Why I hate Forex

[mdan]

Recently, I encountered what I would call a "shady" situation involving a Forex Broker. If you dont trade OANDA, then chances are you may have missed something very unusual. On Sunday, June 20th at around 1715 hrs. the GBPAUD spiked up approximately 1000 pips. As a result of this spike I was subsequently stopped out of four trades. Trades I had set up for about a month from now because the GBPAUD just doesn't spike like this.

First thing I did was ask other traders what they thought? "OMG" was one answer, but apart from that I had several answers in which the person "shot from the hip" so to speak. "Well, these things happen" or "probably a data problem" said a prominent OTA instructor. My point being traders who generally don't trade Forex Pairs, seem to have this defensive attitude if/when you say anything about the Brokers. We seem to forget the "Brokers" are not doing this to help us. They are there to take our money.

When I contacted OANDA, I was told they were investigating it. They later said they had an issue with all GBP pairs. But what was odd was I was also in the GBPUSD and the GBPJPY at the same time. No spikes there, at least not 1000 pips.

They did reimburse me, but I still have questions as to why and how - if as we are taught- the market truly moves on supply and demand (as well as geographical events) how and why did the market decide to do its own thing that Sunday evening? What this suggests to me is Brokers have much more lead-way then we can imagine. Why don't they do it more often? Because people would leave by the thousands. Who would trade something if they knew it was being corrupted? So the Brokers "accommodate" our trading desires.

If I had a nickel for every time someone defends the Forex Brokers when they say "nobody stop hunted you" or there is no such thing as a stop hunt" I would be rich. (Again, a defense made on behalf of people who do not exclusively trade Forex pairs) This event shows they have the ability, independently, to move the charts on their own. And because of this "license to adjust" they do not have to honor supply and demand, trendlines, or any type of TA. No centralized price means you trade what THEY offer you, not the market.

On the other hand, "what if" someone, a friend of a friend of a friend, had an order at 1.95 area and was able to ride it down? "O that can't happen" says the same person who believe Currencies are not manipulated. If the event is never investigated by the right people, then who will know either way?

What I hope to get across to the reader is the Forex Brokers can act as criminals with badges. I have often said, most of the traders who say they make all kinds of money on Forex; 1) do not exclusively trade Forex but also trade other assets or 2) sell Forex "education" or 3) sell Forex indicators. In other words their income is based on other opportunities. If there are traders who make money from Forex pairs, I would submit to you THEY do not get margin calls from trading 50-1 (thank you OANDA) and/or they have sufficient drawdown to accommodate remaining in the trade. But, for the little guys like my family, we often times watch as we get stopped out only to see the trade go in the direction we had anticipated and hit the target we also anticipated.

If they can move a market 1000 pips with not one word of criticism or ridicule or enforcement, why cant they take out trades by means of stopping us out? Someone may ask "why take out our trades?" So they can collect more and move more. It is all about the money for them. And what they cant get the first round, they will pick up shortly after that. Do we really think they are happy with moving 50, 000 when they can take another 20,000 by simply stopping us out and inheriting ours at a better price?

As I usually do, I want to end with something an acquaintance told me. He said
"A very well know futures trader told me many years ago don't trade Forex for these reasons:
1) It's a dishonest market
2) No centralized exchange
3) It's not regulated
4) If the dealer/broker goes out of business, you can lose everything in your account
3) Dealers/brokers trade against you
4) The dealer gets to see your cards (they see the complete order book and you don't). This is like playing poker with someone that gets to see your cards but you cannot see there cards."

All I can say is I cannot wait to start trading Stocks and Futures. Isn't it nice that an asset traded by someone in England has the same price as someone trading in Thailand, is the same price as someone trading in the USA? I think so. And this centralized pricing sort of helps ensure TA, supply and demand and trendlines are respected. Not so in Forex. Forex Brokers create the prices.

I attached a copy of the spike for your viewing pleasure.

 

[Vladimir Rojas]

In my opinion, it's fundamentally essential that traders always keep in mind that they must work with brokers who have a good reputation and have never been officially acused.

It's also recommended to operate with a regulated broker by any important financial regulatory authority like the Financial Conduct Authority or CySEC or another European Authority, because their strict requirements regarding financial services offered, especially in terms of equity and quality. With this we've a big part of guaranteed security.

 

[1963Falcon]

You must be your best advocator..no one will do this for you...

 

[tomorton]

Recently, I encountered what I would call a "shady" situation involving a Forex Broker. If you dont trade OANDA, then chances are you may have missed something very unusual. On Sunday, June 20th at around 1715 hrs. the GBPAUD spiked up approximately 1000 pips. As a result of this spike I was subsequently stopped out of four trades. Trades I had set up for about a month from now because the GBPAUD just doesn't spike like this.

