Beware! LexaTrade 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.
LexaTrade is a forex broker trading in indices, commodities and forex. The website of this company is organised in a way to facilitate registration and start trading right away. Whether it is safe to trade via this broker, we are about to find out.
LexaTrade Regulation and safety of funds
Swissone Group Ltd. is the company that operates LexaTrading. The company’s address is in St. Vincent and the Grenadines which is an offshore zone. Whether it is an offshore zone or a well-established jurisdiction matters a lot in forex trade because forex brokers from offshore zones are not regulated and as such cannot provide guarantee for your funds. Forex brokers in St Vincent and the Grenadines (SVG) are not regulated by the Financial Services Authorities there which means that if the broker goes bankrupt or simply decides to shut down the site, your money will be lost. We de not recommend trading with forex brokers from offshore zones, such as St Vincent and the Grenadines.
On the other hand, licensed brokers from the well-established jurisdictions, such as UK, EU, US, Australia and others, offer a good protection for your funds and provide a guarantee that you won’t be scammed. Let us give you and example. Licensed forex brokers in EU and UK must have an initial capital of no less than 730,000 EUR to be allowed to operate. In addition to that, they must report their transactions on a daily basis as a precaution measure against scam and shady deals. As you can imagine, scammers will not invest so much money and effort just to look legit. Also, the licensed brokers in the jurisdiction we already mentions, must contribute to compensation schemes from which the traders will be compensated if the broker goes bankrupt. If the broker is regulated by FCA, its clients will be compensated up to 85,000 GBP per person and if it is regulated by CySEC, then the clients will be compensated up to 20,000 EUR per person. Licensed brokers from US and Australia also offer excellent conditions for the traders and we recommend that you do a thorough research before selecting your forex broker.
LexaTrade Trading software
LexaTrade’s choice of a trading software is a web trader platform. For clients using the Platinum and VIP accounts, the broker provides access to MT4.
On the screenshot below you can see what the platform looks like. On the left, you can see the menu with the different trading products – currency, commodities, indices, stocks and cryptocurrencies, as well as the market hours. Next to it, are the currency pairs with their bid/ask price and trading amount. Far right is the chart that displays one of the currency pairs, EUR/USD, and its fluctuation in price for a given time period. We can calculate that the spread for this currency pair is 2 pips. We could say that the spread is within normal boundaries – neither too tight, nor too wide. However, on the company’s website, we see that the leverage is 1:200 which is high. Traders choosing brokers that offer high leverage are at risk of losing their funds. High leverage signifies 2 things – big win or big loss. Having in mind that around 70% of traders lose in transactions, chances are you are going to lose rather than win. Our advice is to stay away from brokers offering such high leverage. For your information in EU licensed brokers cannot exceed 1:30 leverage and in US, the leverage cap is 1:50. These are preventive measures, so traders do not get tempted and avoid losing their hard-earned money.
It is interesting to mention that there are some restrictions set in the Terms and Conditions document regarding the short-term transaction also known as scalping. If clients use the web platform, their minimum transaction time should not be less than 3 minutes if transactions are executed manually. If the transaction’s duration is less than the specified time, then the transaction will be canceled. Also, if the client has a bonus and is using MT4, then the same restrictions apply. If there is no bonus, then there are no time restrictions for the execution of the transaction. This is something you should keep in mind if you choose to trade via this broker and scalping is your game!
As we mentioned above, to its privileged traders, LexTrade offers the MetaTrader 4 platform. This is an excellent choice as this platform is one of the widely used platforms, together with MetaTrader 5. It offers a lot of perks to its users. For example, it comes with an auto trading option, a code base with customs scripts, a financial calendar and an app market. Its charting options are second to none! Clients can choose among a variety of technical analysis indicators, such as Bollinger Bands, Fibonacci retracement, moving averages and other, which help them predict the future direction of exchange rates and help them make profit.
However, do not forget that an excellent platform cannot compensate for the fact that this broker is not licensed.
LexaTrade Deposit/Withdrawal methods and fees
In the screenshot below, you will see the 5 trading accounts that LexaTrade offers to its clients – Start, Silver, Gold, Platinum and VIP accounts. The minimum initial deposit for the Start account is $250. The other accounts start at $3,000, 10,000, 50,000 and 100,000. As we mentioned in the previous section of the review, among the perks for the clients of the Platinum and VIP accounts is an access to MT4 platform.
The minimum amount of withdrawal is at least $ 50.
The payment methods for deposit and withdrawal are rather limited – VISA/MasterCard and cryptocurrency – CryptoWallet, Bitcoin, e-Payouts, etc.
What we’ve noticed in the Terms and Conditions document, is that this company charges rather a lot of fees. First, there is the additional commission of 5% is the client conducts less than 5 transactions. Also, for accounts that remain inactive for 90 days, 5% will be charged each month.
If you look again at the account type info, you will notice that for each type of account, the broker offers bonuses in various percentages depending on the account type. You must know that bonuses are double-edged swords because they come with heavy to fulfill requirements attached to them. In this case, to be able to withdraw the bonus amount, the trader must trade a trading volume of $10,000,000 for every $1,000 bonus and withdrawing bonuses and incomes is possible only when the volume of trade is reached. Can you imagine what mess this is going to create for your funds. And what would happen if you decide to close your account? Do you think you’ll be able to get your funds without any hassle? Think again!
How does scam work?
No one wants to be duped by scammers, but it happens all the time because they know how to manipulate people. As they say in one popular song “sweet dreams are made of this” and this is what scammers rely on – creating in people’s mind a sweet dream of being rich! Scams usually start by unsolicited telephone calls or ads on the Internet or social media promising quick and easy profit. It is easy to fall into scammers’ trap and once you make a deposit, you are done for! Scammers won’t let you get away easily even if you realise that you are being scammed. They will try to delay you when you try to withdraw your funds by asking you to provide this document or fill out this form, etc., in order to make you miss the deadline when you can file for chargeback.
What to do if scammed?
You need to act very quickly. First of all, if you have made a deposit using a credit card, you must immediately file for chargeback. Fortunately, VISA and MasterCard allow for 540 day period in which you can file for chargeback. This is the good news. The bad news is that if you have made a deposit using bank wire or Bitcoin, the chances of you getting your funds back are nil!
Another thing you can do is cancel your credit card if the scammers have your CVV code. Check your PC and erase the software that gives scammers access to your personal data.
Be careful, because even doing all that we recommended, your unfortunate experience with scammers may not be over. There are the so-called recovery agents. One of those may approach you offering to recover your funds for a fee. Do not trust them and always check the legitimacy of the recovery agent and the agency.
Also, be aware that some “victims” of scam may post comments after the review, saying how they lost money and how a recovery agent helped them retrieve their funds. They will even put the contact info for this so-called recovery agent. Do not trust them either as it is another case of scam!