Human stupidity?!
Sep 30, 2013 at 13:41
1,083 Views
15 Replies
Sep 30, 2013 at 13:41
Hello everyone, I wanted to pose a question to the attention of traders, but if brokers are regulated by the FSA (Financial Services Authority) why people choose non-regulated broker and then they go to complain everywhere who have lost their money, which the broker does not return the money or do not close positions in accordance with stop loss and take profit. Are really that stupid people to entrust their money to people who are advertising on the internet?
Oct 01, 2013 at 09:04
(edited Oct 01, 2013 at 09:06)
I think the minimum, traders shoud do is to avoid unregulated brokers, as eve so its open to misunderstandings. i prefere the USA regulated, even with all the limitations on my activity. 😉
not the system is importent but your experience to read the market and take the right decision to refuse enter a trade
Oct 01, 2013 at 11:52
At least with regulated broker you have a chance to complain to the above institution. But it is not that useful. If you've been tricked for like a 100$, nobody will take you seriously. The only good thing about the regulated broker is that they can be forced to pay you money that you have on the account.
Member Since Jul 26, 2013
8 posts
Oct 01, 2013 at 11:57
A lot of unregulated brokers offer attractive perks. I suppose a lot of it is due to people wanting the perks but not wanting to consider the risk. Which kinda means they aren't good traders, actually...
The other problem is that people 'feel' they've been cheated, but don't have any proof. It's just a lot better for their ego to say that they were cheated instead of realizing they didn't put the proper stops or make adequate risk assessment. Just because a broker isn't regulated it doesn't necessarily mean they are cheating: brokers often try to get some business before they go through the expense of registration.
The other problem is that people 'feel' they've been cheated, but don't have any proof. It's just a lot better for their ego to say that they were cheated instead of realizing they didn't put the proper stops or make adequate risk assessment. Just because a broker isn't regulated it doesn't necessarily mean they are cheating: brokers often try to get some business before they go through the expense of registration.
Member Since Sep 25, 2013
24 posts
Oct 07, 2013 at 12:07
I think nowadays the regulated broker is not yet a 100% protection against the scammers. Brokers are looking for more and more ways ways to make profit. So what I would really concern about is the broker's reputation.
Oct 07, 2013 at 20:11
regulacion is bullshit. you paid regulation in spread. broker must paid! regulation = big spread. best spread offer have unregulated broker.
regulation not support small traders, meabe 50 000 usd +. but for small trader not have time.
97% traders problem is no broker problem. traders not read condition. open ecn account, here is slippage normal, and says scaaaaam, scaaaaam. many traders not understand how to work market.
only says: MM broker is bad, ecn is good . and ecn have slippage and is bad.....
next problem : trading in news, not close position in friday (gap kill account), bad mm, stoploss in support area............................... best of is this : 500 usd and buy 2 lot :-D
i need profit, trade in unregulated broker. i do not have problem. 99% brokers is ok.
Regulation IS ONLY MARKETING strategy big broker. this compeny paid every month big money for many page and forum.....example : every broker have regulation, you open in 0,5 spread or in 2 pip spread? 99,9% people open in 0,5 !!!!!!
many people is partner for this broker, this broker paid big money for this partner. and this people says- you need regulation broker, go here, 2 or 3 regulation. go go go stupid trader, i need money :-D you not need this compeny.
!!!!!!!!!!!!!!!!!!!USE BRAIN PEOPLEEEEEE!!!!!!!!!!!!!!!!!!!!! USE Mathematicians. ITS SIMPLE.
regulation not support small traders, meabe 50 000 usd +. but for small trader not have time.
97% traders problem is no broker problem. traders not read condition. open ecn account, here is slippage normal, and says scaaaaam, scaaaaam. many traders not understand how to work market.
only says: MM broker is bad, ecn is good . and ecn have slippage and is bad.....
next problem : trading in news, not close position in friday (gap kill account), bad mm, stoploss in support area............................... best of is this : 500 usd and buy 2 lot :-D
i need profit, trade in unregulated broker. i do not have problem. 99% brokers is ok.
Regulation IS ONLY MARKETING strategy big broker. this compeny paid every month big money for many page and forum.....example : every broker have regulation, you open in 0,5 spread or in 2 pip spread? 99,9% people open in 0,5 !!!!!!
many people is partner for this broker, this broker paid big money for this partner. and this people says- you need regulation broker, go here, 2 or 3 regulation. go go go stupid trader, i need money :-D you not need this compeny.
!!!!!!!!!!!!!!!!!!!USE BRAIN PEOPLEEEEEE!!!!!!!!!!!!!!!!!!!!! USE Mathematicians. ITS SIMPLE.
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forex_trader_143058
Member Since Aug 06, 2013
30 posts
Oct 08, 2013 at 06:25
(edited Oct 08, 2013 at 06:33)
I think the basic question is what is the regulation good for. I think it is necessary if the broker operates from countries with developed markets. From the customer point of view it acts like a two way insurance policy. First it should guarantee best execution practice. Second it enforces segregate accounts for customers and sometimes (might be always not sure here) the protection of customer funds up to a certain amount.
Everybody should be free to decide which 'insurance level' is the most appropriate as not all regulating institutions might have the same quality.
Well and it is definitely not for free (no insurance is) but unlike @dvejn I do not believe that non regulated brokers are somehow 'cheaper', but for sure they might have lower spreads and be more attractive for smaller accounts (sub $1000). It the last case most will burn their money anyway so there is no need for any fund protection.
And S/L hunting might be an other issue highly dependent on the broker business model and of course the S/L contingent to marketvolatility and traded asset.
Everybody should be free to decide which 'insurance level' is the most appropriate as not all regulating institutions might have the same quality.
