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Is Your Forex Broker Ripping You Off?
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Is Your Forex Broker Ripping You Off?

by The MoleAugust 6, 2014

Let’s not beat about the bush. If you are a retail trader with less than $500k in account principal the odds of getting a fair deal are overwhelmingly stacked against you. And if you’re trading Forex in the United States in particular you have officially entered Wild West territory with gun slingers, snake oil salesmen, and shysters waiting behind every corner.

The situation has been getting a wee bit better in the past few years but in general Forex is still considered a marginally regulated market into which retail traders in particular are lured with unrealistic promises (courtesy of unrealistic expectations) and then instantly churned and burned to the max. Investopedia actually posted an excellent article on the subject, so I won’t waste my time regurgitating the same theme.

What To Do

Instead I will sort you out Evil Speculator style – by telling what to look out for, and then point you in the right direction. First however there’s homework for you – I need you to do the following: Call your current broker or perhaps send an email to their customer support department. This is what I want you to ask them verbatim:

Does your firm or the network you are clearing through operate a dealing desk? 

If you are unsure if you can trust them or do not have a long term relationship make sure you get the response in writing – it’s always good to have an official written response (which if need be can be forwarded to regulatory agencies). Now they are going to either answer you back with a yes or no. If they say yes then odds are pretty high that your broker is trading against you – worse yet, they may start hedging against you if you are a winning trader or close your account based on some dubious reason. Why? Because a dealing desk (or deal desk) is a fixed spread platform where the desk makes their money in the spread trading against all of their customers. This rigs the market against hapless retail traders because they aren’t seeing true market quotes. The platform can move their quote wherever they need if they want to fill the client.

Now, if they replied yes there still is a glimmer of hope – it’s possible that they are operating a Non-Dealing Desk or NDD. That can be a Straight Through Processing (STP) desk or they are part of an Electronic Communications Network (ECN). There is plenty of pertinent information about those online and Google is your friend. In either case – if they uttered either one of those three acronyms then you are good to go and there’s no need to keep reading. Go back to your charts and to banking coin (implied of course as you are reading Evil Speculator).

What, you’re still here? Well, looks like we’ve got a problem. Apparently your new best pal at Forex’R’Us who talked you into opening an account with max leverage and low minimum deposits just so happens to run a dealing desk. And that’s why they sent you a beach towel for Christmas. Unfortunately this probably means they are shaving the spread which most likely are wide enough to drive a truck through sideways. Easy to figure out – if your spread is above 1 pip on the EUR/USD then they most certainly are taking you for a ride. If they’re over 2 pips then they have a picture of you hanging on their wall. But don’t fret – it’s NO PROBLEM. Not all is lost (yet I hope) – the Mole has got you sorted.

This Is NOT A Sales Pitch

As some of you know in the past few years we have increasingly shifted our focus from trading equities into futures and in particular Forex. The reasons are a plenty but in essence Forex is where the real action is as it thwarts all stock market volume combined given a daily trading volume of over $5 Trillion (not a typo). Which is why there rarely passes a day when I do not dig up some juicy setup on the Forex side. Some of you may have been playing along just fine but given the above I bet many of you may have gotten lousy fills – or worse!

So I always wanted to fix that for you guys and thus have literally spent months researching the space and interviewing various brokers. As I was working myself down a rapidly shrinking list eliminating candidates left and right, only two firms remained standing. Both of them run a clean ship and I would personally trade with them – as a matter of fact I will and so may Scott. Of course I strongly encourage you to research either of them online and report back right here if you find any credible negative feedback. Finally, if you think this is a sale’s pitch you are dead wrong – Evil Speculator will NOT be receiving any affiliation fees or financial rewards of ANY kind by endorsing these two firms.

