FXDD: Is this a 'typo' or is this 'brutal honestly'?

Broker Discussion Forex Brokers
1

I couldn’t but help notice this ‘benefit’ of opening an account with FXDD STRAIGHT OFF OF THEIR WEBPAGE:

Forex Trading Trading Benefits - Real Time Pricing, 24/7 Trading Support, No Hidden Fees, Charting | FXDD

‘Client funds are not treated as segregated funds, are not insured and do not receive priority in the event of bankruptcy.’

Do you think this is a ‘typo’ or just ‘telling it like it is’???

I mean to say: if it’s NOT a ‘typo’ then I’m sure everyone appreciates their honesty but I’d HARDLY call it a ‘benefit’!!!

LOL!!!

It’s a pity because this is BOUND to put some people ‘off’ and from just searching the threads over here I don’t see many, if any, complaints about them!!!

Regards,

Dale. [removed due to Forum policy]

2

hmmm…FXDD was one of my top choices for opening my first account…maybe i should go with someone else now :S

3

Hi,

Sorry about that.

To be QUITE honest: after I posted the above post I felt very ‘bad’ for doing so (to the point where I even thought about asking the moderators to delete the post). The reason I say this is because (at least on these forums) I can find no bad reports about them and in THIS day and age ‘that’s something’ let me tell you!!! I suppose that the only reason I have NOT asked for the post to be deleted is because, well, it IS on THEIR website so it’s ALREADY ‘out there’.

I’m not quite sure what to make of it. Perhaps you could point it out to them i.e. ask them WHY they have that statement posted on their website and is it INDEED ‘correct’ and see what answer they give you.

For what it’s worth: I’m currently ‘testing them out’ with a live account (they have a promotion on at the moment so I’m just using THEIR $100 in a micro account trading micro lots of 0.01 units or ‘Volume’ as MetaTrader calls it) and I’ve had no problems (two weeks). That said: this is ‘play money’ really so I cannot say if things will be different with REAL money if you see what I’m saying!!!

Regards,

Dale. [removed due to Forum policy]

4

Hi,

I felt SO bad about my post (because I figured that MAYBE I should have asked them the question MYSELF before posting) so I have now asked and here is the conversation:

[I]English Support: Welcome to FXDD Live Chat. How may I help you?[/I]
[I]Dale Paterson: Hi. I need to ask a question. I’ve cut and pasted this “Client funds are not treated as segregated funds, are not insured and do not receive priority in the event of bankruptcy.” from your website.[/I]
[I]English Support: yes [/I]
[I]English Support: that is correct[/I]
[I]English Support: it means that your funds are not insured[/I]
[I]English Support: in the even of bankruptcy there is no guarantee that you will be able to get your money back[/I]
[I]Dale Paterson: My question is this: why is this statement on the website??? Do you not think that this is going to turn potential clients away??? The reason this concerns me is that there are very few bad reports about FXDD which is great.[/I]
[I]Dale Paterson: But, of course, this statement makes people wary which is a great pity in my opinion.[/I]
[I]English Support: the reason why it is on our website is because we do not intend to misrepresent the policy[/I]
[I]English Support: exactly[/I]
[I]Dale Paterson: Well. That’s fair. No question about it.[/I]
[I]English Support: we are disclosing all the information as not mislead people[/I]
[I]English Support: but i do understand your point [/I]
[I]English Support: alright[/I]
[I]Dale Paterson: I am a moderator a message board.[/I]
[I]English Support: alright[/I]
[I]Dale Paterson: Do you have any objection to me posting this conversation over there???[/I]
[I]Dale Paterson: The reason why is because as I say: there are no bad reports about FXDD BUT somebody DID see that statement.[/I]
[I]Dale Paterson: So it MAY help to post this conversation. If you have objections then no problem.[/I]
[I]English Support: it is not a problem[/I]
[I]Dale Paterson: Thank you.[/I]
[I]English Support: you are free to post it on your board[/I]
[I]English Support: Thank You for your interest in FXDD[/I]
[I]Dale Paterson: Thank you for your time and honesty.[/I]
[I]English Support: My pleasure. Have a great day[/I]

Make of it ‘what you will’.

I suppose there IS another way of looking at this:

I mean to say: if a broker says on their website that your funds ARE safe and ARE segregated etc. etc. etc. HOW DO YOU KNOW that this is INDEED the case??? FXDD is at VERY least being TOTALLY honest by the looks of things!!!

I suppose the safest way to ‘play things’ with this broker (and who KNOWS i.e. maybe with ALL the brokers) is to not leave COPIUS amounts of money in your trading account i.e. withdraw funds once you have doubled your capital and then weekly / montly thereafter so that if anything DOES happen at very least you ‘come out square’!!!