First thing I did was ask other traders what they thought? "OMG" was one answer, but apart from that I had several answers in which the person "shot from the hip" so to speak. "Well, these things happen" or "probably a data problem" said a prominent OTA instructor. My point being traders who generally don't trade Forex Pairs, seem to have this defensive attitude if/when you say anything about the Brokers. We seem to forget the "Brokers" are not doing this to help us. They are there to take our money.

When I contacted OANDA, I was told they were investigating it. They later said they had an issue with all GBP pairs. But what was odd was I was also in the GBPUSD and the GBPJPY at the same time. No spikes there, at least not 1000 pips.

They did reimburse me, but I still have questions as to why and how - if as we are taught- the market truly moves on supply and demand (as well as geographical events) how and why did the market decide to do its own thing that Sunday evening? What this suggests to me is Brokers have much more lead-way then we can imagine. Why don't they do it more often? Because people would leave by the thousands. Who would trade something if they knew it was being corrupted? So the Brokers "accommodate" our trading desires.

If I had a nickel for every time someone defends the Forex Brokers when they say "nobody stop hunted you" or there is no such thing as a stop hunt" I would be rich. (Again, a defense made on behalf of people who do not exclusively trade Forex pairs) This event shows they have the ability, independently, to move the charts on their own. And because of this "license to adjust" they do not have to honor supply and demand, trendlines, or any type of TA. No centralized price means you trade what THEY offer you, not the market.

On the other hand, "what if" someone, a friend of a friend of a friend, had an order at 1.95 area and was able to ride it down? "O that can't happen" says the same person who believe Currencies are not manipulated. If the event is never investigated by the right people, then who will know either way?

What I hope to get across to the reader is the Forex Brokers can act as criminals with badges. I have often said, most of the traders who say they make all kinds of money on Forex; 1) do not exclusively trade Forex but also trade other assets or 2) sell Forex "education" or 3) sell Forex indicators. In other words their income is based on other opportunities. If there are traders who make money from Forex pairs, I would submit to you THEY do not get margin calls from trading 50-1 (thank you OANDA) and/or they have sufficient drawdown to accommodate remaining in the trade. But, for the little guys like my family, we often times watch as we get stopped out only to see the trade go in the direction we had anticipated and hit the target we also anticipated.

If they can move a market 1000 pips with not one word of criticism or ridicule or enforcement, why cant they take out trades by means of stopping us out? Someone may ask "why take out our trades?" So they can collect more and move more. It is all about the money for them. And what they cant get the first round, they will pick up shortly after that. Do we really think they are happy with moving 50, 000 when they can take another 20,000 by simply stopping us out and inheriting ours at a better price?

As I usually do, I want to end with something an acquaintance told me. He said
"A very well know futures trader told me many years ago don't trade Forex for these reasons:
1) It's a dishonest market
2) No centralized exchange
3) It's not regulated
4) If the dealer/broker goes out of business, you can lose everything in your account
3) Dealers/brokers trade against you
4) The dealer gets to see your cards (they see the complete order book and you don't). This is like playing poker with someone that gets to see your cards but you cannot see there cards."

All I can say is I cannot wait to start trading Stocks and Futures. Isn't it nice that an asset traded by someone in England has the same price as someone trading in Thailand, is the same price as someone trading in the USA? I think so. And this centralized pricing sort of helps ensure TA, supply and demand and trendlines are respected. Not so in Forex. Forex Brokers create the prices.

I attached a copy of the spike for your viewing pleasure.

My charts for 20/06 don't show a GBP/AUD 1000 pips spike. Oanda reimbursed your capital. Both these things suggest this spike was an Oanda data error.

This says nothing about the currency markets. Actually, mpst private retail traders are not engage din the currency markets at all, they are simply trading with their broker, so centralised exchange pricing and control is irrelevant.

As far as the private retail trader sector of the financial services industry is concerned, your experience shows that Oanda readily held up their hand when something went wrong at their end and they made good client costs incurred. This is rather positive for their customer service.

Your conclusions on the forex market are not justified by your experience with Oanda.

The CEO of a UK spreadbetting firm that I was using once said in a Youtube clip that it was not worth them trying to illegally cheat their clients out of profits because it would be impossible to conceal this - from their employees. He stated that as soon as there was the next round of redundancies in the firm, the sacked employees would be straight round to the regulator to spill the beans and the game would be up. Stop-hunting therefore would be a losing game for the broker.