FWIW – by working with Evil Speculator both firms are obviously putting themselves under scrutiny. Although I cannot directly be involved if problems arise you are absolutely free to post your experiences right here – may these be positive as well as negative. Which means that if any of our readers/subscribers are being treated unfairly we will all know about it. And I don’t think any firm would want to risk the wrath of the stainless steel rats – hey that sounds like a cool title for a new book. Too bad Harry Harrison passed away a few years ago.

With that said here are the profiles of the two firms Evil Speculator is currently recommending – this of course may change in the future and if it does I will advise you all right here.

 

ATC BROKERS LTD. is a premier brokerage firm providing online trading solutions within the foreign exchange industry to clients ranging from retail traders to institutional clients. Established in the United States as an introducing broker in 2005, ATC launched its UK brokerage entity in 2014 by registering with the Financial Conduct Authority (FCA).

The information below provides an overview for US and non-US account setup, for more information please visit our website at www.atcbrokers.com (U.S. clients) or www.atcbrokers.co.uk (clients outside the U.S.).

US Clients:

  • Account opening: $5,000
  • Account deposit in: USD, EUR
  • Leverage: 50:1
  • Minimum lot size: .10 (10,000 K)
  • Decimal Pricing:  5 decimal pricing
  • Regulation: NFA
  • Seg protection: Not available in the US
  • Hedging allowed: Yes
  • Scalping allowed: Yes
  • Execution type: Institutional Pricing (ECN)
  • Trade Copier setup: Available for free for Signal providers with min client total asset of 50K.

Non US Clients:

  • Account opening: $5,000
  • Account deposit in: USD, EUR, GBP
  • Leverage: 200:1
  • Minimum lot size: .05 (5,000 K)
  • Decimal Pricing: 5 decimal pricing
  • Regulation: FCA
  • Seg protection: Yes
  • Hedging allowed: Yes
  • Scalping allowed: Yes
  • FIX connection: Yes
  • Execution type: Institutional Pricing (ECN)
  • Trade Copier setup: Available for free for Signal providers with min client total asset of 50K.
  • PAMM accounts: Available, with min client total asset of 50K.

 

VanKar Trading Corporation is a futures/forex industry brokerage group that provides unique technology and research to institutional and individual clients. We specialize in developing high performance trading software, managed futures and systems trading. We are committed to providing innovative solutions to active traders and the alternative investment community.

Our mission is to develop and offer our customers valuable trading technology with the highest level of integrity. We achieve these objectives by listening to the needs of our client’s and serving those needs through an emphasis on research and development and technology innovation whereby creating an environment in which clients can thrive.

Many futures/forex brokerages these days have become just technology providers for traders. Being an independent introducing broker we do offer many solutions workings with over ten fcm’s/dealers but Vankar first and foremost is known for our expertise with managed futures(cta’s/ cpos) and systems trading. We’ve seen/ran/helped develop  hundreds of trading strategies over the past decade.

Bid/ask spread approx.- no commissions- ECN feed:

  • USD/JPY= 0.8
  • EUR/USD = 1.0
  • GBP/USD = 1.1
  • EUR/JPY= 1.5
  • USD/CHF = 0.9

Commissions for Evil Speculator readers with futures self-directed – .80 a side plus exchange/NFA 3.92 on ES for example.

Other Services- offer hosting services next to exchange matching engines, help with development of trading strategies, professional trade desk monitoring of trading systems, block execution/ APS services, ability to convert Tradestation strategies to variety of execution feeds/clearing firms, multiple FIX/API and routing solutions.


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • Xan

    Vankar? Say that in a german accent and you might question whether that was a smart naming choice!

  • Kidd Cudi

    here’s another colorful chart for you guys to tear apart. I went long at green horizontal, with stop at red horizontal, with potential to reach pink square

  • ridingwaves

    I keep on thinking about Mole’s breadth posted a week or so back and how that plays out with the TARP buys, it seems to correlate..next 2 days will test the theory…

  • SS_JJ

    Mole, thanks for the gold setup. It is working out great.

  • RacerXX

    Another beach towel? I was hoping for a vcr..

