So I’m looking for a broker and I stumbled upon 4xp.com
They’re offering some pretty sweet bonuses (up to 50% on your initial deposit) does anyone have any experience with them? They say that’re ECN
Check the terms and conditions. 50% bonus normally comes with some hefty trading requirements.
I would be wary of a broker who has bonuses past 10%… You should be drawing enough clients from the quality of services and reputation rather then gimmicks.
I don’t have any experience with 4xp but avafx broker also offers 50 percent bonus with initial deposit.
deposit bonuses smell fishy to me
they get the money from somewhere, it’s never free cash
they either encourage you to over-trade or are betting against you
I don’t know about 50% bonus but I think Instaforex is the very good broker you may have a look on it.
Instaforex has been marked as fraud on some sites
When i see 50% bonus - i know that i can’t take it in cash or can withdraw it when i want, so it is better for me to fund my money with minimum restrictions and of course with minimum bonuses :(.
50% deposit bonuses normally come with trade 1 lot per $1 of the bonus. Of course that is a huge amount to trade, and is 0.1 pips with a whole lot. They give away that as commission to affiliates so its just another way to get customers. I wouldn’t see it as a scam, just there’s not much point to it.
Ok, even though your question was specifically about 4xp and what they are like, whilst we’re at it let’s address the whole bonus thing in general.
Market makers will make money from spread and client losses if they B-book them (by the way, nothing wrong in principal, just that many feel it leaves a sour taste to know your broker is making money from your “losses” and also it helps to fuel the “my broker scammed me” paranoia). When they give you a bonus, it doesn’t really affect them much because all it is essentially is trading credit. Seeing as many newbies will lose their funds at some stage, and to a newbie a bonus appears very enticing, it is the perfect formula. Often, as the others said, they will also have certain conditions attached to them.
Now, what about STP/ECN’s? well apart from the fact that a broker can have more than 1 model (a bit of B-Book with some STP and ECN) (which I believe is the case with 4xp), an STP/ECN broker will tend not to have bonuses, but if they do they will be linked to trading volume.
Why?
well it’s all about money. If as a broker my income is generated solely via part of the spread, then I won’t be giving big bonuses because I do not know if I am ever going to get that money back. For example, if i’m an STP broker and I make say $15 per lot from the client, and you mr. newbie fund with say $500, and I give you 50% deposit, I’m only going to start making any money off you once you have traded around 15 lots (or there abouts). Seeing that you are probably going to be trading microlots or minilots max, this may take a long long time. Also, likelyhood is that you may blow it much sooner… so as you can see, it’s not a great deal in this case.
In conclusion (sorry I feel I have digressed and written WAYY too much for this post):
-Being a Market Making broker or an ECN/STP doesn’t automatically make you worse/better as a broker.(being an unregulated bucketshop does though :22: )
-Choosing a broker solely because of a bonus is not the best choice
-Offering a good bonus doesn’t make the broker untrustworthy
-Many untrustworthy brokers offer good bonuses (I know, it’s confusing)
-Find a regulated broker, either MM ECN or STP doesn’t matter (the important thing is to know where you stand), try and find out what they are like to deal with, if they give you a bonus ok, if they don’t, don’t stress over it. The service, execution, safety of funds and attitude of the broker are key.