FXFellow review – 5 things you should know about fxfellow.com

FXFellow review – 5 things you should know about fxfellow.com

Rating: 2

Beware! FXFellow is an offshore broker! Your investment may be at risk.

RECOMMENDED FOREX BROKERS

IG USForex.com

Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.

 

FXFellow is a name suggesting that you are dealing with a signal trading provider or a forum, but not a Forex broker. It’s actually an offshore Forex broker that stands out among the other of its kind. FXFellow is owned and operated by a company that is somewhat linked to other companies that hold licenses in the EU and UK, but this is not the case here. Notesco Limited has actually lowered its standards with this broker, find out why in the full FXFellow review.

FXFellow REGULATION AND SAFETY OF FUNDS

FXFellow is a trading name of Notesco Limited, a Bermuda based company, that also operates another broker that we have already reviewed- Fxcess. Notesco Limited is also linked to two separate companies that hold CySEC and FCA licenses, but these two have nothing to do with this particular broker. Bermuda’s regulations are not the strictest, but specific rules contribute to the protection of the customers, such as the minimum capital requirements of $250 000, which safeguard the ongoing financial soundness of the brokers that are based there. However, Notesco Limited doesn’t hold a valid license issued by the Bermuda Monetary Authority (BMA)- the financial regulator that supervises the island.

 

FXFellow is a bit of a bizarre broker, having some disturbing aspects of its business, and we do not recommend opening an account with them. Instead go for an established true Forex broker, that holds the licenses and is duly regulated in EU or UK. Europe succeeded to create the safest environment for the retail traders, by imposing many customer protection rules that the Forex brokers are bound to keep. A fine example is the Negative Balance Protection, meaning that the trader cannot lose more than the sum deposited. If you trade with an offshore broker, you might even end up in debts, owing money to the broker, which is certainly not desirable. FXFellow says to offer Negative Balance Protection, but it’s a broker that’s not regulated, meaning that the implementation of such a protective measure depends entirely on their goodwill, which guarantees absolutely nothing for the trader.

There are also money protection schemes in operation, such as ICF in Cyprus and FSCS in the UK, which guarantee clients’ deposits. Under CySEC (Cyprus) supervision you can claim up to 20 000 EUR in compensation, while in the UK under FCA you are guaranteed of even up to 85 000 GBP. Each EU member state is compelled to create and further operate such a fund, which is regarded as a last resort for the traders, in case a Forex broker faces difficulties to meet its financial obligations.

FXFellow TRADING SOFTWARE

FXFellow offers MetaTrader4 to its customers; MetaTrader5 is not available for trading. It is easy to download and install their distribution, but most shockingly, we were unable to open a demo account, which is a very notable weakness of this Forex broker. In fact, you might be able to open one, but only after you send them proof of identification documents. Remember, you should certainly not send your documents randomly to any broker that requires you to do so! It is a must for the Forex brokers to provide the traders with demo accounts without such terms and conditions applied. It is the best way to test the brokers, and if you are not allowed to trade demo, you should stay away and not make deposits, or send documents.

The EUR/USD spread is said to be 0.7 pips, but we cannot confirm it as valid because we didn’t have any access to the platform or the dashboard. Yes, we agree, that it’s part of the KYC policy and Anti-money laundering measure, but FXFellow does not give any chance for the prospective trader to test their products and services.

The leverage is said to be as high as 1:500, which is a hazardous level that we do not recommend, as well. You’d better deleverage as much as possible and start looking for consistency in your trading, not for trades that are going to double or triple your account each day. Such a style indicates gambling, not trading, and will sooner or later drain up your account!

FXFellow DEPOSIT/WITHDRAW METHODS AND FEES

FXFellow offers Mirror accounts to its clients, but fail to give comprehensive information about it. We assume that it might be linked to social or copy trading, but there is no way we can confirm that because as you already know, we have to send them personal documents and we do not want to do so! Also, you can only open EUR or CHF account, which is absolutely ridiculous! The US dollar is the most popular, widespread and important currency in the world, and this definitely raise a red flag!

The minimum initial deposit is $500, which is much higher than the industry standards. Usually, the legit Forex brokers will ask for not more than $100, some of them will even accept as little as 5 to 10 bucks as entry deposit.

The funding methods available are Wire Transfers, Debit/Credit cards, Neteller, Skrill and China UnionPay and you cannot make a deposit without proof of Identification, which is a thumb up this time, putting FXFellow in line with the rest of the legit Forex brokers.

There is no minimum withdrawal amount specified and no withdrawal fees applicable, and in this case, FXFellow also acts as a true Forex broker.

An account becomes dormant after a year of inactivity and FXFellow will charge an annual administrative fee of $50. It is a fair clause, that broadly corresponds to the industry standards, even though, some Forex brokers will not charge you a dime if you stop trading for a year or two.

There is some bonus program, but FXFellow fails to give further comprehensive information about, as well. It is some sort of welcome bonus but doesn’t include unfair conditions such as minimum trading volume to reach if you want to withdraw. A fair play, because the bonus doesn’t freeze your account for withdrawals, but the risk increases significantly. Our readers should know that the bonuses are not free money, but a leverage tool, which puts the trader in an even riskier position. You can double the size of your trade, but the disposable funds that will cover the open position on the market will still be your balance before the bonus inserted. The stop-out level will be lifted to the amount granted, and you will actually double your risk while thinking that you received some free money. But this is not the case, and it’s the main reason that made the EU and UK ban the trading incentives offered by the regulated Forex brokers!

HOW DOES THE SCAM WORK

The scam is a criminal activity, and the scammers are trying to defraud people by making them believe that they can make easy money. In most of the cases, the scammers are hiding behind offshore companies, offshore Forex brokers, trusts and so on, trying to remain anonymous and difficult to trace. There is no or very light FX regulation in the offshore jurisdictions such as Vanuatu, Marshall Islands or St. Vincent and the Grenadines, making them some of the most popular destinations for shady and illegitimate enterprises. Regulation means customer protection and safety, financial authorities such as CySEC or FCA will make it impossible for a scam Forex broker to conduct illicit activities and harm the traders.

WHAT TO DO WHEN SCAMMED

No one is immune to scam; anyone can fall into the trap. Scammers are constantly looking for new and different ways to scam consumers. What you need to do first, in case you got scammed, 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 happened to you, file a complaint, contact the financial regulator, contact other government institutions related to trading and investing. Seek help actively!

Share online your experience; it is important to protect others, as well. Be responsible!

Top Forex Brokers

BrokerCountryRatingMin. DepositWebsite
USA5/5$250 Click for a special offerWebsite
US4.99/5$50 Click for a special offerWebsite
UK, Cyprus, Belize4.94/5$5 Click for a special offerWebsite
Australia, Cyprus4.93/5$100 Click for a special offerWebsite
UK, Australia4.85/5$50 Click for a special offerWebsite
Cyprus, SVG4.8/5$100 Click for a special offerWebsite

Leave a Reply

Your email address will not be published. Required fields are marked *