Proposed NFA Capital Requirement

Ha - and so comes to a close my days of trading with hotspot. One of my accounts is there - and i dont care how many times FXCM tells me they dont take the oppopsite side of trades, i will never believe them. Especially if the risk disclosure on their application doesnt change and stop telling me THAT DIFFERENT CLIENTS MAY RECEIVE DIFFERENT PRICING. What a joke.

 

http://www.msnbc.msn.com/id/28931018/

 

HotSpot Getting Out of Retail FX

Yet another small forex dealer is getting out of the U.S. market. HotSpot FXr is closing down their retail fx business and selling their customers to FXCM. This would be the third forex dealer that FXCM has feasted on this month.

http://www.forexfactory.com/news.php?do=news&id=150046

The consolidation of the retail fx industry in the U.S. has dramatically accelerated in the last few weeks with ACM, ODL and now HotSpot departing.

HotSpot’s case is particularly interesting. They are owned by Knight Capital which certainly has plenty of cash to meet the $20 million requirement. But apparently their retail business isn’t large enough to justify their continuing operation.

Again, this is why a firm’s net capital number is so important. Many thought that because HotSpot was owned by Knight they didn’t need to report a lot of capital. But it turns out that Knight was not willing to fork over the money needed to keep Hotspot FXr a going concern. At the end of the day, HotSpot’s net capital number was a spot on indicator of the firm’s viability. Taking nothing else into consideration, their number gave off the impression of a firm struggling to stay afloat. So in the end is it really a surprise that their retail business sank to the bottom of the ocean?

Once again, traders should be aware of the risks you take by trading with a forex broker with net capital below $20 million. As we are seeing smaller forex brokers are liable to close up shop giving their customers very little notice. Here today, gone tomorrow.

Or in HotSpot’s case, gone in two weeks time…

 

No Justice! No Peace!

As we await the next CFTC Net Capital Report I thought I’d post some of the best trader thread titles I’ve seen on the Net’. Many an angry trader loves to lash out at their broker or adviser and there are some pretty humorous, if not over the top, thread titles detailing the woes and eccentricities of the retail fx trading public. Here are some of my favorites:

1. “GFT Forex – Nazi Paradise”
http://www.elitetrader.com/vb/showthread.php?s=&postid=2277584#post2277584

Apparently, the creator of this thread, “IShopAtPublix” has never heard of “Godwin’s Law,” which states that invoking Hitler or the Nazis in an analogy serves to discredit the person who is injecting Der Fuhrer into the conversation. So why was this trader calling out GFT for being jackbooted storm troopers? Because they asked him for a photocopy of his credit card…

“Vee Hav Vays of Making you Talk!”


2. “FX Open Scam Scum”
http://www.forexfactory.com/showthread.php?p=2443874#post2443874

Months ago I wrote about a broker war between FX Open and Poltek FX. http://www.fxstreet.com/forum/showpost.php?p=11956&postcount=140

Sadly, a tentative cease fire has appeared thus robbing the trading public of one of the most entertaining flame wars on the Internet.

Hot on the heels of this truce comes another “Peace in our Time” declaration as thread creator “Maxey” announces that he has gotten his long awaited payout of $70,000 from FX Open thus bringing a close to the volatile “Scam Scum” thread at Forex Factory.


3. “Felix with a Criminal Record (Forex Peace Army Under Government Investigation)”
http://www.trade2win.com/boards/for...governmental-investigations-5.html#post622628

The last year and a half has seen Felix Homogratus’ Peace Army under heavy scrutiny on various fly by night blogs and all over the bulletin boards. This is but one of the innumerable threads where the Peace Army does battle against its critics. In this one “Tom Harris” can be found ranting about the Peace Army being under government investigation. Mind you, no proof of such an investigation is ever presented but we are reminded that Forex Bastard’s girlfriend was thrown in the clink a year ago.

If you like the “paranoid style” this thread is for you.


