You’ve probably heard of Forex brokers ripping off their clients by using various dirty tricks. Some of the most common ones are: stop hunting, requoting, widening the spread to some ridiculous number, software disconnects, lagging/fraudulent price quotes, unfilled orders, and account banning. Yes, they will politely (sometimes not so politely) tell you to bugger off if you’re consistently profitable.
I bet you’d like to know what tools brokers use to accomplish their nefarious deeds. Well, I’ve got just the thing for you! Check out the screenshots below:
Yep, your eyes are not deceiving you. They actually have very specialized and advanced software that they use on their trading servers to make sure that YOU end up losing. In most cases the majority of these so called brokers don’t even deserve that title. Technically speaking a broker is only an agent who executes orders on behalf of clients, whereas a dealer acts as a principal and trades for his or her own account.
Someone asked on MetaQuotes forum “What is the Virtual Dealer plugin used for? Many pepople want to know.” and guess what happened:
Here is more:
Lovely, isn’t it? I very much doubt that only MetaTrader4 based brokers have this type of software installed on their trade server. I often hear brokers touting that they have “no dealing desk” and whatnot, but to me this is just exploiting the vagueness of language. When they say that they have no dealing desk they really mean it, BUT what they really mean is that they have no HUMAN operated dealing desk, and instead they use software dealing desk applications such as the one you see in the screenshots here.
Experienced trades already know the games dealing desk forex brokers play so this post is mainly geared towards beginning traders. Having said that my advice is this:.
1) Stick to only so called “reputable” brokers. Do your research before you open an account with any broker. It may also be helpful to ask them if they use virtual dealing desk software. Ask them to send you a written statement saying that they do not. If they refuse or do not answer then simply move on and DO NOT open an account with them.
2) DO NOT open up a large account with dealing desk brokers. I’ve come to learn that the majority of brokers have software routines that specifically flag large accounts. They will target you and incrementally erode your account balance using their dirty tricks.
3 ) If you can avoid this stay away from trading before/during/or immediately after important news releases.
4) Take money out of your brokerage account on a regular basis!
5) Learn learn and learn some more. Practice in a demo account until you are consistently profitable. When you are then I suggest you look to open an account with an ECN broker.
That about does it for this post. If you wish to discuss this topic you can either visit the Forex Nirvana forum (my own forum) or the forex factory forum thread.
Forex Nirvana Forum:
Thread on the Forex Factory Forum:
Happy trading everyone, and I hope you don’t end up being victimized. If you do please see me with your proof/evidence and I will gladly publish it on my blogs.
90 thoughts on “Proof that forex brokers cheat you”
what do you think about OANDA?
are you have bad experience or heard something wrong with this broker??
I like ECN broker but I don’t like their platform and big deposit. maybe if I have more money I think I will choose ECN like interactive brokers or MB trading
I heard MB trading will make meta trader but if MBT use metatrader i afraid meta is easy to give a plugin or software than other platform
how about you?
very informative and valuable blog. Thank you for sharing this information with us.
Thanks..glad you like my blog.
Im a newbie. Thank you so much for the heads up. Now, could you or someone tell me what a “ECN Broker” and the difference between a broker and market maker. I know what a stock market maker is but what does “ECN” stand for? I’ve also notice people say “don’t trust any broker even ECN broker. just keep on eye of them ECN or not” Ok, Now tell me how to “keep an eye on them” and how do you tell if there is any “funny happenings”? How does one know if they have been cheated? I demoed an account full time at FXCM for 7 months. I would average about 20% per month, so I decided Before trading a live account (mini) I would ask the online support if the demo account is exactly the same as the live account. They stated “there is no difference”. I started trading live and that is when the bank credit crisis happened and I got wiped out in less than a month.I didnt run stops but would hedge in the opposite direction.
I have never felt so defeated in my entire life.