 

[trilobite]

My charts for 20/06 don't show a GBP/AUD 1000 pips spike. Oanda reimbursed your capital. Both these things suggest this spike was an Oanda data error.

This says nothing about the currency markets. Actually, mpst private retail traders are not engage din the currency markets at all, they are simply trading with their broker, so centralised exchange pricing and control is irrelevant.

As far as the private retail trader sector of the financial services industry is concerned, your experience shows that Oanda readily held up their hand when something went wrong at their end and they made good client costs incurred. This is rather positive for their customer service.

Your conclusions on the forex market are not justified by your experience with Oanda.

The CEO of a UK spreadbetting firm that I was using once said in a Youtube clip that it was not worth them trying to illegally cheat their clients out of profits because it would be impossible to conceal this - from their employees. He stated that as soon as there was the next round of redundancies in the firm, the sacked employees would be straight round to the regulator to spill the beans and the game would be up. Stop-hunting therefore would be a losing game for the broker.

I've never had an issue with SB brokers in the UK. In fact on one trade where I had big slippage they amended the price after I queried it and saved me a packet. When I looked back at the trade with hindsight it was slipped when held through big news, so it was probably correct, and due to my inexperience. I guess they gave me the benefit of the doubt to keep a customer, as I had a fairly large account there. And as you say, it didn't really cost them anything as you are not trading in the real market.

 

[ffsear]

Its clearly just a platform error, rather then an attempt at manipulation.

 

[hatemypips]

Recently, I encountered what I would call a "shady" situation involving a Forex Broker. If you dont trade OANDA, then chances are you may have missed something very unusual. On Sunday, June 20th at around 1715 hrs. the GBPAUD spiked up approximately 1000 pips. As a result of this spike I was subsequently stopped out of four trades. Trades I had set up for about a month from now because the GBPAUD just doesn't spike like this.

First thing I did was ask other traders what they thought? "OMG" was one answer, but apart from that I had several answers in which the person "shot from the hip" so to speak. "Well, these things happen" or "probably a data problem" said a prominent OTA instructor. My point being traders who generally don't trade Forex Pairs, seem to have this defensive attitude if/when you say anything about the Brokers. We seem to forget the "Brokers" are not doing this to help us. They are there to take our money.

When I contacted OANDA, I was told they were investigating it. They later said they had an issue with all GBP pairs. But what was odd was I was also in the GBPUSD and the GBPJPY at the same time. No spikes there, at least not 1000 pips.

They did reimburse me, but I still have questions as to why and how - if as we are taught- the market truly moves on supply and demand (as well as geographical events) how and why did the market decide to do its own thing that Sunday evening? What this suggests to me is Brokers have much more lead-way then we can imagine. Why don't they do it more often? Because people would leave by the thousands. Who would trade something if they knew it was being corrupted? So the Brokers "accommodate" our trading desires.

If I had a nickel for every time someone defends the Forex Brokers when they say "nobody stop hunted you" or there is no such thing as a stop hunt" I would be rich. (Again, a defense made on behalf of people who do not exclusively trade Forex pairs) This event shows they have the ability, independently, to move the charts on their own. And because of this "license to adjust" they do not have to honor supply and demand, trendlines, or any type of TA. No centralized price means you trade what THEY offer you, not the market.

On the other hand, "what if" someone, a friend of a friend of a friend, had an order at 1.95 area and was able to ride it down? "O that can't happen" says the same person who believe Currencies are not manipulated. If the event is never investigated by the right people, then who will know either way?

What I hope to get across to the reader is the Forex Brokers can act as criminals with badges. I have often said, most of the traders who say they make all kinds of money on Forex; 1) do not exclusively trade Forex but also trade other assets or 2) sell Forex "education" or 3) sell Forex indicators. In other words their income is based on other opportunities. If there are traders who make money from Forex pairs, I would submit to you THEY do not get margin calls from trading 50-1 (thank you OANDA) and/or they have sufficient drawdown to accommodate remaining in the trade. But, for the little guys like my family, we often times watch as we get stopped out only to see the trade go in the direction we had anticipated and hit the target we also anticipated.

If they can move a market 1000 pips with not one word of criticism or ridicule or enforcement, why cant they take out trades by means of stopping us out? Someone may ask "why take out our trades?" So they can collect more and move more. It is all about the money for them. And what they cant get the first round, they will pick up shortly after that. Do we really think they are happy with moving 50, 000 when they can take another 20,000 by simply stopping us out and inheriting ours at a better price?