Well and it is definitely not for free (no insurance is) but unlike @dvejn I do not believe that non regulated brokers are somehow 'cheaper', but for sure they might have lower spreads and be more attractive for smaller accounts (sub $1000). It the last case most will burn their money anyway so there is no need for any fund protection.
And S/L hunting might be an other issue highly dependent on the broker business model and of course the S/L contingent to marketvolatility and traded asset.
Member Since Jul 26, 2013
8 posts
Oct 10, 2013 at 12:28
Basically, brokers are going to function like any other business: if you want to develop a successful business, you need happy return customers. So any broker that's looking to stay in the market for the long term is going to have to maintain good business practices, because otherwise they will lose clients and they will gain a bad reputation that will prevent them from getting new clients.
Of course there are differences between how customer friendly each broker will be; but the basic rule is that scams don't last long.
Of course there are differences between how customer friendly each broker will be; but the basic rule is that scams don't last long.
forex_trader_143058
Member Since Aug 06, 2013
30 posts
Oct 10, 2013 at 12:45
(edited Oct 10, 2013 at 13:01)
Danneskjold posted:
Basically, brokers are going to function like any other business: if you want to develop a successful business, you need happy return customers. So any broker that's looking to stay in the market for the long term is going to have to maintain good business practices, because otherwise they will lose clients and they will gain a bad reputation that will prevent them from getting new clients.
Of course there are differences between how customer friendly each broker will be; but the basic rule is that scams don't last long.
I doubt there is a rule for 'functioning' in all businesses across the globe. Brokerage is business of scale and in FX you compete against huge fair established institutions. It is hard to make money for a new broker, that's a fact. We might discuss how a trading desk generates income and why 'real inter bank access is slightly different thing. It is not scam, that's usual practice.
Additionally it is not about 'friendliness' , it is about fine defined stream of revenues, nothing else. Finally I mentioned the 'insurance character', it is not only the brokerage, it is about the local environment of the physical location of brokerages.
I believe there is a need to ensure fair practices and the service idea as driver of business is not good enough to me. It might be to you os you should feel free to take the brokerage of your choice.
And finally scam work sometimes long enough and history is full of scams. So I cant see the assumption that 'brokerages' per definition have guarantee fair process because they want to keep the customers as valid argument.
forex_trader_143058
Member Since Aug 06, 2013
30 posts
Oct 10, 2013 at 12:59
(edited Oct 10, 2013 at 13:30)
........
Oct 10, 2013 at 18:37
I kinda agree with both of you (Danneskjold and FXdiversified). An obvious and ridiculous scam broker won't stay long enough but a more malicious one will. Think about the dinosaur brokers, here since a while that keep aggregating huge amount of trades. Most of them got fined by the FSA / SEC..etc at least once every year for constant negative slippage for customers and other manipulation.
That's the thing about FX, foggy universe without regulation = easy to manipulate.
So I'd say follow the crowd and you won't have much to worry about.
That's the thing about FX, foggy universe without regulation = easy to manipulate.
So I'd say follow the crowd and you won't have much to worry about.
A smooth sea never made a skillful sailor.
Member Since Jul 26, 2013
8 posts
Oct 14, 2013 at 11:05
FXdiversified posted:Well, we don't want to go to extremes. I meant that more as a rule of thumb. Naturally there are less-than-scrupulous businesses that last for a long time and make a lot of money.
And finally scam work sometimes long enough and history is full of scams. So I cant see the assumption that 'brokerages' per definition have guarantee fair process because they want to keep the customers as valid argument.
Like Thalantas points out, FX is a foggy universe and there are plenty of areas that can be exploited. But in the long run, businesses that provide value to customers are the ones that are going to succeed, versus businesses that are cutting corners at the expense of customer satisfaction (frauds). But in no way does that guarantee that a broker is going to be fair. It's just an incentive.
forex_trader_143058
Member Since Aug 06, 2013
30 posts
Oct 14, 2013 at 17:12
(edited Oct 14, 2013 at 17:12)
Danneskjold posted:FXdiversified posted:Well, we don't want to go to extremes. I meant that more as a rule of thumb. Naturally there are less-than-scrupulous businesses that last for a long time and make a lot of money.
And finally scam work sometimes long enough and history is full of scams. So I cant see the assumption that 'brokerages' per definition have guarantee fair process because they want to keep the customers as valid argument.
Like Thalantas points out, FX is a foggy universe and there are plenty of areas that can be exploited. But in the long run, businesses that provide value to customers are the ones that are going to succeed, versus businesses that are cutting corners at the expense of customer satisfaction (frauds). But in no way does that guarantee that a broker is going to be fair. It's just an incentive.
look you are right no need to go to extremes. I consider FX to be an extremely clean business... to be honest. I was working in this environment for the last decade and I think it is more transparent than any other asset I know. But there are some rules.... I guess as in every business. If you know want you are doing you will be fine, if not it might get into areas you are talking about. So after all we might not disagree :-)
Member Since Jul 26, 2013
8 posts
Oct 16, 2013 at 08:33
FXdiversified posted:Most likely.
look you are right no need to go to extremes. I consider FX to be an extremely clean business... to be honest. I was working in this environment for the last decade and I think it is more transparent than any other asset I know. But there are some rules.... I guess as in every business. If you know want you are doing you will be fine, if not it might get into areas you are talking about. So after all we might not disagree :-)
I guess that it's just there's a lot of people who lose money in forex, and then whine about being scammed when they didn't take into account slippage or failed to apply proper stop losses. It's easier to cry fraud than review one's trading record. So, yeah; if you know what you're doing, you'll be fine. If. :D
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