I can now see what you meant. It would certainly be better to trade in a fair market through honest broker. You right on a point that FX is not fair and honest at least at this moment for retail traders. In addition most of the FX brokers are placed in the countries where they use loop wholes in a local laws so that they would not be prosecuted for their malpractices. If brokers are in a country where the laws afford to protect customers of retail FX then they include every single provision in terms and conditions in order to expressly exclude the laws in question. Therefore, each individual should check the terms very carefully as a single word substitute can make any protective provisions of law not applicable. As far as losses are concerned I applied double safe rule. If you have $5000 risk capital, then don't trade to lose all of it because that is capital you could risk, but may be say if it drops to $2500 then without any question close the account and take what is left. It would be up to each individual to decide what they should lose. But in given example you still got $2500 giving you chance to trade elsewhere or invest in some other way and so on. The issues that I had mentioned with Saxo are based on at least several month of observations and I simply could not disregard it all as a normal thing because the frequency was to often. I have more details about Saxo but will post them at later stage.
Jim, although I do generally agree with what you've written here, it should be pointed out that any security traded on margin (including stocks) can result in the loss of more than one's initial deposit.
This is much less likely in the case of stock trading, because of all the various protections. The availability and amount of margin, in a stock account, is subject to SEC restrictions requiring the broker to ascertain the trader's experience level. Stocks never get more than 2:1 overnite margin or 4:1 intraday margin, whereas FX brokers lure their fresh meat customers into using margin of up to 400:1 or 500:1, with no legal limit; and this overuse of margin guarantees failure. Stock broker promotional materials and trading policies are far more tightly regulated than in FX. Stock brokers are not allowed to run the stops of their own customers, but FX brokers can do this whenever they want, sometimes generating losses larger than the entire account. Use of margin, by the unsophisticated, is always dangerous, but the danger is far greater in FX accounts than in stock accounts. Customers of stockbrokers: some protection (more than any other market). Customers of FX brokers: virtually no protection.
Here is some more good points about Saxo. As I already said their platform is very unstable and being based on Java you could imagine for your self how it work. I am using notebook with Pentium IV with 3.02Ghz HT and 2 x 512 Ram. Even with that power my notebook crashed very often. They have this pointless dealer chat. Each time I entered a trade I kept getting so many dealer messages that were not even relevant to my trade and that always helped to freeze my notebook. I left the trade then you would get some messages but frequency, far far less than when you hold position. You can change few things on the platform but you cant disable that message facility. At least that what I was told when I asked them. So the only way to go around that to open a small account at the beginning, I think, but by the time you discover what is what I am sure closing account would be better option than downgrading. Still more to come!!!!
You people are very unfair about Saxo.I have been using them for 3 months now .I must admit that their spreads are not the best in the market but they are fair.In 3 months i have been not disconnected except once but that was my ISP.Ref prices you can trade without any problem 20mio in euro 10 in Doll/yen Doll/chf and 5 in Doll/Can.I had no requote ever and have been able to trade usually 5mio on their prices.As i have Currenex prices along i can check their prices and sometimes there is small differences like 1 pips in Doll/chf or Doll/Can.Euro prices are pretty in line with the market.As i am not trading during Far East i cannot judge their prices.So please stop accusing them as a bucket shop or shading prices etc.People who say so have no idea of what they talking about.
I have been a client of saxo for 5 years. It really is not a place for day traders, they rip you off 2-3 pips per trade by artificially widening the spread on most liquid crosses and it can go to as high as 10 pips on the exotics. So if you chose them as your broker always use limit orders unless of course you want to get ripped off. Also note that margin requirements are variable 2% during the week and 4% for week ends and for exotics it is 8/16%! This could produce some pretty unpleasant surprises for unsuspecting traders I am position trader and use fx options instead of stop loss orders. Unfortunately there are no limit orders for options so yes you always have to pay them atleast a few pips over their official spread. Avoid selling options I don't know what models they use to calculate margin requirements but option pricing and margin requirements can sometimes be weird. I have only used them for forex trading and have no idea what kind of service they offer for CFDs, futures & stock trading but based on my experience with them I dont think it would be "stellar". I am now looking for a new fx broker that is offering fx options I am consdering CFOS fx any input on them would be appreciated. I have had no problems with their platform though. I also think they are not likely to go bankrupt.
Please do not say that people dont know what they talking about. If Saxo widen the spreads then they widen them it does not take an extensive amount of intellectuality to notice that. If their platform crashes then it crashes, if it updates each time you log on then it does. And if the terms allow them to quote worst price then I highly doubt otherwise. I highly doubt 1pip difference you claiming to be truth. When I took position it used be off by 2-3 pips the moment i took position. And when I left, it is back to normal even on a times where the liquidity is known to be poor. I think Gortaur is being very generous by saying 10 pips on exotick pairs, I thing 100-150 what I used to see. Four month same things, I suppose one could say coincidence, could they?