As I usually do, I want to end with something an acquaintance told me. He said
"A very well know futures trader told me many years ago don't trade Forex for these reasons:
1) It's a dishonest market
2) No centralized exchange
3) It's not regulated
4) If the dealer/broker goes out of business, you can lose everything in your account
3) Dealers/brokers trade against you
4) The dealer gets to see your cards (they see the complete order book and you don't). This is like playing poker with someone that gets to see your cards but you cannot see there cards."

All I can say is I cannot wait to start trading Stocks and Futures. Isn't it nice that an asset traded by someone in England has the same price as someone trading in Thailand, is the same price as someone trading in the USA? I think so. And this centralized pricing sort of helps ensure TA, supply and demand and trendlines are respected. Not so in Forex. Forex Brokers create the prices.

I attached a copy of the spike for your viewing pleasure.

If it happens too often then you should avoid this broker but if they reimbursed you they acknowledge that it was a glitch. So what's the problem then? Especially it was Sunday low liquidity conditions sometimes lead to unpredictable outcomes so its wise to avoid them.

 

[progix]

Its clearly just a platform error, rather then an attempt at manipulation.

Agreed as there are certain market conditions where there also comes slippage which is also not from the brokers part i guess however we have to trade on as it is basis.

 

[leealwin]

Oanda had system problems, I refuse to believe how everyone is shady. Keep browsing, there are still hope for good retail broker houses, do not give up yet.

 

[Henow1969]

Always do some research before selecting a good broker. Do not trade with an unpopular and untrusted broker. Always read reviews about different brokers on different reviews sites and select a broker which has a good reputation.

 

[HeavLeighGill]

There are definitely a lot of scammers out there. I see a lot of people hyping up some of the big name brokers (like Oanda, XM, etc.) but then you turn around and see a lot of complaints about system problems, customer service, and other issues. Then again, it may seem as though there are more complaints for those brokers because more people sign up so we just don't hear about shortcomings with others as often. I think broker manipulation is possible but probably only responsible a small percentage of the time. Your problem sounds valid and it may be a good idea to switch brokers at this point.

 

[Journo1234]

I'm a journalist that is currently looking into claims of people being 'scammed' by certain trading companies, and I'm looking for someone that could potentially talk to me about this. Has anyone had any experience with starting up with SOFX, and if so would you be willing to speak more about your experience? Thanks in advance.

 

[Smith2525]

Not a fan of that broker anymore either. Leverage sucks

 

[Farm Yard Forex]

It certainly appears to be a broker data issue rather than a market issue as it is shown on Trading View for Oanda but not FXCM. Also it appears to have occured on market open that week. The positive is that you got your money back but this wasn't a stop hunt by the broker. I believe this is done by central banks daily on large hedge funds and can be seen across all broker feeds rather than a random spike like this.

 

[Smith2525]

Great explanation here mate

 

[mdan]

My charts for 20/06 don't show a GBP/AUD 1000 pips spike. Oanda reimbursed your capital. Both these things suggest this spike was an Oanda data error.

This says nothing about the currency markets. Actually, mpst private retail traders are not engage din the currency markets at all, they are simply trading with their broker, so centralised exchange pricing and control is irrelevant.

As far as the private retail trader sector of the financial services industry is concerned, your experience shows that Oanda readily held up their hand when something went wrong at their end and they made good client costs incurred. This is rather positive for their customer service.

Your conclusions on the forex market are not justified by your experience with Oanda.

The CEO of a UK spreadbetting firm that I was using once said in a Youtube clip that it was not worth them trying to illegally cheat their clients out of profits because it would be impossible to conceal this - from their employees. He stated that as soon as there was the next round of redundancies in the firm, the sacked employees would be straight round to the regulator to spill the beans and the game would be up. Stop-hunting therefore would be a losing game for the broker

tomorton

You didnt respond to the issues. My guess is you are either affiliated with Forex education, or you are an affiliate who receives kickback from pushing Brokers, or you sell indicators for Forex. I hardly doubt you are just a simple trader going to bat for them. Just because OandA reimbursed me does not mean there was no foul play. Maybe they thought it was best to take care of the matter before I escalated what could be an internal issue that should not get out to the general public? I posted the proof whether you saw it or not. I thought I made it clear it was an OandA issue and not Forex Brokerages at large.

