Fraudulent brokerages use various techniques to rob their clients’ cash and some techniques can be delicate enough that they could hide behind legitimate reasons to justify such acts. When your brokerage keeps stalling your withdrawal or confiscate your profits without valid reason, you can be sure that it is a dishonest brokerage. Nevertheless, if they’re using subtle techniques, you must learn to recognize those practices.
Pip Hunting Policies
“Pip hunting” is a term to indicate short term trading strategies, particularly scalping. Typically, they eliminate this type of trading strategies by placing policies on “minimum time” a trader have to keep his position. Any attempt to close the trade before the “minimum time” passed could lead to cancellation of the trade and confiscation of revenue produced in that trade.
Realize that these rules might be hidden between tons of rules on the contract and you won’t be told specifically concerning this during registration. If you violate these rules, the broker can terminate your trade and have every legal reason to do so.
Scalping – when performed correctly – is so effective that a number of brokers decide to ban it. The same can be said for forex robot using and why it’s banned in several brokerages. Check out the best Eas today on best forex robot.
Re-quotes
In a volatile market, it’s possible for prices to move so quick that when you’re entering your order the prices already changed. Thus, your trading platform will cease the order you just gave and provide you with a new price, then ask if you’ll place the order at the new price. This is known as requotes and it’s common to happen while in erratic market.
However, fraudulent brokers have used this as an instrument to stop trader to enter the market at good prices. They just cancel the order, then provide the trader a worse price. You have to watch the requotes frequency; if it takes place too often, then there is high possibility that your broker is the one driving it.
Getting a broker with no requotes policy is an excellent solution. Just be sure you ensure that the broker uses instant execution type considering that market execution will only get your order carried out on the “next best price”. Have a look at the details of an advised broker with instant execution and no requotes policy at Trading Point details.
Slippage
Slippage, just like requotes, is possible to take place during exceptionally volatile market condition. During such condition, the trading platform might fail to execute pre-defined orders (like take profit or stop loss) on the requested prices. Rather, the orders are filled later; almost certainly in worse prices.
Although this is normal to occurs during volatile market, extreme slippage isn’t tolerable. Unethical brokerages use slippage as their justification to ignore stop-loss order, therefore making you suffer more loss than you designed in your risk management.
Scam brokers never let your money to be used for real trading; instead they just making sure that you lose most of your trades and have legitimate reason to keep your money. Being trading by their rules and utilizing their trading platform, tackling your trades is not a difficult thing to perform for them. Once you recognize these symptoms of scam brokers, it’s better to withdraw all your fund as quickly as possible. Be sure to never end up in their hand by reading through how to choose an online broker.
