hi, im trying to chose a broker and i have it little hard.
icmarkets has good tight spreads and stuffs and low commission.
fxpro has also tight spread only little more than icmarkets(we talking about pippettes).
now the difference is that icmarkets doesnt have negative balance protection while fxpro has.
what do you think of this?
which one would you choose, for daytrade/scalp
appreciate any help
I have no personal experience of either of these brokers but in general here are some thoughts:
If you are truly scalping or daytrading with very short open trade durations then the negative balance protection is not so relevant because your targets and stops will, by definition, be very close to the current price and you are not exposed in the market for any great periods of time. Therefore, it is less likely that you would get caught in a situation where there is a sudden jump in price and all bids/offers have disappeared completely such that even your broker cannot automatically close you out when your margin is exhausted. Of course, this risk is always present to some degree for any trader…
However, negative risk protection is always worth taking if there are no disadvantages attached, but, as in this case, the spreads are often wider and there is always the likelihood that spreads will widen even further whenever the market volatility picks up or fast price movements are anticipated.
There is never “something for nothing” and one needs to balance the pros and cons of each alternative and determine which scenario suits one’s purposes best. In this case, maybe, depending on your trading volume, position size and style, tighter spreads may be more important than negative equity protection.
It goes without saying that risk of total loss, and more, is always theoretically present whenever a position is open but one should only be trading if one has sufficient capital to absorb such risk and which one can afford to lose should this kind of rare event actually occur.
some good info! thanks!
You should choose a broker based on points of where you reside in, regulations, funding/withdrawals suitability, and not for the reasons you provided.
I don’t know about FXPro’s spreads being tighter, but honestly the difference is too small to even be a valid point of comparison. I trade with ICMarkets and the spreads are consistently below 1 pips on major pairs after an hour of two on session rollover. You’re talking differences in pippettes. From a liquidity point, a tight spread means nothing if you constantly get slipped when trying to enter an order so there’s no point in trying to compare differences this small.
Although the negative balance protection is a good feature, but honestly how many times do you actually need it? If you are trading and not gambling, you will know to avoid periods of extreme volatility. For example, the French election is coming up. It’s pretty clear you shouldn’t try to hold any positions over the weekend or use excessive lots. If you trade reasonably, there should be no reason why you will need negative balance protection. It is just a feature being advertised, which I consider a bad one.
If a broker offers negative balance protection, that means two things. Either they will use their own money to pay the liquidity providers, which makes you wonder what happens if they run out of money? Either they forgive your negative balance or they are forced to shut down due to lack of capital to continue operating. The other consideration is if they are willing to forgive negative balances, they could be a market maker on the other side of your trade, which is why they can easily forgive it.
I would be interested in the finances of the broker and who regulates the broker and their address… If on some island somewhere and unregulated I would run away.
The spread is not all that important to many people. Some people envision themselves to be scalpers and waste their time watching charts trying to make bank. Once they lose their interest in sitting at the computer all day to make little, then they go to a higher time frame and the pips do not matter.
Scalping sounds romantic and thrilling but does not pay many people very well.
Do your due diligence on the finances of your broker, make sure he has enough cash to pay your withdrawals. That is much more important than pips.
I haven’t worked with either of these companies, but I am still suggesting because one of my friend trades with ICMarkets and he says they are good, so on his view, I will suggest you that. I believe you need to check for reliability because that is the ultimate factor, as rest is just minor stuff. If you are safe and secure then you will always land into safe zone. Hope it helps….
Why those two brokers? Where are you based? What capital are you looking at investing? (no need to answer directly). Large/small?
Look for good rebates also.
those are the 2 that i know of that other people use, and also because they offer true ecn.
im based in europe. investing capital is demo at beginning, but when i start real account it will be still a small account that i can afford losing.
what scares me is that if my account goes to negative balance. Do i have to pay it to them?
will i get jail sentence if i don’t?
I haven’t worked with either of these brokers but I feel ICMarkets look better given they are Australian based. I like Australian based brokers given their safety. I feel pretty good with them and enable me to work really nicely with things. My personal choice is FP Markets who I have been operating since fair time now. They are Australian based with no gimmick but simply straight cut things and more importantly, they are secure enough which is biggest thing as per me.
IC Markets do not offer negative balance protection and I believe they’d be entitled to chase you for the money owed.
However, the easy solution is to never get yourself so over leveraged you’d ever worry about a margin call.
Well yes, if the broker does not have negative balance protection, you will be obliged to pay the difference if your account goes negative for some reason (caused by you or some extreme market event). I agree that such case is highly unlikely to happen but as we all know the market is unpredictable so the risk still stays. It’s important to review the brokers’ headquarters and regulators as well before choosing the right one for you and check if the funds are segregated.
If the difference between the trading costs is very small then you should definitely focus on the above mentioned legal conditions. I personally would prefer a broker who offers negative balance protection and segregated funds as it would make me feel more secure while trading but of course this is my opinion.
FxPro is weaker than IC Markets in these years, I also tried both those 2 brokers at standard account and FxPro has local support while IC doesn’t. Regarding payment, I give +1 to FxPro with faster payment. Both have similar trading conditions depend on your account type.
Stay away from IC Markets.
I read plenty of reviews and still decided to go with them. Big mistake.
I put straddle trade on GBP/NZD for interest rate announcement.
I had
with both stops at 1.7860.
at the announcement price plunged although my long order was triggered and closed at 1.7860 even though price went no where near the entry order price.
The short order was also triggered as you would expect but with 14 pips slippage at 1.782620
and CLOSED OUT at 1.7873 even though price was still falling.
The times on the order tickets were about 1 sec apart so they basically just closed my orders and took my money.
It is impossible that the short order could be stopped out 50 pips above the entry price in a falling market.
Now maybe this wasn’t the wisest trade decision but they just outright robbed me.
Whatever excuse they have, it’s not good enough.
I believe the term IC Bucket Shop will become well known in the Forex world.
I know that most all brokers are there to take your money but this is straight up robbery.
Stay away from IC Markets. They are super shady and their so called super tight spreadfs aren’t tight at all because the trade can go 2 to 5 pips in your favour and still be negative.
They run a slippery algorithm on their MT5 platform anyway.
So. I have an account with OANDA and am now going to trade with them and close my account with IC Bucket Shop.
I suggest that anyone who has an account with them do the same before they rob you blind.