Data Error? Surely you jest. Do you work for them? Or you know this how? Nobody was talking about Retail Traders. The point was directed toward FOREX BROKERS. Redirecting the issue does not make it go away. You dismissed the point of the Forex Market being decentralized. It IS relevant because there is no control over what the price should be. This speaks of integrity and a lack of professionalism on behalf of Brokers. I suppose you would agree that Stocks should also have no centralized pricing? It is ok to pay 600 dollars, 605 dollars, 610 dollars for Apple Stock, depending upon which Broker you go to? What about Futures? The price of Hogs is determined by the Broker and not the output for the Farmer? The point of my remarks was not for people like you, but rather others who want to save themselves alot of money and heartache. If someone is going to trade, they would be better off trading Stocks or Futures. Finally, the fact that you disagree with stop hunting shows ignorance of how the market works. I would refer others to read the articles done by the gentleman at Price Action Ninja. Many have been grateful for his material. https://www.priceactionninja.com/7-price-action-secrets-the-banks-dont-want-you-to-know/

 

[tomorton]

tomorton

You didnt respond to the issues. My guess is you are either affiliated with Forex education, or you are an affiliate who receives kickback from pushing Brokers, or you sell indicators for Forex. I hardly doubt you are just a simple trader going to bat for them. Just because OandA reimbursed me does not mean there was no foul play. Maybe they thought it was best to take care of the matter before I escalated what could be an internal issue that should not get out to the general public? I posted the proof whether you saw it or not. I thought I made it clear it was an OandA issue and not Forex Brokerages at large.

Data Error? Surely you jest. Do you work for them? Or you know this how? Nobody was talking about Retail Traders. The point was directed toward FOREX BROKERS. Redirecting the issue does not make it go away. You dismissed the point of the Forex Market being decentralized. It IS relevant because there is no control over what the price should be. This speaks of integrity and a lack of professionalism on behalf of Brokers. I suppose you would agree that Stocks should also have no centralized pricing? It is ok to pay 600 dollars, 605 dollars, 610 dollars for Apple Stock, depending upon which Broker you go to? What about Futures? The price of Hogs is determined by the Broker and not the output for the Farmer? The point of my remarks was not for people like you, but rather others who want to save themselves alot of money and heartache. If someone is going to trade, they would be better off trading Stocks or Futures. Finally, the fact that you disagree with stop hunting shows ignorance of how the market works. I would refer others to read the articles done by the gentleman at Price Action Ninja. Many have been grateful for his material. https://www.priceactionninja.com/7-price-action-secrets-the-banks-dont-want-you-to-know/

I don't work for Oanda or any broker or any trainer or any company in the financial sector. I never have. I'm not involved in training or mentoring or any services to traders.

Good luck with your trading.

 

[sharabela]

I am very sorry to see that happened with you. It is one of the vital things that we go with solid broker. Do a good search on the internet and invest with one of them that is well reputed. I am wishing you all the very best.

 

[dusktrader]

I will say that I've recently (in last 2-3 months) seen this same (or similar) issue in the Oanda feed linked to my TradingView account (which I do place live orders from). In these cases, I was only trading on demo accounts but since I saw the issue more than once, I started looking for it. It seemed to always happen on Sundays after the market opened, but not right away immediately, like after a few minutes.

The issue I remember is that an extreme price bar occurred, about 1000 pips wide when I was able to measure one of them. A bar of this size would essentially wipe out all trades in all directions I think. In at least one case, I remembered to go back and look a few days after it happened - and it was not found. So that does fit the definition of "data error" but I'm also curious how it could happen in the first place.

Also, unsure exactly which pair(s) I saw this on, but I know it was a minor cross pair.

 

[McQuant]

i traded with oanda about a dozen years ago.. we were paying $600/month for their api, which is riddled with bugs.. it would throw unhandled exceptions once every 24 hours, even if i were to run a simple program that only reads a single price of eurusd once every five minutes.. i used both their linux and windows api, and both produced numerous errors.. it produced errors like it would just start returning spurious prices for no reason at all.

also, one time i had a short trade on a live account... with a fifty pip take profit... i stared at the screen during the entire trade... it slowly creeped down to the take profit price... it knocked out the takeprofit, but it didnt close my trade at the take profit, ffs.. the price jumped up hard to about fifty pips above my entry and closed my traded at a fifty pip loss,, even tho NO OTHER BROKER SHOWED SUCH A SPIKE.. and then the price immediately shot back down to where the takeprofit was...

oanda is pure nonsense.

one time i was using their api... and they wrote me and asked me to not query the prices more often that once every five minutes... omg.. you are supposed to be able to query prices nonstop...

you can do it with metatrader and all is good, but michael stumm computer science professor who claims to be high speed trading bla bla says not to query the price but once every five minutes.

pure garb.

If you need API connection check Open API and FIX , both available with Spotware's cTrader. The second option is JForex API by Dukascopy. Also, FXCM API is quite a reasonable way to go for algo trading.
All APIs mentioned above allows you to bypass the trading platform and connect to the broker's server directly.
For MT4 and MT5 it's also possible but the price for the libraries is quite high.