Has your broker been using your account to mop-up losses after the Swiss franc hit them hard? (And what might you do if they have?)How have you been getting on with your Forex broker recently?
Noticed an unusual drop-off in the performance of your strategy?
I know some traders have. Here’s a glimpse into what’s been going on…
It’s now 8 weeks after the Swiss franc de-pegging sent a bit of a shockwave through the Forex industry and, as I’m sure you know, some brokers were hit very hard. Alpari and FXCM were both high-profile casualties. And it has to be said, I think the after-effects are still being felt…
Many brokers have tightened-up the portfolio of markets they offer – they are now VERY nervous of Forex pairs with currencies openly manipulated by the country’s central bank (things like the Danish krone and its peg to the euro) and understandably so! It would be a bit irresponsible if they continued with the same cavalier attitude after the Swiss franc proved how they were overexposing themselves.
More concerning to us everyday traders though, is the low liquidity some brokers have been offering around scheduled economic reports. I’ve seen situations where the bid/ask quote has ballooned out to 50 or 60 pips with certain brokers, even in major markets like EURUSD (where you’d normally expect a 1 or a 1.5 pip spread).
Now on one hand, you can’t blame them for covering their backs. They can’t afford to be caught with their pants down again. And if a few clients’ stop losses get triggered by widening out the spread… well, that’s just a bit of fortuitous collateral damage, isn’t it?
Hmm, funny how those things work out in the broker’s favour though. And it’s all going toward making up for losses they took on Swiss franc day.
So have a good think about this situation, and then ask yourself:
Why the hell should I foot the bill just because my broker got their greedy little fingers burnt by being reckless in the first place?
It’s not our fault they got caught out. We just want to get on and place our trades on a level playing field. We shouldn’t need to do battle with the markets AND our broker. They should be on our side: a trading partner instead of an adversary.
So if you’ve noticed a lower than normal strike-rate on your trades, getting stopped out where you’d usually expect your trade to run-on, you might be getting fleeced by wider spreads and probably haven’t even realised.
Check your trading records as soon as you can. If you think you’ve fallen victim to underhanded shenanigans on the part of your broker, I suggest you look for an alternative provider, quickly.
There is no shortage of options out there, so why continue to trade with a broker who queers the pitch against you?
And while we’re on the subject, were you affected by any retrospective re-pricing of trades during the Swiss franc melee? (Some brokers changed the prices at which client orders were initially filled at. They say these orders didn’t reflect the ‘true market’ available at the time. The changes were made to benefit the broker, not the client of course!)
So after today’s eletter, if do you find yourself on the hunt for a broker able to conduct themselves in a reputable manner, there is one outfit I think you might take a look at:
I think you should consider GKFX.
I’ve been keeping an eye on a range of brokers and I can say, without hesitation, GKFX’s spreads have remained consistently tight, even in the face of big data releases like the US job numbers. (Where others widened out to a 45 pip spread on GBPUSD, GKFX kept it tight at 2.7 pips.)
But what if you don’t really trade around data reports?
Now you might say: “Why should I be bothered? I don’t trade around reports.” But actions speak louder than words. The less scrupulous brokers are showing you the disdain with which they are prepared to treat their own clients.
And don’t you deserve better?
Would you allow yourself to be blatantly fleeced next time you pay the bill in a restaurant, or ripped-off when you’re buying a coffee? I don’t think so.
So why let your Forex broker get away with it?
I’m a firm believer in placing business with companies that earn my respect. If you feel the same, I’m sure you’ll be impressed by the product and service GKFX offer.
Why not give them a try-out. Open a free demo account today and upgrade to a full account if you like what you see. You might even share your thoughts over in the forum so other TN members know what you think.
Markets available: All the major Forex pairs – EURCHF, EURGBP, EURJPY, EURUSD, AUDUSD, GBPJPY, GBPUSD, USDCAD, USDCHF, USDJPY.
Plus a range of minor Forex markets, precious metals, commodities and equities (indices and individual shares).
Spreads: Tight! Go take a look on the demo platform. You’ll be pleasantly surprised.
Trading platform: Your trades are executed through the industry standard Metatrader (MT4). They also have their own MT4 ‘Booster Package’ plug-in with eight proprietary tools. Mobile apps for all Android and iOS devices are available.
Customer service: Great customer service. I had an old CFD account I wanted to change to a spread-bet account and it was all handled with one phone call: no endless emails of scanned documents.
GKFX are based in London and are regulated by the Financial Conduct Authority.
Trader’s Nest verdict: It sometimes takes a shock event like the Swiss franc de-peg to weed-out the weaker hands and let the strong shine through. GKFX have performed impeccably throughout and proven themselves to be a solid and reliable trading partner. They get my highest recommendation.
Website: GKFX.com
Address: 30 Charles II Street, London. SW1Y 4AE
Minimum to open account: £250
Minimum stake per pip: 10p
Free demo account available: Yes click here.
Be Prepared: Market Moving Data Coming This Week (London Time)
Wednesday 18/03/15:
09:30 GBP Average Earnings Index
09:30 GBP Claimant Count Change
09:30 GBP BoE Monetary Policy meeting minutes
18:00 USD FOMC Economic Projections
18:00 USD FOMC Statement
18:30 USD FOMC Yellen speaks
Thursday 19/03/15:
14:00 USD Philly Fed
Friday 20/03/15:
– no big reports
Monday 23/03/15:
14:00 USD Existing home sales
Tuesday 24/03/15:
08:30 EUR German Manufacturing PMI
09:30 GBP Consumer Price Index
12:30 USD Consumer Price Index
14:00 USD New Home Sales
Remember: don’t let those brokers turn the screw on you. If they don’t respect your business, vote with your feet – trade with a broker that values you as a long-term client rather than a sheep to be fleeced!
And if you have suffered by circumstances outside your control let others know about it. Post a comment on the TN Facebook page here and let’s shine a spotlight on any bad behaviour by the brokers.
I’ll catch up with you again very soon…