Regards,

Dale. [removed due to Forum policy]

5

well, i checked it out for myself. here is a session from my live chat with them:

English Support: Welcome to FXDD Live Chat. How may I help you?
curious: hi
curious: i have a question about your ‘why trade with us’ page on your website
English Support: yes
English Support: what is your question please
curious: in your ‘complete security of margined funds’ section
curious: it states
curious: "Client funds are not treated as segregated funds, are not insured and do not receive priority in the event of bankruptcy."
curious: is that a typo?
English Support: no it is not a typo
English Support: it means that in the even of bankruptcy you are not guaranteed your money back
English Support: it is not like the bank and your funds are not FDIC insured
curious: ok
curious: thanks for answering my question
curious: g’nite

6

actually, to be honest it doesn’t scare me too much, because i used to play online poker and the situation is the same over there for many poker rooms, where you rely on the good will of a company for the security of your money. there just seems to be 100x more forex brokers than poker rooms i just need to be extra careful of where i put my cash.

7

LOL!!!

HOW FUNNY IS THAT!!!

When I contacted support there was one person ahead of me in the support queue!!! IT MUST HAVE BEEN YOU!!! LOL!!!

You must have been typing up your post at the same time that I was typing up mine because the moment I submitted my post above your post appeared!!!

Shame: that poor support person must think that all of a sudden there’s an ‘outright attack’ on them!!!

Regards,

Dale. [removed due to Forum policy]

8

I have both made and WITHDRAWN significant (at least to me) amounts from FXDD. No problems in service or support in over a year.

9

Thanks for that input.

(I actually have NO IDEA WHY I’m ‘defending’ this broker to be honest)!!!

As I said: aside from the $100 account that they gave ME I’ve had nothing else to ever do with them (and to be honest: I took it as an opportunity to create some code for MT4 and figured I may as well make a little ‘silly money’ while creating and testing the code otherwise I’d never have given them a second thought).

But as I say: it’s nice to know that you’ve had no problems and as I’ve also said it’s REAL HARD to find ANY broker that has very few (to no) bad reports posted about them so I’d hate for FXDD to ‘lose out’ because of my post (and their 'website honesty)!!!

Regards,

Dale. [removed due to Forum policy]

10

Here’s some additional info that applies to brokers in general, and it NOT specific to FXDD but applies to this thread:

How do you know whether your spot broker is one of the reputable ones or one of the sleazy ones? Since retail spot brokers are now regulated by the CFTC, you can check out their capitalization and selected financial information at http://www.cftc.gov/tm/tmfcm.htm.

Of course, high capital is needed only if every trade is not offset immediately. Low capitalization doesn�t tell you anything about the quality of the operation, which depends on management. Some retail brokers have capital of $250,000 (the minimum) whereas others have hundreds of BILLIONs. Are any of us qualified to evaluate capital adequacy? Probably not. But remember that it�s all your capital at risk when it�s entrusted to a retail spot broker. You may want to find out whether your broker is a market maker or offsets every trade with a third party.

In contrast, in futures, a rogue broker which takes a big loss because it was improperly position-taking is drummed out of the Exchange–and the customer is safe, because the Exchange guarantees every trade. The Exchange keeps a contingency fund, made up of assessments from every member, for any such occasion.

From a friend who has been through the crash of a broker:
One other noteworthy item of futures funds vs spot: Be sure you select a broker that is not a fly-by-night–has been in business for over 5 years,member of the exchange, etc. These brokers do go bust, sometimes but a member of the exchange is guaranteed by the exchange, a nice thing to have. I was at Refco trading futures and didn’t lose a penny when it went under while those trading spot at Refco lost everything.

Just some references, and again they apply to ALL spot brokers, not just a select few.

Not trying to start a debate on which is better, futures vs spot, just pointing out when it comes to “insuring” funds, futures appears to have a stronger position, as spot brokers don’t have any requirements nor does the “spot market” have a centralized body that insures the accounts of those involved, so if your broker goes belly up and you’re trading spot, you can lose your whole account.

Just some food for thought and additional info, but please verify everything as I’m far from an authoritative expert on any of these legal matters.

11

Hello,

That’s why I said to go have a look at the thread ‘Are you funds safe . . .’. ‘forex_savior’ has done a lot of work on this and other related subject matter. It’s worth the read.

Regards,

Dale. [removed due to Forum policy]

12

Well: I have to give credit when credit is due!!!

As you (probably) all know I took FXDD up on their ‘$100 offer’. The other day I had a stop order pending to sell USD/TRY at a certain price. For some or the other reason there was a data ‘spike’ on SOME of the charts and this caused my stop order to get ‘slipped’ a few thousand pips (being USD/TRY) before being executed. Of course: price went straight back to what it should have been and I therefore had a (comparitively) big loss on this position. I emailed them, informed them of the problem, and within five minutes the position was closed and the loss was transferred out. Nice going FXDD!!!

(Admittedly: this is only a ‘test’ account so we’re talking about ‘micro lots’ here. Would it have been different had this been a MATERIAL loss??? I cannot comment at this point).

Regards,

Dale. [removed due to Forum policy]

13

I just read your post about FXDD. To be frank, I have a large sum of money invested with FXDD and I am a very active trader. Should I be concerned about most of my life’s investment with them?

Are there any brokers out there that are entirely insured? If so, who are they?

14

Just to clarify, I have been with FXDD since 2010.

15

‘Client funds are not treated as segregated funds, are not insured and do not receive priority in the event of bankruptcy.’

you guys should be worry about your funds are being co-mingle with the company funds therefore they can use your money for there business purpose.