Is it reasonable for brokers to cancel profits without a clear explanation?

I have read several cases where brokers have removed traders’ profits on the grounds of “rule violations” without concrete evidence. In your opinion, how should traders respond to this?

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Hmmm. :thinking: Personally, I’ve never really had this happen to me. I think it’s already a red flag that a broker would do this without even informing the trader beforehand. :open_mouth: But the first thing I would do is reach out to their customer support to get an official explanation of what this violation is. I’m not sure how easy it would be to report them to the regulatory organizations, but that would be the next thing I’d probably do. :open_mouth:

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I wonder though if anyone here has had this experience? Do you know of anyone who has gone through this @bambangsugiarto? :open_mouth:

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If you’re trading with a Regulated broker in tier 1 or 2 Jurisdiction, the answer is NO … they can’t remove your profits without solid evidence and regulatory justification. Regulated brokers must follow strict rules of transparency and fairness and they cant just cite vague violations…Always request written proof for any action… And please… Everyone on this forum… Avoid Unregulated/Unlicensed brokers.

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One more thing to consider for security when choosing a broker: it will be easier if we get to know the “people” at the broker through social media or other media that serve as intermediaries between us and the broker, in addition to formal communication via customer service. This is very helpful in terms of emotional approach because we can provide a detailed chronology so that our alibi is irrefutable. So far, I believe in one broker where the people behind it are willing to appear on social media and we can interact with them.

Absolutely true and that’s an excellent point… Most regulated brokers have representatives active on social platforms like LinkedIn or Xing. It’s always a good idea to connect directly with your broker’s representative there … a bit of human to human interaction goes a long way.

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Yes, anyone would feel comfortable if we could connect with people at the broker we use.

They’re not really brokers, then, are they?

They’re counterparty market makers. They profit themselves, when their clients lose.

A “broker” isn’t financially involved in the outcomes of his clients’ trades, and isn’t allowed to be. They get the same commission whether the client wins or loses. So they have no incentive for clients to lose.

Exactly.

Issues like this always boil down to who the regulator is and whether it’s a real one with the power to protect clients.

Funnily enough, everyone who starts off multiple trading forums conversations about how brokers behave always does.

That’s why they’re here.

It’s terribly obvious from the threads they so repeatedly start.

But funnily enough, the “one” they so much “believe in” always turns out not to be a properly regulated one. Go figure!! :sweat_smile:

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Almost always, simply because those are the ones who pay people by the post/thread for online recommendations.

The legitimate ones with a real regulator aren’t allowed to: that trick’s for the ones “regulated” by the FSCA (South Africa) or by other so-called “regulators” often on Caribbean/Pacific island countries! :roll_eyes:

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Canceling profitable trades without a clear explanation is generally not reasonable or justifiable. While brokers can cancel trades under certain circumstances, such as errors or abuse of their terms of service, they usually provide an explanation. In contrast, a pattern of canceling profitable trades without justification is a sign of an unscrupulous broker or a scam.

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Always read the terms of service and CFTC Risk Disclosure Statement of any regulated broker.

FOREX,COM - CFTC Risk Disclosure Statement

YOU SHOULD BE AWARE OF AND THOUGHTFULLY EVALUATE THE FOLLOWING CONSIDERATIONS BEFORE DECIDING IF THIS TYPE OF TRADING IS SUITABLE FOR YOU.

(1) TRADING IS NOT CONDUCTED ON A REGULATED MARKET OR EXCHANGE—YOUR DEALER IS YOUR TRADING PARTNER, WHICH CREATES A DIRECT CONFLICT OF INTEREST.

PRIOR TO PARTICIPATING IN ANY RETAIL FOREIGN EXCHANGE TRADING, IT IS IMPORTANT TO VERIFY THE REGISTRATION STATUS OF YOUR COUNTERPARTY.

The off-exchange foreign currency transactions you are participating in are not executed on an interbank market, nor are they handled on a futures exchange that is regulated as a designated contract market by the Commodity Futures Trading Commission.

The currency trades you engage in are transactions with the futures commission merchant or retail foreign exchange dealer functioning as your counterparty. WHEN YOU SELL, THE DEALER BECOMES THE BUYER. WHEN YOU BUY, THE DEALER BECOMES THE SELLER. Consequently, when you incur losses while trading, your dealer profits from those trades, alongside any applicable fees, commissions, or spreads the dealer may impose.

customeragreement_v3.0.31_20250801.pdf (263.0 KB)

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Back in 2013, this trader claimed his regulated broker closed his account for too much profit made.

Back then it was the wild, wild west trading with U.S.-regulated brokers; they got away with so much sht

My broker closed my account for "too much profit made

https://www.forexfactory.com/thread/452189-my-broker-closed-my-account-for-too-much

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I agree with you, every broker has terms and conditions that apply. In addition, market conditions are a factor that may influence a situation that could lead to cancellation. But yes, a transaction must be accounted for by the broker.

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Yes, I understand. Could you give a more specific example like the case I mentioned above? So far, I haven’t experienced this with my broker. In addition to regulations, we also need to know who is behind the broker so that we are aware of their reputation. Do you agree?

I haven’t experienced any of these tactics that some people claim they have experienced, including the title of this thread that you started.

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It’s always good to see a broker representative addressing traders’ complaints on social media.

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Are any of these prop firms, which normally aren’t brokers in the real sense of the word?

SchmaltzHerring warn me about you

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If this is how your brokers market their products, I want no part of them

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Thank you for your help, but I think that’s one way we feel safe using a broker.