Beware! TradeLax 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.
Judging by the messages conveyed through the interface of TradeLax website, one day this broker may win Mis or Mister Popularity award by being welcoming and inclusive of all traders. We were moved to tears when we read the following: “Tradelax will hold your hand throughout your time on the platform.” We can’t wait to find out more about this forex broker!
TradeLax Regulation and safety of funds
First of all, TradeLax took us on a jolly ride around the globe! As there is no address whatsoever on this company’s website and only phone numbers for 6 different countries, we had to check country by country whether this broker exists in any of the registers of the financial services authorities for each country. Guess what – in all 6 countries there is no trace of this broker. It’s like it doesn’t exist. Oh, wait, could we perhaps be dealing with a scammer? Red flag!
If a broker is not registered and regulated by the financial services authority in the country where it address is, then we have sufficient ground to think that we are dealing with a scammer. In such cases, it is not advisable at all to invest funds with such brokers. On the contrary, you should avoid them like someone coughing next to you in a COVID-19 situation.
And is you are wondering how to find a legit broker, we are here to help. First of all, you need to select one of the well-established jurisdictions around the world and then do some research on the brokers there. Each jurisdiction offers some advantages to the forex traders, so you just need to see what works best for you. Also, your priorities should be to what extent the regulations in said jurisdiction provide protection for your funds. So, let us begin. In the jurisdictions of the US and Australia, licensed brokers must provide the highest amounts in the form of initial capital. In the US it is $20 million and in Australia, it is 1 million AUD. On the downside, these jurisdictions do not have compensation schemes or funds from which to compensate the traders if the broker goes bankrupt. However, with capitals so huge, they are well-equipped to protect traders in case of unfavourable events.
In contrast, in the EU and the UK, the initial capital that is required of licensed brokers is lower – only 730,000 EUR. However, the brokers in these jurisdictions must contribute to existing local compensation schemes. If the forex broker if regulated by FCA, then its traders can be compensated by up to 85,000 GBP per person in case of bankruptcy. If the broker is regulated by CySec and contributes to the local Investor Compensation Fund, then its traders can be compensated up to 20,000 EUR per person.
These are not the only measures to protect forex traders. In all well-established jurisdictions we mentioned so far, brokers must report their transactions on a daily basis for the purpose of providing transparency and avoiding shady deals. There is also regulation on the leverage brokers can offer and they cannot exceed 1:30 in the EU and 1:50 in the US which helps reduce the risks of jeopardising their funds. Only in Australia, high-stakes adrenaline junkies can enjoy high leverage but not for too long because as of March 2021 Australia will also introduce a cap on leverage that will match the one in the EU.
TradeLax Trading software
TradeLax’s trading software is a browser-based platform (screenshot below). On the left, you see the forex currency pairs with their bid/ask price. In the middle, the display shows the chart of the EUR/USD currency pair and its fluctuation within a selected time frame. In the far right, there are some news article regarding forex trade. From the bid/ask price, we can calculate the spread to be 3 pips which is above the industry average and not beneficial to the trader. High spread increases the cost of transactions and the traders will not be able to make a sustainable profit in the long run.
As you can see from the image of the trading platform offered by TradeLax, this is a rather basic one that does not offer many trading tools and instruments. On the other hand, there are other trading platforms that offer many more options for trading experiences and that are very popular with forex brokers. We are talking about MetaTrader 4 and MetaTrader 5 trading platforms. They offer a lot of advantages compared to the TradeLax’s platform. For example, they come with an auto trading option, VPS, an app market, trading signals, code base with scripts, a financial calendar, etc. Their charting package is also out of this world and contains different analytical tools to predict the future directions of the exchange rates and make a profit.
Of course, a trading platform is as good as its broker – if the broker is licensed, then the features of the trading platform will be good as well.
TradeLax Deposit/Withdrawal methods and fees
TradeLax offers Starter, Advanced, Expert, VIP and Islamic accounts. The minimum initial deposit for the Starter account is $250. There is no information about what the initial deposit amount for the other account is. If the payment method for making a deposit is via wire transfer, then the minimum amount to be deposited is 500 EUR/GBP. To feed an account, clients can use credit cards or wire transfers.
There are some restrictions on withdrawals as well – the company will charge fees on withdrawals depending on the payment method used. A fee of 20 EUR/GBP will be charged if the withdrawal is requested directly to a bank account. The minimum withdrawal amount for bank wire transfer is 500 EUR/GBP and the minimum withdrawal amount via credit card is 50 EUR/GBP. Withdrawal processing time can be between 5 and 7 business days.
Trading accounts that stay inactive for 3 months will be charged 50 EUR/GBP dormant fees.
As you can see, these are not ideal deposit/withdrawal method conditions – this broker charges too many fees, the minimum initial deposit amount is high compared to what licensed brokers ask and the withdrawal processing time is too long.
We suggest that you look for a licensed broker that will offer you better conditions.
Similarly to other non-legit brokers, this one also offers bonuses and other one-time credits. Potential traders not familiar with the pitfalls of bonuses may think that this is a good deal. However, they can’t be more wrong! Bonuses come with heavy to fulfil requirements that can mess up your funds and withdrawal options. This one, requires traders who accept a bonus, to execute a minimum trading volume of 30 times for every 1 EUR/GBP of bonus received. On the other hand, the client cannot withdraw more than 50 EUR/GBP from the withdrawable winnings when credited as a single promotion. If the client wants to withdraw funds from his/her account before fulfilling the bonus conditions, then a penalty will be applied depending on the existing trading positions and all profits gained in these transactions will be cut.
We hope that the above information about the bonuses offered by this broker will make you think twice before accepting any bonuses in the future. Please be aware that licensed brokers never offer bonuses and that is a distinctive characteristic between non-legit brokers/scammers and legit brokers.
If you read carefully the next two sections of our review, you will see that we mention chargeback as a possible option to get some of your funds back if scammed. You need to be aware that if you decide to trade with this broker and later on apply for chargeback, then the company may charge you an administrative fee of the total of the chargeback that may be levied by your credit card provider. This means that you won’t be able to get your funds back as they will be withheld by the broker in the form of an administrative fee.
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.