I want to now deposit £50K with a Broker after a year of demo trading and refining my strategy… but I am worried about putting such a sum in to the hands of… well, strangers really.
What are the possible reasons that a Broker could cause me problems when coming to withdraw my money…? … Can you be ‘too’ profitable…?
I have heard that a Broker will let you deposit as much money as you like, and also will let you withdraw any profits without a problem… but when it comes to withdrawing your original funds then there can be circumstances that a Broker will not allow this… my broker is fully regulated btw.
Do you have any horror stories regarding this??.. I’m just trying to carry out as much due diligence as possible before depositing (in stages) the amount that I have to trade with.
As long as your broker is registered with and regulated by the FCA and registered with the FSCS in the UK then you’re good to go. That’s the short answer anyway. £50K is not small change. At least in the UK the FSCS covers your funds up to an amount of £85K should your broker run into financial problems. The added BONUS of course: lower leverage.
Reliable stories of people’s experiences are thin on the ground but you can definitely expect a company to be about twice as careful giving money out as taking it in. So whether its deposited funds or profit from trading makes no difference to them.
The reason they are going to be cautious sending money to a client is so that they will not be found guilty of money-laundering. This is a serious criminal offence with massive penalties, not just a civil breach of contract matter.
So when you some to withdraw any money from them, expect to have to comply with additional requirements about ID and income etc. that were nowhere to be seen when you applied for an account. All of which is not problem if you can show the money was yours and the firm is in a well regulated jurisdiction.
Yeh. But just remember one thing: not all regulators are created equal. Dunno. Don’t think I’d sleep nights if my money was sitting at a broker regulated by the Vanuatu Financial Services Commission (which really does exist i.e. true story!!! LOL!!!). Another personal favorite: International Financial Services Commission Belize. One of the oldest operating scum bucket scam artist bucket shop brokers (telling you how I really feel) is in Belize and still going strong. Go figure.
Guess the point I’m trying to make is that the regulator has to be active, credible, and yield some authority and power. Otherwise it’s just window dressing and nothing else.
P.S.
This too funny. See below. I actually had the Belize IFSC page open (was going to post a link to it here but didn’t bother) and was about to close it and saw the below. I rest my case!!! LOL!!!
“The Commission relies on self-regulation, meaning that while government sets overall standards, it expects much of the actual work in terms of monitoring and compliance to be done by the (financial) industry itself.”
You’re wasting your time depositing £50K unless you can afford to lose it in the first place, whether you lose it via trading or broker manipulation is another matter.
Without knowing your broker its hard to judge.
The question is why do you need £50K in the first place. If the average trade size is under 1 lot you don’t need anywhere near £50K.
To be fair though: don’t exclude some of the brokers and countries in Europe either as long as they MiFID licensed and regulated. Arguably one of the finest and most heavily regulated brokers on the planet is in Bulgaria (and I can say this still with conviction and a happy heart in spite of our terminating a business relationship some years ago which really didn’t suit me to have terminated at the time). Don’t get happy though i.e. still fall under ESMA regulations so forget about leverage.
Good Jesus (Karl). And I thought I was negative??? LOL!!!
There is absolutely no reason for the dude to lose his money trading. You and I both know that. And with that amount of capital he should be able to trade proper.
Oops. My bad. Forgot I was talking to somebody whose broker doesn’t fall under ESMA restrictions!!! LOL!!!
Let me qualify the above:
I am making the assumption that anybody that is now prepared to commit £50K at very least knows what they’re doing (or likes to think so anyway i.e. based on more than a simple whim and a prayer).
If nothing else: the FCA are active and conduct surprise audits periodically and will not bend or break rules not for love nor money. Says a lot really (in my opinion).
Sorry but I just took the liberty of looking at your other posts prior to your asking this question.
I beg of you: don’t put this money into ANY broker and expect to make money out of trading the news. It’s not going to happen. I say this because in just reading your posts it seems to be the type of strategy that you’re leaning toward. Don’t do it. Unless you’re one of the Dragons: £50K isn’t chump change to lose. With that kind of money you could make some decent cash. Don’t waste the privilege is all I’m saying. Not my money of course. Just some advice.
Oh well. On the other hand: maybe it’s just me and my current situation. I have a bad habit of converting everything to South African Rand. That’s almost R1M ZAR. With that in a ZAR denominated account I could make R100K most months with my eyes closed even with my snail’s pace trading system. Maybe it’s not that much in GBP if you live in the UK.
Thanks @tommor … it’s these ‘mystery requirements’ that worry me most… I can prove the money is mine OK… I sold my apartment a couple of years back, and decided to fund myself whilst ‘learning’ Forex and it is those funds that I would be depositing. You mentioned ID & Income… I have been travelling and living abroad most of the past couple of years, so although I am a UK citizen with UK passport and bank account, I don’t full time live in a permanent address in the UK currently… I wondered if any aspect of that would affect my residency/status…?
@dpaterso … thanks for all your posts… the broker is fully regulated so I have no worries about the broker or their regulator being dodgy… my concern is whether they have any extra ‘mystery requirements’ when it comes to withdrawing as per how member ‘tommor’ above brought up.
Re trading the news… I know that all the guides and tips say to stay away from trading during news events… but I have built my own Robot specifically to trade the news which so far has me in profit… So it’ll be over the next 3 months that I will be deciding fully whether it’s consistent before putting in my £50K… I am very strictly controlling my risk so not the type to chuck my money in on a whim… my target profit monthly for my strategy is 5%.