

That's not arbitrage. That's a broker with a price feed that lags behind reality. Forex is a decentralized market, so what a broker presents to a trader is supposed to BE reality. If you went to most brokers to complain that your fill was 3 pips off from Bloomberg, they'd tell you that the broker price is the real price.

Even so, AvaTrade reserves the right to adjust off-market fills. Ava reserves the right to adjust trades that had off-market fills. Unless AvaTrades is a bucketshop that never passes orders on to their LPs, the orders were placed and were filled at some price. If so, that AvaTrade needs to adjust these orders and pay the profits that they earned at the so-called real prices.

There's no excuse for not starting these adjustments as soon as the errors were detected. Instead, AvaTrade waited more than a month after the first so-called arbitrage trade.

 

[Tradetowin]

The reality of this is that Ava is a market maker. As such any profits they are able to "steal" from me and others like me will go to Ava's owners pockets. What reasoning they come up with to cancel profits is irrelevant when no matter what strategy the trader uses, Ava takes the opposite of the trade side therefore creating a huge conflict of interest.

With such conflict of interest Ava seems to be inclined to manufacture reasons to cancel legitimate trades, I say legitimate because those could be filled at other brokers, i.e. ActivTrades and even bloomberg as Ava has suggested with slight price adjustments.

Ava still has a chance to make this right by returning my money. Otherwise I am still fighting my fight via their Irish and Australian regulators.

 

[Tradetowin]

That's not arbitrage. That's a broker with a price feed that lags behind reality. Forex is a decentralized market, so what a broker presents to a trader is supposed to BE reality. If you went to most brokers to complain that your fill was 3 pips off from Bloomberg, they'd tell you that the broker price is the real price.

Good point, I'd sure love to see someone go to Ava asking them to adjust their entries based on a bloomberg feed, which will result in a larger profit for the trader. Somehow I have a feeling that this will most likely be ignored or a link to their T&C will be given and Ava would say that their price is the 'real' price. Then again how many of us have a bloomberg terminal where we can compare prices, I sure don't, that's something available to institutional investors only.