M Swing – Way of Life

I made lot of mistakes while learning to trade. Actually my forex education is not over jet and will never be really finished. Something new is to learn every day. But the more I grow, the better are my investment strategies and the less are my mistakes. At the beginning I wish I had someone who would give advice which could help me to avoid “unforced errors.” Sometimes there was someone who gave me advises but they were ill. Well these people did their best and I do not judge them. What I would like to do here is to do my best and give you the advice how to avoid mistakes I did. For that I am introducing a new feature which I call Broker Rview. From time to time I will provide you with in depth analysis of foreign currency brokers; their advantages and drawbacks.

I believe that it is of crucial importance to have right broker on your side. In other case no good system can help you. Some brokers are universally good, some universally bad, other good for scalpers and bad for fundamental traders – I will take a closer look to all features broker is offering to you and give you my opinion whether the broker is good or not.

The biggest danger while choosing broker is its liquidity. How can we check it? Unfortunately I have no good answer for you. Every company can go bankrupt and brokers are no exception. I remember having managed a 50000 CHF account with Zurich based broker named Neuimex which went bankrupt very soon. This was hard. It was not my money on stake but the customer’s who probably will never ever invest in foreign currency markets.

I cannot give you good advice whether to trust some broker or not. Just use your common sense and hope everything will be ok. Be especially aware of Swiss brokers. I often see advertisements: we are Swiss Brokers regulated by Swiss law and so on. People assume Swiss brokers are as good as Swiss banks (I did too) and invest money there. Let me tell you something: No such thing as Swiss law regulation exists in reality. To be precise: the law regulation rules are very weak. Brokers are seen as normal companies and regulated with normal law. If they are bankrupt you will never see your money again (I am waiting for them third year now).

Back to main topic: What I would like to review here is technical aspect sand quality of service which are provided by different brokers.

I would like to start with one which I know very well and services of which I was using for years. That is Forex.com

For each criteria the broker will receive points. 0 is feature not available, 1 is negative, 2 moderate, 3 good.

Forex.com General Overview:

As far as I am informed Forex.com also known as Gain cCpital is quite large payer on the scene. It is providing services for large institutional clients (do not ask me who they are – I do not know) and for small individual investors. Actually everyone can open the account there. It has two different types of account: mini and standard. The smallest amount you can start trading with is 250 USD and Standard is 2500 USD. You can trade mini lots (10000 USD) or lots (100000 USD). Leverage is 1:100 or 1:200 you can decide which to use.

Opening an account

Opening account is quite easy – actually in 1 or 2 business days you can start trading with them. I would say they receive 3 point of 3 in this case.

Providing Help

When you start working with them you would think they are excellent. They will answer on each your request and respond very quickly but when real problems emerge the solution is not found. I remember having several disputes and technical problems and I received at the beginning very standard answer and afterwards very angry responses. For that point I give 1 of 3.

Money Withdrawal

There are several methods to withdraw money from forex.com. You can fill in form very easily using online form. But you have to remember to withdraw money with same method you have deposited it (that is credit card or wire transfer). And you have to send money back to the account from which you have funded your forex.com account. Once I remember I mad a mistake. Initially I have deposited money using credit card and later wire transfer. I wanted to withdraw money back to my credit card. Nothing happened. I was waiting for several days. Being desperate I have phoned them. They told me they cannot send money using this method because I my initial transfer was wire. But why did they not communicate that matter? For how long should customer wait? because of such occurrences I give them 2 of 3 points in this criteria.

Platform usability

Is quite good. It is very easy to use. As far I am informed forex.com offers to their clients’ three different platforms: 1. web based 2. Windows platform for installation 3. Java version for java enabled computers 3. Metatrader from strategybuilderfx and semi 5. Mobile trader – a wap version.

I assume that version for Windows is main platform and others are designed for small amount of customers (like people who travel, does not have an idea what java is or are programmers and use Expert Advisors) So I only will speak about the Windows platform. The platform is the best I have ever worked with. Here I take into account design, easy to use, functions, and so on. Of course it has drawbacks. For instance, you cannot open multiple positions for the same pair or you are unable to close first positions in same pair which were opened lately. Suppose: 1. You buy EURUSD at market price. 2. later you buy EURUSD again so you have 2 lots. 3. You want to close position opened in action 2 and maintain position opened in action 1 active. It is impossible. You have to close both positions for that. But it must be said that platform is improving permanently. Still because of mentioned drawback I give 2 points of 3 to the platform.

Help while trading

There are lot of features designed to help you. From Seminars to comments and daily technical analysis everything is included. I have tested everything hoping that one of these features will work. Maybe they work but not for me. But they try and for that 2 points.

Rules of money management

That is very important point for me: the question is: can I apply rules of my money management while depositing 250 USD on the account? No, forget about it. You will receive at least 1:100 leverage and you are forced to trade 1 mina lot for each position. That means you will get bankrupt after the loss of 250 points. Either you are a perfect scalper or intraday trader or forget to invest there. I say: scalping will not work on forex.com because of spreads. But for that please see bellow criteria. Here 1 of 3.

Spreads

Not good.  You can have one of two: fixed or fractional. When I was a customer fractional spreads were highly advertised. So my next account was fractional. I have expected to receive 1 pips spread for EURUSD but have never seen that. Furthermore I have found that my account with fixed spreads was better in comparison with fractional. And personally I think 3 pips in EURUSD and 9 in GBPCHF and pairs like are too high. Nothing for scalpers. 1 of 3.

Account security

I am residing in Switzerland for a very long time. So it is no surprise that I highly value my account security. Nothing of like that exists on forex.com however they argue they have strict rules. Everyone who liked has obtained information about my account without my permission. I would write -100 in this criteria but there is no -100 so 1 of 3.

Technical Functioning

There were problems. Several times in my experience as their customer I was unable to log in to the account. This is inadmissible. 1 of 3

Total Score:

14 points of possible 27 - I do not know whether it is god or bad. We will see when I will evaluate other brokers and we will able to compare.

Next coming: Ducascopy review