  • HungryNewt

    Gotta say, I’m a little surprised you didn’t mention InteractiveBrokers. Is there a particular reason you excluded them?
    Spreads are tight and commissions are low. For example, ATC Brokers mentioned above has a commission of $8 per 100k notional traded. IB is $2 for the same notional, and goes lower with higher trade volume. Futures at IB are $2.02 for ES & NQ (depending on your fee structure choice).
    FWIW

  • strider

    Another advantage of fx trading in the US—you do not have to meet the $25K min for pattern day trading.

  • bdoone

    I remember it and without looking I’d bet it has been making lower highs this year as SPX was making hi/hi’s. As POMO reduced, breadth reduced & levitating on retail buying fumes…speaking of last weeks post Mole has 1900-1910 area as a volume hole which looks to have been tested and rejected today.

  • Malcolm O’Hara

    FAZ 18.50 stop 18.46

  • mugabe

    don’t think it sounds great in English either!

  • ridingwaves

    So the TARP buy is at 10:30EST, so far it correlates with SPX rise, VIX beat down but will it follow thru…It looks like SPX hit 1911 which is the edge of that hole…that will be tough to punch thru, it will need a geopolitical event to give it the volume it needs

  • Darkthirty

    big 4th…….

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    why go long at 26.0?
    definitely a support area. but sort of a “on the fence zone”.
    (I like to be long on something moving, not resting on a ledge).

    be evil and long at 25.5 (when everything is panicking) with a stop at 25.0

    or long above 26.5 after price has rested and showing a propensity for a new long run.

    my 2 grams.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb
  • bdoone

    Volume hole held below; ES hi hit 100hr sma 1922.75 (50hr sma: 1921.50)…could trade sideways until we get some ‘Putin resolution’. On that note, gotta still trade the rules but tighter stops as we’ll be the last to know if Putin withdrawals/invades and markets jump the shark either way.

  • dragan ilic

    Seems like the bearish case is dying… Long above 1923 SPX ? Definite long confirmation at 1929 SPX?

  • dragan ilic

    Yep looks like a nasty short squezee.. Follow the tape rats :)

  • AcoBrasil

    Long at the 100 SMA was much better :)

  • ridingwaves

    I agree, tomorrow pomo provides fuel for squeeze higher..

  • dragan ilic

    Sure, buts that call was a speculative… Breach on upside, espacially breach up of last 3 days bottoms is moore bullish(1923 SPX) . 1929 will seal the deal for bulls.

  • AcoBrasil

    They’re all speculative. Breaches could be fakeouts. The 100 SMA corresponded with the volume hole Mole posted earlier.

  • dragan ilic

    Trust me…breach of 1923 is playing it safe, if your are a bull. 1907-1923 is our new no mans land. Stay out if we get there

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    or, just go for a value play down below. (24.80)

    http://stockcharts.com/h-sc/ui?s=AB&p=D&yr=0&mn=5&dy=0&id=p92445312164

  • dragan ilic

    you are right…No ego shit…miss market knows best. Just follow the tape.

  • AcoBrasil

    Sorry bro. I’m not trying to get into a pissing match here. Just sharing my perspective. GL

  • dragan ilic

    of course bro…not me either. Just glad sharing thoughs with good traders..:) Have a nice day :)

  • Cravenmorehead

    Copper and Silver both setting up IP on a 480 minute chart. The 10 period regression line is starting to curl up on SI so I might take a long on a breach of the IP high

  • Cravenmorehead

    I kind of like NG long too.

  • AcoBrasil

    Most likely. ARNA is taking revenge today. Volume seems to indicate there’s some upside room in the near future.

  • BobbyLow

    WTF just happened with USD/JPY?

    I spent about 10 minutes getting rid of some malware and I just looked and see that it tanked about 60 Pips. I was back to being short again but was that out of the blue?

