Beware! OTXforex is an offshore broker! Your investment may be at risk.
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There is nothing remarkable or memorable on the OTXforex interface covered with standard infographics and it looks like just any run of the mill forex broker. What is hidden behind the bland appearance, we are about the find out.
OTXforex Regulation and safety of funds
From the company’s website, we find out that it is operated by Oxford Ventures LLC with address in St. Vincent and the Grenadines (SVG). We must tell you that St. Vincent and the Grenadines is an offshore zone for forex trade and a year ago the Financial Services Authority in that country issued an official warning that it does not regulate forex and CFDs brokers. This means that OTXforex is not licensed and is possibly a scammer, so you should be on your guard.
Selecting an unlicensed broker from an offshore zone is risky as there is no guarantee for the safety of your funds and our advice is to avoid such brokers. If you are looking for a reliable, licensed broker why not explore the links we provide below that contain lists of regulated brokers from the well-established jurisdictions of the EU, the UK, the US and Australia. In our opinion, the best conditions to traders are offered by the licensed brokers in the EU and the UK. To provide safety for clients’ funds and guarantee that no scammers will be able to sneak in, there are rigid requirements set in place. For example, forex brokers in these two jurisdictions must have an initial capital of no less than 730,000 EUR and they must contribute to a compensation fund or scheme. In case of bankruptcy, traders can be compensated and they can get up to 85,000 GBP per person if the broker is regulated by FCA and contributes to the Financial Services Compensation Scheme. If the broker is regulated by CySec, then its clients can get compensation of up to 20,000 EUR per person but only if said broker deducts funds towards the local Investor Compensation Fund.
In the US and Australia, forex brokers are not obliged to contribute to compensation funds. However, in these two jurisdictions, forex brokers must be well-capitalised to be able to protect their traders in case of unfavourable events. In the US, the amount of initial capital that forex brokers must deposit in order to be licensed is $20 million. In Australia, it is 1 million AUD.
All forex brokers are obliged to report their transactions on a daily basis, maintain a cap on leverage and no offer bonuses.
All these measures are set in place to protect traders and their hard-earned money and prevent them from entering risky and reckless trading actions. We strongly advise you to select your broker from the ones we recommended for your own peace of mind.
OTXforex Trading software
OTXforex is a forex broker trading in forex, energies, indices and metals. The trading software is the MetaTrader 5 platform which is considered to be one of the best platforms in forex trade and is gaining more and more popularity among forex brokers especially after introducing the hedging option in 2016. It has the same great charting package as its ‘older’ brother MetaTrader 4 that provides traders with choice of different chart types, time frames and colours and even the option of creating trader’s own templates. Also, it is equipped with an array of technical analysis indicators, such as moving averages, Fibonacci retracement, Bollinger Bands and others that help traders predict the future direction of exchange rates and make a profit. Among other advantages of MT5 are the auto trading option, VPS, trading signals, an app market and a financial calendar. However, a platform is as good as its broker is reliable, and here is not the case.
We are not able to provide you with an image of the platform as the waiting period for a trading account to be verified is 24 hours. However, we got a good idea of what the parameters set by this broker are. If you look in the account types information image below, you will notice that the spread varies from 0 pips to 1.5 pips depending on the account type. We must say that the spread is within normal limits and will keep low the cost of transactions. On the other hand, the leverage is too high and can reach up to 1:500. High leverage implies two things – a big win or a big loss. Traders may get tempted about the promise of making a big win as high leverage adds more trading power. However, you should keep in mind that around 70% of transactions end in financial loss. As you can see, chances are that instead of making a big profit you will end up with a big financial loss. To prevent traders from engaging recklessly in risky transactions with high leverage, licensed brokers are banned from offering leverage higher than 1:30 in the EU and 1:50 in the US. Australia, the paradise where traders can still enjoy high leverage will also impose a cap on leverage in March 2021 and it will be 1:30 for major currency pairs.
OTXforex Deposit/Withdrawal methods and fees
If we look at the image below, we’ll see that OTXforex offers 4 different trading accounts – Micro, Standard, ECN and VIP. The minimum deposit amount for the Micro account is $100. Although it doesn’t seem too high, we want to let you know that some licensed brokers will ask for as little as $1-5. The other trading accounts start at $200, $1,000 and $5,000 respectively.
An account that stays inactive for more than 90 days will be deemed dormant and a monthly fee of $20 will be charged.
We must say that reading the over 70 pages Terms and Conditions document was a tedious job. However, we want to advise you to always read such legal documents carefully as it may affect how your funds are handled. We were very alarmed when we found the statement (image below) that the client’s funds may be put together with other clients’ accounts and can be used by them which will undoubtedly affect receiving full entitlement. We don’t think that anyone who cares about their funds will accept such conditions!
Another sign that this broker is not reliable is the fact that it offers different bonuses. For example, there is the 100% Welcome bonus when the trader makes a first deposit of $200 or more. Accepting such a bonus will add more trading power, however, it cannot be withdrawn. For example, if the deposit is $1,000 then the 100% Welcome bonus will also be $1000. If the client makes a profit of $500, then he/she is eligible to withdraw $1,500.
The broker offers also a 30% Tradeable bonus under the condition that the trader must trade 30 lots before being eligible to withdraw the bonus amount. It looks like a lot of trading must be done which is not so easily achievable. Our advice to you when it comes to bonuses is not to accept them and, in general, to stay away from brokers that offer them. Also, keep in mind that licensed brokers never offer bonuses and that is the difference between them and unreliable brokers or scammers.
How does scam work?
If scammers make a movie, it will probably be called “Dream on”. They make everything sound credible and build their scam on your dreams of getting an easy and quick profit. People get duped if they decide to deposit money into one of the scammers’ schemes. What you probably do not know is that your hard-earned money goes as commission to the scammers. Next, you get inundated by daily calls. First, the scammers congratulate you for joining their business, next they try to persuade you to invest even more money. After all, the more money you send, the bigger money fall you can expect. This of course is not how things work. By the time you realise that no money is coming your way, it might be too late. All you want now is to get your money back and get out of there but the scammers have other plans for you and they won’t late get away so easily. Now they try to delay you so that you miss the deadline for a chargeback.
What to do if scammed?
If you get scammed, our advice is to act immediately and if you have paid your deposit via credit/debit card you may still have a chance. Visa and MasterCard allow you 540 days time limit to file for chargeback which gives you a fighting chance to recover your money.
However, if you have used bitcoin or bank wire for your payment, the chances of you recovering your money are really slim.
Cancelling your credit/debit card in case you have given the scammers your CVV code may be another good idea. Also, make sure to remove from your PC any software that my give scammers access to your private data stored on your computer.
Whatever you do to recover your funds, beware of the so-called recovery agents. Please make sure that you are dealing with a genuine one by checking their credentials and company’s information transparency. Otherwise, you may fall victim to another form of scam.