Then I read articles and threads like yours Alan, and I wonder if I was cheated? Or was it just a bad time to get in. And it doesnt make sence to me. Why would a broker play games to wipe you out (sure a lot of money upfront), when he could probably make a lot more in the long run if the trader is allowed to keep buying and selling. And if successfull, the trader will be increasing the number of trades as his account builds up. I wrote the NFA in regards to this subject and they told me to call in to a certain department.
****So back to the important question….How does one detect foul play on the part of the broker?”***
How rude of me, I forgot to sign off and say “Thanks for your input people”. Ok…here I go…
Thanks everyone for the input.
(knock down but not out)
Terry, I can answer your questions. “ECN” stands for “electronic communications network”. You can find out all about ECNs on the Internet by searching.
As far as the “demo account,” you were misinformed, it is not exactly the same as a real account. Here is why: the demo account recognizes your “fake trade” by matching it up with a real trade that actually occurs in real life. Thus, you probably noticed that you had very fast executions of your “demo” trades and that your real-life trades were not as instant. That’s because in real life, whoever is buying can choose not to buy from you, and whoever is selling can choose not to sell to you. This is especially true if your orders are “market orders”, a market order on the demo account will almost always be filled instantly at the best price but in real life that doesn’t always happen. In itself all of this is not “illegal” because there is no regulatory agency involved to watch the people who are trading currencies.
That being said, there are reputable brokers out there, not everyone is a crook! Sorry you got wiped out but take heart, many other people have been wiped out for much much more than you lost and have bounced back and become successful. I would suggest that you practice on the demo account until you are extremely competent and try again. good luck
Someone asked the question “WHY??, would the brokers want to do this and why trade against me”
Well here’s a simple answer…..
Let’s say you open a $5000.00 account today. You transfer the funds to the Broker of choice.
You have effectively seen your money leave your posession and handed the posession of the money over to the Broker….
You wave goodbye to your cash, as it turns the corner and waves goodbye to you, and it rounds the corner…. never to be seen again.
See, at that point when you handed your cash over, you exchanged it for nothing more than digital data on a computer screen. Your broker supposedly makes this as good as cash true?
But it isn’t. See, all they need to do now is make sure that those digits on the screen gradually go to zero and they just made $5000.00 playing a very complicated electronic game with you.
A game that is computer enhanced to make you seem like you are winning and losing, but eventually wipes you out.
And once wiped out, you will never complain because you did it to yourself right?
I’ve been trading for years, live trading. Real money. I’ve blown out two accounts of $5000.00 and one for $1000 total: $11k
One of my accounts in 3 weeks I built up to $8700.00, with quite a winning streak.
Then something strange started happening… buy stops and sell stops that i had set were getting hit when the price was nowhere near….
Many things…. on one occasion i had a good trade set up, and the platform didn’t execute the trade until 40 pips later, at the bottom of the trend, which then reversed and wiped me out. In other words it opened me up with a built-in 40 pip loss.
FXCM told me they didn’t guarantee execution.
..So I’m a broker and let’s say I take in $1,000,000 in new deposits today and new clients.
Well, statistically we ALL know that 98% of all traders blow out and lose every penny in their accounts true? Even experiences ones that have read every book, been to ever siminar, bought every EA, programmed EA’s, used every system, every discipline, etc… like me.
So knowing that 98% of my clients will eventually lose all their money and never have a need to ask for a withdrawal….
…WHY then would I place 98% of my clients money in the market to be lost?
Why don’t I just subsidize their trading until their accounts are down to ZERO??
In other words, i can subsidize your account, and never place your money in the market… I just keep it all.
…all the while you think you are trading with real money in your account….
..but all i need to do as a broker is subsidize your account with digital numbers on your computer screen.
Now if by some chance you happen to be in the 2% that make money… only 10% of those will actually withdraw money.
All i need to do is take from my pile of money here and pay you no problem.
Anyhow, there you go.
I read all those posts and thank you so much guys for enlighting the public.
I have a question and saw that is was asked a couple of times but never answered…
So, is OANDA good broker?
