Beware! ProfitFX 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.
When you look at the ProfitFX interface, you won’t find anything remarkable or exceptional about this broker. It looks like any other run of the mill forex broker until you start looking for details. Then you discover that not all is as good as it should be with this forex broker trading in forex, metals, energies, indices, cryptocurrencies and commodities.
ProfitFX Regulation and safety of funds
Our first point of dissatisfaction is about the registration of this company. On the website, we see an address in London, UK. However, when we opened the Financial Conduct Authority (FCA) register which keeps tracks of licensed forex brokers, the name of this company was not there. The conclusion is that this forex broker is not legitimate, therefore, entrusting your funds to it may be a risky undertaking.
We strongly suggest that you look elsewhere for a reliable broker. We can suggest brokers in some well-established jurisdictions, such as the EU, the UK, the US and Australia. In these jurisdictions, forex brokers must jump through numerous hoops in order to get their license. First of all, they must have an initial capital which usually is a huge amount of money that serves, among other things, as a preventive measure against scammers. You can’t imagine scammers investing $20 million in the US or 1 million AUD in Australia just to look legit! Although in the EU and the UK the initial capital is not that high, only 730,000 EUR, there are other benefits that potential traders can benefit from. We are talking about the fact that in these two jurisdictions forex brokers must contribute to a local compensation scheme from which traders are compensated if the broker is declared insolvent. Brokers regulated by FCA contribute to the local Financial Services Compensation Scheme from which traders can be compensated up to 85,000 GBP per person. On the other hand, brokers regulated by CySec that contribute to the local Investor Compensation Fund from which traders will receive compensations of up to 20,000 EUR per person if the broker goes bankrupt.
These are not the only measures for guaranteeing the safety of traders’ funds. In addition to all of the above, brokers must report on a daily basis about their transactions in order to avoid shady deals, they have a cap on leverage (in the EU, UK and the US) to prevent traders taking risks with their funds and they keep traders accounts separately. These are, indeed, excellent conditions that should be taken into account when selecting a forex broker.
ProfitFX Trading software
The trading software offered by ProfitFX to its clients is MetaTrader 5. This is a well-reputed trading platform favoured by most of the forex brokers for the excellent package of trading tools and instruments. This platform comes with a demo account, auto trading option, code base with customs scripts, VPS, trading signals, an app market, a financial calendar, to name a few. If you have a chance to trade via this platform, you’ll discover the amazing array of charting options from which traders can select different chart types time frames, colours, create templates or use the technical analysis indicators to predict the future direction of exchange rates and make a profit.
In the screenshot below you can see the MT5 operated by ProfitFX. In the middle, you see the display that shows 4 charts of 4 currency pairs with the fluctuations in their price is missing. On the left-hand side of the image, you can see the menu with the major currency pairs and their bid/ask price. From the bid/ask price for EUR/USD, we calculated the spread to be 0.3 pips. However, if you look carefully at the image containing the account types information, you will see that the spread can reach up to 2.5 pips. Spread which goes above 1 – 1.5 pips that is considered industry average, can add to the cost of trading which can prevent the trader from making a sustainable profit in the long run. In addition to that, this broker offers also high leverage which is 1:200. The possible implications are that traders may get tempted to trade using such high leverage which looks like a promise for a big win. What they might not know or the broker doesn’t want them to know is that around 70% of the traders make a financial loss in transactions. Therefore, the chances that they will lose are higher and using high leverage will amplify that loss. Please compare this leverage with the leverage in the EU which cannot exceed 1:30 and the leverage in the US which cannot exceed 1:50. As we explained in the previous section, keeping a cap on leverage helps protect traders’ funds. You are well-advised to select a licensed broker that offers low leverage.
ProfitFX Deposit/Withdrawal methods and fees
ProfitFX offers 3 different trading accounts – Starter, Pro and Prime. The minimum initial deposit for the Starter account is $100. The other accounts start at $1,000 and $5,000 respectively. We want to point out that although the minimum initial deposit of $100 doesn’t look like too much, compared to what licensed brokers ask for ($1-5), the difference is still huge!
The payment methods for deposit and withdrawals are the same and they include Neteller, Skrill, VISA, MasterCard and bank transfer. The minimum withdrawal is $100 and there are no fees on deposit or withdrawal, except for deposits via VISA and MasterCard which is 6%. Deposit processing is instant, except for banks transfers which can take up to 3-5 business days. For withdrawals, the request processing time is normally 1-2 business days, except for bank transfers which again can take up to 3-5 business days.
Interestingly enough, this broker does not have Terms and Conditions which represents every forex broker’s legal document. Therefore, we are not able to provide more information about financial methods and fees, i.e., dormant accounts, non-deposited funds, etc.
Please be wary of brokers that do not have Terms and Conditions document on their website. With licensed brokers, all the legal information in highly visible and easily accessible.
How does scam work?
A lot of people get scammed in different scammers’ schemes not because they are naive but because scammers are masters of persuasion and manipulation. It all starts with unsolicited telephone calls or a flashy ad on the Internet or social media. Sometimes people give up to temptation and invest money in shady schemes made to look legit and attractive and always promising quick and easy money fall. Once you deposit money into any of these schemes, you reach a point of no return! Your money is gone down the scammers’ food chain and you’ll have a lot of trouble recovering it. Scammers will do anything in their power to delay you, so you miss the opportunity to file for a chargeback. They will ask you for this and that document and will find hundreds of reasons not to let you retrieve your money. The trick with offering bonuses in forex trading is one of those as your funds are mixed with the bonus money and it takes a lot of hassle to fulfil the broker’s requirements before you are able to withdraw any funds.
What to do if scammed
Speed does it! You need to act very quickly if you want to recover your money. Immediately apply for a chargeback if you have made your deposit via credit card. Fortunately, VISA and MasterCard give you 540 days within which to apply for a chargeback.
If you have paid via wire transfer or Bitcoin, chances of retrieving your fund are grim. Anyway, we want to warn you that some of the so-called recovery agents may approach you and offer to retrieve your funds. For a fee, of course! Be cautious when dealing with them as it may be another form of scam! Always check if the recovery agency is legitimate and visible to the public!
Another thing we advise you to do is to immediately cancel any credit cards if the scammers have your CVV code. Also, make sure to erase any programs on your computer that give scammers access to your personal data on your PC.