4. “Patrict Sim’s (ExpertForextrader) Failed Arbitrage Strategy – Professional Scammer”
http://www.talkgold.com/forum/r245100-.html

TalkGold is one of my favorite forums and has more threads than you can shake a stick at. Granted, many of the threads are from shameless marketers selling every forex related product under the sun, but that’s what makes the forum so interesting. It is a total free for all and gives traders a wonderful bird’s eye view of the utter chaos that is the retail forex market.

In this thread a trader by the name of “patricksimbastard” excoriates the real Patrick Sim whose trading signals “patricksimbastard” doesn’t seem to care for:

I like the “professional clown” appellate. So does patricksimbastard have a case? Don’t know, but whenever I see someone claiming to have a “Holy Grail” forex trading system as Patrick Sim claims to have I make it my business to stay as far away from such “experts” as I can. Patricksimbastard should have done the same.

5. “Oanda- Add Your Scam Screens Here”
http://www.elitetrader.com/vb/showthread.php?s=&threadid=126381

81 pages and still going strong. What has Oanda done to deserve such disrespect? Well, nothing. At least nothing out of the ordinary. Bad fills are a dime a dozen in retail forex, especially if the broker you trade with is a market maker taking the other side of the trade. Yet that doesn’t stop traders like “forestgril” from declaring jihad after they get a bad fill and taking to the bulletin boards to declare a fatwa on their broker. Another poster on this thread sums up “Forestgril’s” situation perfectly:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=126381&perpage=6&pagenumber=2

Ah but nothing beats blaming your lousy trading on those rascally brokers does it? In any case Forestgril will not be denied:

Well, the best of luck to you Forestgril. You have your work cut out for you- as do all the disgruntled traders of fx world.

 

Different brokers have different ways. FXCM never asked me a photocopy of my credit card. They only care that my credit/debit card is in the same name as the account holder (no 3rd party). That is reasonable.

So STFU

 

lmao

 

Olint Was a Ponzi Scheme

Sources are telling Jamaican media outlets that David Smith’s infamous investment scheme has only $10 million in local cash on hand. In short, it has become clear that David Smith is the Bernie Madoff of Jamaica, with the exception that Smith’s Ponzi Scheme is doing far more damage to the local economy: http://www.sunheraldja.com/article/show/2177

Meanwhile, the NFA has yet to issue a ruling in regards to its complaint against I Trade FX: http://www.fxstreet.com/forum/showpost.php?p=13665&postcount=177

Smith was a formal principal at I Trade FX and while the NFA is not investigating Smith himself a ruling by the NFA could help clear up exactly what Smith has been doing with his customer’s funds all these years.

Hopefully, regulators have this case at the top of their “to do” list. It is far too important for them not to.

 

Will Russian Forex Brokers Fall along with the Ruble?

The news from Moscow has been grim recently. The fall of the Russian Ruble has policy makers mulling over some scary choices; including the imposition of stringent currency controls which could block customers from withdrawing their funds from Russian based forex brokers.

http://www.financialpost.com/news/story.html?id=1245528

The whole situation is reminiscent of the Asian Currency Crisis of 1998. A full collapse in the Ruble could not only lead to huge losses for any traders who have Ruble denominated accounts but could also destroy banks and brokerages throughout Russia who would be bankrupted when they are unable to pay back dollar denominated loans with worthless Rubles.

It is something that traders who have accounts with Russian based forex brokers (i.e. Broco Company) need to seriously take into consideration.

Russians are already dispensing with the Gallows’ Humor by quoting 19th-century writer Mikhail Saltykov-Shchedrin: "It is not a tragedy when in exchange for a ruble you get half a ruble; the tragedy is when in exchange for a ruble you get a punch in the face."

Well, too many forex traders have gotten punches in the face instead of their money back as I have detailed on this thread (and even as we speak Crown Forex is busy socking their own customers in the chin with the rage of Christian Bale on a movie set:
http://www.youtube.com/watch?v=tLXVuy0h29c)

The good news is if you are trading with a broker that offers USD/RUB all I can say is “Buy! Buy! Buy!”

 

You're kidding, right?

forexsavior is a mine of information, not to mention his entertaining writing style!

 

lol. that's ok cabletrader. If you give it out you gotta be able to take it