Yeah normaldude that doesn’t surprise me. Trust me when I say that liteforex is not the only broker that does this. I’ve had up to 10 requotes with IBFX for example, 5 with FXDD.
I wonder about the video though, did that person try to open a position during a time of high volatility (like before/after NFP, or any other important news release)??
23:43 GMT? no news release 😉
I must’ve missed that part of the video where it showed the server time.
Once again, another reason why everyone should be trading with an ECN broker once they’re consistently profitable.
Infinit: Sorry I missed your question. From what I hear Oanda is one of the better dealing desk brokers out there. They’re ok I guess if you’re a small trader and are still learning, but once you become a “pro” I would strongly suggest you jump on to an ECN broker. See my “Forex Brokers” link at the top for some good ones that I recommend.
I realize that some ECN’s have the capacity to ‘bridge’ from their trading platform to Metatrader. But without using a bridge method, is it possible to run Metatrader on a demo account (in order to use various MT-based indicators) yet when it comes time to make the trade the trade is carried out on the ECN’s platforms? In other words, having the ECN software running for the trading but using Metatrader on a demo account for the setups. Or would this approach be ineffective due to demo account cheating on the part of non-ECN brokers?
Of course you can Abu. That’s what I’m doing at the moment. As long as you don’t execute any trades on the MT4 broker’s account then technically you don’t expose them to risk so I see no reason for them to muck around with your positions. Most brokers try to give you the best demo experience anyways in order to entire you into opening a live account.
The only disadvantage to doing things this way is the lag between identifying a possible trade setup on the MT4 platform and opening the position on the ECN platform. Typically though this should not be a problem unless you’re a scalper.
Also I’m thinking the difference in price feed may cause slight differences in the performance of your particular indicator/EA depending on what demo MT4 broker you use – some filter their price feed! So keep this in mind and basically try many demo MT4 brokers until you find one that works best.
Hope this helps you out Abu.
I’m on my way out of Alpari due to the very very high levels of re-quoting. This is my second time with them due to the lack of UK based brokers. I’m UK based and for ease of money movement I use UK brokers. Even if you have a small account you will lose out with them. I had a tiny trade going on and by the time I got out of it, I’d lost 75% of its value due to invalid prices. It wasn’t even moving that fast. (btw I trade 1M. I’ve noticed that in the last month or so their level of re-quoting has risen dramatically. They also have a problem running some templates/indicators that work perfectly well (maybe too well) on the demo but when you come to the live account they freeze and you can’t even move the chart. I’ve just lost a day and a half over this issue and have had enough. I also know from a loss experience, they will do anything they can to make money off your loss – never forget, they’re in it against you – it’s a money making business!
Of course Pat! All dealing desk broker do NOT have your best interest at heart. They do not want you to win the MAJORITY of the time.
I too used to trade with Alpari UK but have long since dumped them. Now in your case the problem is that there aren’t any ECN brokers offering the MT4 platform that are UK based.
Have you looked into FXCM perhaps? I do know they have a UK branch. Also have you looked into a non-MT4 platform/broker such as Dukascopy? The problem with Dukascopy though is that the minimum account size is rather large for most people. They’re not UK based (Switzerland) but being within the EU area may make it easy for you to move money in/out.
FXCM – http://www.fxcm.co.uk
Dukascopy – http://www.dukascopy.com/ibentry.php?ibref=415
There are two US BASED ECN brokers that offer the MT4 platform, but I’m not sure this is what you’re looking for (ease of money movement as you said).
i alrady have an alpari account and i loose $3500 by this type of cheating please gide me to get a genune forex broker please specify some one of them,it wii helpfull to me
Sorry to hear that. Hmm, well, what you want in order to prevent this from happening again is to trade with a broker that has NO DEALING DESK. Preferrably a good ECN broker would be best, but you can get by with a broker that uses STP (which means they just forward your position to their liquidity provider hence not having a financial incentive and interest to mess around with your positions by trading against you)
See the Forex Brokers link at the top of this blog for a list of some broker that I think you should look into.
