the forex -is total scam?

[Pharaoh]

Yeah, it was the special client-screwing differential slippage plugin that they got busted for.

I'd have to do some digging to find cases where the NFA forced a broker to pay back a trader. There are rare, but if you look up a few of the larger brokers, they are usually listed as "reparations cases". Although NFA brokers are also prone to doing "stupid broker tricks", the number of complaints I see about failure to return money owed to a trader against those brokers here at the FPA is tiny compared to unregulated brokers. That alone increases my confidence.

The NFA also put a quick and painful stop to the practice of "compliance audits" before withdrawals for regulated brokers. If a broker wants to claim a price feed error to cancel a trade, they have a very limited time to do that.

Now if only the NFA and CFTC hadn't screwed up leverage, hedging, etc.

 

[Johnny2pips]

Please try and find one post where a regulator forced a broker to pay up to a trader. I cannot find any. I'm by no means being disrespectful to your input or knowledge here.

 

[Pharaoh]

In addition to forcing refunds for cheating on slippage, I did some more digging for you and found a big one for you. $60k plus legal fees:

Arbitration Details

 

[asdfg]

Well now, nobody has challenged me yet. FX is the same as Online Gambling.
No Broker is backed by MAJOR BANKS and all. They use your losses to pay others gains. It's all inhouse and stuff.
I've been here long enough to realize this. I can't believe that there are so many people trading FX with real money and all and still expect to MAKE money.
And, yes, I do have a real account that I funded with $15K. I did this before I actually went into it more deeply and all.
Now I can kick my own behind for doing so. I don't expect any money back from my broker.
They will surely find something wrong with my trades.

Ok,.Johny and Pharaon thanx a lot. I understand the situation. I done some conclusion for myself.Wish you all the best...

 

[Johnny2pips]

Thanks for that Sarge. Pity no FPA member has not won or posted a winning case here. They seem to disappear after a few complaints.

 

[Pharaoh]

From what I can see, winning an NFA arbitration case is a royal pain and requires a lawyer to have any real chance of success. If your broker rips you off for a few hundred dollars, it's not worth the time and effort.

It could be worse. The Swiss Regulators shut down Crown Forex and are still trying to find the money and decide how to distribute it. Naturally, some of the money recovered will have to pay the salaries of the group hired to handle the liquidation, so the liquidators may not be in too much of a hurry.


Thus, regulation isn't equal to perfect safety, but no regulation places you 100% at the mercy of a broker that decides to grab your money and run. To the best of my knowledge, the only major NFA broker that wiped out the bulk of their clients was Refco. Clients ended up recovering only a small percentage of their money. Without regulation, they'd have probably gotten nothing at all.

Your best option is to split your money between 2 different brokers and watch both carefully. At the first sign of trouble with either broker, test the withdrawal system. If there are any delays, make it plain that they've got 1 week to get your money or you will file complaints with the FPA, regulators, and anyone else who will listen. Even if there are no delays, if you see new complaints piling up for your broker, that's a good time to significantly reduce the amount of money you have with them. You can always put the money back into your account later.

 

[Johnny2pips]

From what I can see, winning an NFA arbitration case is a royal pain and requires a lawyer to have any real chance of success. If your broker rips you off for a few hundred dollars, it's not worth the time and effort.

So the regulators are NOT actually Regulators. Not so and all.
If you have to employ a Lawyer, then the regulator is out the picture, not so??
So the Regulators are then not REGULATORS are they? What do they Regulators actually do?

 

[Pharaoh]

That's a little like saying that there are no traffic regulations since most drivers regularly break the speed limit.

You probably won't ever find any US brokers using that MT4 differential slippage plugin again. The regulators have made it plain that this method of cheating clients won't be tolerated inside the US. US brokers are also now prohibited from pulling the much-abused "incorrect pricing" method to cancel your profitable trades days, weeks, or months later. Slowly but surely, the regulations are leveling the playing field between traders and regulated brokers.

The NFA, SEC, and CFTC have broken up some huge scams and continue to pursue them. It's not practical for them to launch a full scale investigation of every client disagreement over $100. Large brokers have their own staff lawyers who are specialized in keeping the company out of legal trouble. This is why winning a case is an issue.

Compare this to the much more regulated trading on the New York Stock Exchange. You would still find it to be difficult, expensive, and impractical to win a case against a broker for a $100 dispute. You would also have trouble interesting the SEC or CFTC in putting any effort into something so small.

 

[geoffrey]

Re: The Forex - Is Total Scam?

Is not.

However essential factors must be considered first before you will be successful in it. How much, How long and well have you got training in forex trading. Do not rush into forex market because you are eager to make the dollars, euros, pounds etc., because you will definately rush out.

What information do you have about the broker you chosed? Get diversed opinion about certain brokers.

How much and well are you able to control your emotions during trading. How well can you manage your trading skills. These and much more will prove that forex is not total scam.

 

[JemmyC]

How "safe" investing in forex is entirely up to you. The truth is, in every investment, there is some risk to it - even if it is very little. The risks in forex trading are of course, that you can blow out your entire account if you don't know what you are doing. Trading - like every other investment - requires a lot of studying, practice, hardwork and patience.