  • Billabong

    We don’t need to tear it apart. Is this one you’ve been following awhile? My indicators have it neutral to buy but not a strong buy yet on a rising 50 SMA. You have well defined ST support around the 100 SMA at 25.46.

  • Kidd Cudi

    if I had caught it earlier, I’d have liked to get it cheaper near 25.5 like you said. Props for suggesting a tweak that improves the specific trade.

  • http://evilspeculator.com molecool

    Always.

  • ridingwaves

    Out 2/3 of CLVS at 37.85…keeps hitting 38 and backing down, butting against downsloping in at 36.10

  • http://evilspeculator.com molecool

    That’s what you get for downloading all that free p0rn.

  • http://evilspeculator.com molecool

    Let’s not jump to conclusions please. The bearish case ain’t dead until about 1970.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    like I just said 21 hours ago, potential volatility.

    http://evilspeculator.com/?p=42691#comment-1528885862

    no one listens to the Gerb. maybe I have some street cred now? ha!

    oh wait, that was GPB/JPY. my bad. never mind.
    😉

  • http://evilspeculator.com molecool

    Ah – somebody is paying attention. Time for you to pick an avatar!

  • http://evilspeculator.com molecool

    Frankly we all need to keep each other in check. That’s one of the reasons I built this community. Nothing wrong with keeping your rat brothers on their toes as long as it’s done respectfully and productively.

  • http://evilspeculator.com molecool

    Ah – so close to a good joke. A tape rewinder would have been funnier 😉

  • http://evilspeculator.com molecool

    Damn it – I thew my back out at the gym. Embracing the pain – but I won’t let it stop me today – I’m on fire!

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    that would explain the mood swing yesterday.
    😉

  • http://evilspeculator.com molecool

    You are promoted to our resident Oracle Gerb :-)

  • http://evilspeculator.com molecool

    Hehe – he must have [accidentally] clicked on one of the exotic sections :-))

  • http://evilspeculator.com molecool

    What can I say – I live to serve you guys 😉

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    wrap it tight, keep those core muscles solid.

    http://www.physioroom.com/images/products/38841_image.jpg

  • http://evilspeculator.com molecool

    Do I need 3D glasses?

  • BobbyLow

    I think the last thing I downloaded was Firefox on Saturday. I was very careful to uncheck all the shit that they try to add on when you download anything now days. And they still managed to sneak in that fucking Conduit “Search Protect” that defaults to Bing. I uninstalled it but I’ll have to see if it comes back.

    BTW, I went back to Firefox strictly for Disqus because Chrome was becoming unstable on ES. IE wouldn’t even allow me to sign in to Disqus. Firefox is working fine. I have Windows 8 on a fairly new Laptop.

  • http://evilspeculator.com molecool

    Now seriously mate – didn’t I tell you that you need at LEAST three points to draw a line? What you’re doing is pure mental masturbation – you’re drawing lines to justify your opinion. Now breathe deeply and then delete all that crap. Then look at the chart again without bias.

  • http://evilspeculator.com molecool

    You wankers – it’s a good firm though and unlike Forex’R’Us they won’t rip you off.

  • http://evilspeculator.com molecool

    Frankly when they try to install unwanted stuff I usually opt out the entire package. It’s just not acceptable.

    All in good fun – as you know: Wer den Schaden hat, braucht für den Spott nicht zu sorgen. (the laugh is always on the loser – rough translation – the German version is a lot funnier [I know – hard to believe])

  • Darkthirty

    keep your soap on a rope…

  • dragan ilic

    Ok Mole. Viewing the tape, conclusion is that many bears(late ones) entered the market at 1923 SPX. Those postions are gettin hot and a bit stressy at the moment. Looks like first attemp from bulls to create a bottom..

  • bdoone

    Don’t see that often intraday unless event/news driven. Equities holding up for now…strange.

  • http://evilspeculator.com molecool

    Okay, let me try: Whom befalls misfortunate need not worry about mockery. Hey, that’s actually not so bad!