Some may disagree with me but I think the 3 main ECN brokers worth looking into are:
1) Dukascopy – http://www.dukascopy.com/ibentry.php?ibref=415
2) ATC Brokers – http://www.atcbrokers.com/index_forexpro.htm
3) MB Trading – http://forexnirvana.mbtrading.com/
Dukascopy just lowered their minimum deposit to $5000, so I’d recommend you try them first, and if you don’t like them for whatever reason, go for ATC Brokers.
Do you need MT4 support? If so skip Dukascopy for now.
Hope this helps.
Thanks for your site pointing out my clearly stand about forex brokers cheat against traders.before visiting your site I have lost some reasonable amount although i could not trace the problem with my method.I am hoping to build up my little fund with Alpari before switching over to ECN .
You’re welcome Charles. To be fair to the brokers though not all of them use this plugin or are as bad as some of us traders say. BUT let’s not forget that ALL dealing desk brokers have a financial interest to see you LOSE because they take the OPPOSITE side of your trade.
And man do they profit from inexperienced traders!
Yes good idea. Find yourself a good ECN/No dealing desk broker and get your “pip on”..lol
After reading all traders comments and beginners there should be a law set against all those brokers and brokerage companies not executing the trading accounts in the most honest way they should be banned closed as one,next jailed them too.They are thieves.My wish is this should change and done we traders need to unite and form a worldwide stand to this.bottom line trades need to be clean and pure.
I hear you Stanley. Bear in mind that not all broker are like this. But what often ends up happening is that the lure of money is too great and thus most brokers adopt a “trading desk” trading structure, which means they trade against you. So it would be best to stay away from these brokers and trade with ECN/STP brokers only.
Please can you tell me which broker/s you have had a good experience with trading an ea on a live account.
FXDD and MB Trading 🙂
A fair(!) market should be a zero-sum game, right? So how can a OTC broker make a net profit on the long run without playing unfair? I think he can’t because of it’s business model.
So that’s why I think you should use a broker with a intermediator function like UBS, JP Morgan or Deutsche Bank. I hope this makes sense.
Yes Jim, that would be ideal. A broker should make profit on the volume you trade, and this profit would be paid for by their liquidity provider(s) – ie the bank(s) they deal with for this liquidity. That’s why ideally you want to be trading with a broker that uses the STP (straight trough processing) business model, which means they forward your position directly their upstream liquidity provider(s) – ie once again their bank(s).
Altenatively you can trade with a ECN broker essentially acts like a sort of equivalent of a stock exchange where a bunch of traders come to trade with each other. ECN and STP are terms often confused by traders and often even brokers. Often you hear STP brokers describe themselves as ECN brokers, when in fact they are not. ECNs are fewer in numbers and not typically have much higher minimum deposit requirements.
Example of ECN brokers include: Dukascopy, FXAll, Currenex, MB Trading.
Typically with ECN brokers you pay a commission per round lot turn. Although if you calculate it often this commission is lower than what you would otherwise pay at dealing desk brokers in pips.
Also some of these ECN brokers have rather huge requirements for you to trade on their platform but if you do then rest assured that you’re getting access to some massive amounts of liquidity and the spreads will be very very tight.
As a experienced trader in other products but a relative newby to forex I’ve found out that even with some Googling it’s pretty hard to get objective & useful (read: noncommercial) background info about the forex market, apart from the forums which are full of blabla most of the times.
This observation made me a bit reserved if it’s wise to continue the development of an custom EA and start trading with real money on the table. Regarding those ECN brokers, after checking their websites I see only MB Trading and Dukascopy support MT4 (the last one only in beta mode). Do you have experiences with MT4 via MB Trading?
Thanks for sharing.
