Regulated forex brokers are not free from cheating!
Some tricks you should watch out for amongst even regulated forex brokers.
The forex market is one that has a lot of factors militating against traders. From unpredictable swings to internet outage, the list is quite lengthy but apart from these, some forex brokers will employ subtle tricks all aimed at ensuring that the trader does not make money consistently from the markets. In times past, only unregulated brokers behaved in this manner as they had nothing to worry about. Today though, it is sad that even regulated brokers have started playing these pranks. Of course they won’t go as far as disappearing into thin air with people’s money but they behave in a very subtle manner such that the trader won’t even be sure of what is going on!
What are these tricks by some regulated forex brokers?
- Tricky stop hunting:
If you ever used any unregulated broker in the past then you will be very conversant with the concept of stop hunting. What unregulated brokers normally do is to watch out for heavy orders. As soon as someone places a heavy order and markets starts drifting towards the stop loss of the individual, they wait for market to get close to the stop loss by 5-7pips and immediately close the trade. When you try to protest, the answer they will give try to use the spread as an excuse, an argument that doesn’t hold water. The regulated brokers on the other hand will not close it at 5-7pips to your stop loss. They will close it by a single pip. The trick however is that they will only do this when you are not watching! So if you have a running trade and you are staring at your screen as price goes near your stop loss, most of the time it won’t get triggered until the level has been breached perfectly. If you logged out of your platform however you will come back to find that your stop loss was triggered even when price didn’t exactly reach the price you set. When this happens the first time, the individual will be at a loss on what actually happened. It is only at the 3rd time that they wake up to the reality that they are being fleeced!
- Delay in processing withdrawals:
With most traders, the routine is to file for withdrawals as soon as some decent profit is made and continue trading but you’ll find out that some regulated forex brokers will simply refuse to process the withdrawal within the timeframe stipulated in a bid to see if the trader will experience a drawdown that will nullify the withdrawal. To understand that this is a trick, watch and see that withdrawals you make without having any open trades are honoured much faster than the ones you make when you have a trade running!
- Platform freeze at news release times
This is done by only a handful of regulated brokers but it is worth mentioning as it is a way through which many traders have lost a lot of money. During news release times, most regulated brokers will enter you into a trade but will not allow you to close existing ones! By the time the trade is closed, the market must have gone way past the point you hit the close button!
So, do not relax because you are using a regulated forex broker, always be on the lookout for these tricks!