  • AcoBrasil

    Try Malwarebytes (free version). Great program that keeps your ecosystem clean with fast scans.

  • http://evilspeculator.com molecool

    Wrapping doesn’t do shit – I have muscles. Icing – oh yeah and painkillers for a day. Rarely take them but a hernia is when I don’t give a rat’s rectum.

  • http://evilspeculator.com molecool

    SNORT

  • ridingwaves

    I wonder if NewBx took the wheat trade yesterday….bam….Corn looks like it consolidating for move too..

  • AcoBrasil

    Thanks, I’ll see what I can find.

    I learned my 100 day-SMA lesson following your lead in the runup following the 2011 wipeout. Great site…

  • http://evilspeculator.com molecool

    Look that first stab down is usually retested – it’s not a guarantee that the bullish case is back on and neither is it a sign that the bears are running the show now. We’ll always get a bounce – the vehemence and velocity of which however decides whether the bulls can take it back. So right now we are in cash and waiting for instructions – we touched our target area. You can be long here with a stop below ES 1910 – if we breach through 1900 then most likely Soylent Red is in effect.

  • BobbyLow

    That unwanted stuff is a pain. This is why I always try to avoid any third party downloads and go directly to the source. And even then they’ll ask if you want a different Bar on top, or have Ask or Bing for search engines. But at least the reputable ones allow for a decline which I did so I’m not really sure how this Conduit thing found its way in.

  • http://evilspeculator.com molecool

    Nice – as Scott says – NOBODY uses those for some reason. It’s just a lens after all. I bet you could make the 25/50/75 whatever work. It’s just a mental framework – there is no magic potion. But as you may know by now – entries and charts do not matter really. They are just crutches that guide us through the [organized] chaos we call the markets.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    you have muscles? poor bastard.
    muscle relaxers, better than pain cover.
    http://images.medscape.com/pi/features/drugdirectory/octupdate/MDP22500.jpg

  • http://evilspeculator.com molecool

    AcoBrasil already suggested Malwarebyes – I always used Spybot Search and Destroy. But if you use it download the OLDER version on oldversion.com (I think anything up to 3.0 is okay) as the new one is bloated now as well.

  • http://evilspeculator.com molecool

    Yeah great – and 20 minutes later I’m flat on my face drooling on my keyboard.

  • captainboom

    This is one of the many reasons I use a Mac. Safari can have it’s issues, but I’ve installed the extension for DuckDuckGo, a search engine that doesn’t track you or save your results, and I’m pretty happy with it. Occasionally I have to use Firefox for browsing, but the ecosystem is much cleaner than Windows. I’ve had zero problems with malware on the Mac, and very few using Windows via Parallels.

  • http://gerb-reloaded.blogspot.com/ Gold_Gerb

    always have a fallback machine
    you’re a Pro right?
    😉

  • BobbyLow

    Exactly. This thing was in a whipsaw range on my 4 Hour for the past 3 Days and I’ve been waiting for a move in one direction or another. Fortunately, I was on the right side of this one. But these kinds of moves on this pair without Janet or her Japanese counterpart talking or something happening are kind of strange.

  • BobbyLow

    Actually I have another Laptop all setup and I also have a mini platform on my phone. I don’t consider myself a “Pro” yet just a late blooming draft pick. :)

  • BobbyLow

    Thanks Aco. I’ll look into it.

  • BobbyLow

    I’ll look into both thanks.

  • AcoBrasil

    If that doesn’t kill it, try downloading the free trial of Hitman Pro. I went through all this at my in-laws house where their systems had hundreds of issues to tangle with.

  • http://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨

    ¨°º¤ S H A K E N ¤º°¨

    ¸„ø¤º° B A K E !“°º¤ø„¸

    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • RacerXX

    I thought you were making reference to a scene in Scrooged.
    “bath towel”
    http://youtu.be/Je4QCA5KCuc