Yes, actually I have a live account with them. I haven’t’ had any problems on their live platform. The only downside is that MB Trading is a US based broker and I’m afraid eventually the CFTC will force them to adopt the new max 50:1 leverage. I use this account to test EAs and I’m afraid 50:1 leverage is not enough for me to safely test EAs with a small starting balance.
I hope Dukascopy come out with their MT4 platform offering soon, and I also hope the minimum deposit won’t be ridiculously high – $1000 sound about right for me. But, we shall see.
I worked with a broker in the US and was not satisfied.
My account was connected to a trading system developed in Europe, and due to misunderstanding, I lost thousands of dollars.
I prefer Developing my own programs.
Thanks for great advice bro ^^
Here is my case n am a noob here but ….did digots of info.
Im not sure if my case consider as Stop Hunting..
Case: When I install my 2nd MT4 Platform(different broker) into my laptop, this thing happen when i trade – Double Execution!
At d beginning of 2nd trade when SELL, it did happen with different leverage, i go for 0:10 but d another one seems to be 0:20. I thought it was my technical faults at first but it already happened a few times now. It happened only when d trend is against me. Though they had calculated a gd outcome and activates it when Im on d wrong side.
If i had set wrongly on Pending mode, won’t it just activate once and not all d time? cos i always execute Instant Execution and not Pending.
Perhaps i should video d process down whenever i trade.
Hope bro you may enlighten me in this case, Thank you.
Man do I have some proof for you and the world; although I will probably be posting it on my own site, this is only because I am purposefully targeting them and want to be sure no one else goes through what we went through when we tried them out.
You know, the craziest thing about forex (to me anyway); is that 9 times out of 10 I can beat the hell out of calling the currencies (I mean who can’t); but this is hard enough to do, but having to beat the broker/market maker (who – and many don’t know this – IT IS IN FACT AGAINST THE LAW FOR THEM TO TRADE AGAINST YOU – then again maybe they do know this – but my run own sentence is headed for one hell of a rampage that you will be seeing very soon.
I plan on suing the ever living hell out of them; on top of any sanctions the two NFA and CFFA (or ???ever it was/is) that regulates them, so I want to be very careful in how I do this;;;;;; BUT
Ever since I have been trading, I have had Spector Pro running – a nice little recordign program that has been capturing the cheating bastards (IMO – hell – as seen on VIDEO) – but make no mistake about it; they not only cheat, they have no quams about taking it as far and as long and as dirty as they can go.
I found a way to beat every cheat but this one.
When and when not they turn on an applet that will reverse the results – which in turn – has you sitting them busting your but for them. Seriously, this is my latest one and last night I captured about a 15 hours worth of trades – and have the evidence to bury them. It’s is going to smell so bad you will have to thrown away your computer.
It’s plain and clear as day and is amazing. Talk about class action suit – here it comes – and apparently I may have to lead the charge (unless someone else has it going).
I figure this can be Fed, since it’s wire fraud; which eliminates arbitration I believe.
We will see and good luck with your site.
PS> If none of this makes any sense then it is because I have been up for two days – just fyi.
lol it makes sense…trust me I know how dealing desk brokers operate. They are to be avoided at all costs.
Hey share the videos and the spector pro data 🙂 I’d really like to see again just how badly they rape the price feed and their traders.
You dont know what you are talking about. Think twice before posting this bs.
Thank twice before you post your bs comment. If you clearly did know what you were talking about you’d back it up with something instead of making ad hominem attacks.
After reading this blog, I confirmed beliefs I had for a long time.
I always asked to myself: why forex trading was opened for the retail investor?
I think that nobody may think is to “help” small investors.
So what is the obvious answer?. Simple, to create a new way to take away money from the little guy
What do you think?
The way I see it there are two ways that the little guy can get screwed by the retail forex business
1) Dealing desk brokers who outright steal from customers
2) Non cheating brokers who make money just because the little guy has no clue how to trade.
Let’s face it, the forex market is moved and dominated by banks and bank traders. Most retail traders just get fleeced.
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