Beware! FX Centrum is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
FX Centrum introduces itself as a very helpful broker which gives away generous bonuses and free money, also trading competitions are arranged for the traders. Its marketing strategy includes a shiny website and a Facebook page which is daily updated with news and articles. Behind all of this stands an entity which we can only describe as shadowy with arguable legal status. Find out more facts about FX Centrum in the next review, there are plenty of interesting facts to consider, before you choose your broker.
FX Centrum REGULATION AND SAFETY OF FUNDS
FX Centrum is the trading name of WTG Ltd., a company registered in the Seychelles, which is authorized by the FSA in Seychelles to operate as a financial security dealer. However, the company website enlisted in the registry is wtgbroker.com, which is a website with no content, at all, hosted in Slovakia. The link with FXCentrum can only be found in the broker’s client agreement which is not a solid proof of legitimacy.
Even licensed by the FSA in the Seychelles, FXCentrum remains an offshore broker. The rules implemented in such offshore zones are not strict enough and there is lack of customer protections, also the entry requirements are much lower. For example in the Seychelles the minimum capital required is only 50 000 USD, while in EU it is 730 000 EUR, while in USA you will need not less than 20 000 000 USD!
The offshore brokers are also not transparent enough, it is unknown who is standing behind, also at any moment the entity might cease to exist and there aren’t compensation funds such as FSCS in UK and ICF in Cyprus. Under CySEC supervision there are guarantees of up to 20 000 EUR per client, while under FCA of even up to 85 000 GBP. In the Seychelles there is no protection and the traders are vulnerable, they might suffer losses if their broker gets in a difficult situation, simply disappear or refuse withdrawal.
FX Centrum TRADING SOFTWARE
FX Centrum maintains only its own trading platform and does not offer MT4 or MT5 accounts. Their platform is web based and includes the standard features and tools such as Indicators, Drawing tools, Lines, Fibonaccis etc. It certainly cannot compete with Metatrader, but we’ve seen much worse web based trading platforms before.
The spread with FX Centrum is high and stays at 3 pips during the London session. The leverage offered, reaches the bewildering 1:1000, a level extremely high and very rare to be seen in the industry. Such a level increases the risk of losses dramatically, it is more likely to get margin called than to register profits, because a sudden spike of no more than 15 pips will damage your account. The gambling nature of the boosted leverage is the main reason that made the lawmakers in EU and UK to impose a cap of 1:30.
We tried unsuccessfully to open a demo account .
FX Centrum DEPOSIT/WITHDRAW METHODS AND FEES
There is no minimum deposit to be determined by FX Centrum, as far as we know you can deposit any sum that you want. There are no deposit fees imposed.
The funding methods enlisted by FX Centrum include wire transfers, debit or credit card, PayPal and Perfect Money. Strangely, when you click on the Deposit button in the Dashboard you are redirected to the Payment Methods web page in their website. There you can find only instructions for wire transfers or you can straight away make a PayPal payment. Bank cards and Perfect money cannot be used if you want to fund your account, it’s a piece of disturbing information and an evidence that such a misleading Forex broker should never be trusted!
No minimum withdrawal amount specified, also there isn’t information about the processing time or fees incurring during the operation. Withdrawal methods are said to be corresponding to the funding methods but the details presented are really obscure.
There aren’t any fees specified in size and scope, but they include some vague legal terminology such as “reasonable charge”. They declare that the account will be “reasonably” charged if the trader does not place orders, it’s called Data feed charge. Have a look at the definition of the unfair practice!
Their Dormant account policy is one of the most severe you can find, an account which is inactive for at least three months presents a legitimate reason for being closed. But nothing mentioned about a refund! Here is the clause:
The main focus of FX Centrum are the incentives, they give out generous bonuses to anyone who sign up with them, including free 50 USD even if you do not deposit money, or up to 100% if you deposit. You can also win the latest Iphone if you engage in a competition. If you want to compete for the smartphone you should open a real account, deposit minimum 1000 USD in it and open at least one position per week. Such a trading competition does not look good on a reputable and trusted broker, it shows amateur level!
In order to withdraw profits the trader should trade the amount of the bonus divided by 2. It means that if your bonus is 100 USD you need to execute trading volume of 50 lots to become eligible for withdrawal! 50 lots is a massive requirement considering such a tiny amount as 100 USD!
Bonuses were banned in the EU and UK for a reason, the bonuses given would usually put the trader in harsh conditions, despite the fact that it looks as if he was granted free money. Trade with a broker which is truly regulated by a strict financial authority, otherwise the bonuses combined with boosted leverage might cause you significant loses in a very short period of time.
HOW DOES THE SCAM WORK
Bonuses offered to European traders are considered illegal because of the EU ban, and anyone who offers similar incentives violates the European laws. When given a 100% bonus, let’s say, your account will double and if you had 1000 USD, with the bonus applied there are 2000 USD available to trade. Your stop loss level, however, will automatically be shifted to 1000 USD by the broker. Trading with boosted leverage such as 1:1000 means that the risk for your funds increases dramatically, in case of a bad trade the value of the deposits in your account might quickly come to as low as 1000 USD and then boom, margin call! After the event the broker will collect the bonus given and you will be left with a few cents in your account, and this is the positive scenario, because many unlicensed entities allow indebted account and you might actually have a negative balance. Bonuses plus increased leverage should be always avoided, it is not trading but gambling.
On the other hand, a trader who doesn’t use higher leverage will usually have to execute trading volume which is way too high to achieve. For example, FX Centrum will require from you to trade 500 lots if you want to withdraw funds from your account with 1000 USD deposited, which is an insane requirement! It is a push for the trader, which usually leads to bad trading decisions and overtrading, as result there is a poor trading performance and a waste of time and money!
WHAT TO DO WHEN SCAMMED
Anyone can get involved in scam, scammers are constantly changing their strategies and no one must feel safe. If being scammed the first thing you should do is to protect yourself from further risks. Contact your bank and explain to them your situation, they will give you important instructions to follow and will help you, if possible, recover your money.
Report what have happened to you, file a complaint, contact the financial regulator, contact other government institutions dealing with trading and investing. Seek help actively!
Share online your experience, it is important to protect others, as well. Be responsible!
Avoid FX Centrum, their trading conditions are unfair!