Beware! FxCitizen is an offshore broker! Your investment may be at risk.
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FxCitizen wants you to believe that it is your trusted partner. We look at some key features to see how much you can trust this broker.
FxCitizen Regulation and safety of funds
From the information provided on its website, we understand that FxCitizen is the trading name of Universe Citizen Limited with registration in Vanuatu. Our search in the Vanuatu Financial Services Commission (VFSC) register proved that this company is indeed registered in Vanuatu (image below). What we know about forex trade regulations in this offshore zone is that the initial capital requirement is $50,000 which also serves as a security bond with the local Registrar of the Supreme Court. Vanuatu is an attractive destination for forex brokers as the leverage that can be offered is practically unlimited and can easily reach 1:1000. However, this represents also one of the risks for clients’ funds as we are going to discuss further down in this review. Furthermore, there are no other measures set in place to protect clients’ funds and we advise you to refrain from trading with brokers from this jurisdiction.
Instead, we suggest that you direct your attention towards the licensed brokers in the well-established jurisdictions of the US, Australia, the EU and the UK where the measures for protecting clients’ funds are the best. For example, in all these jurisdictions clients’ funds are kept separately with tier-1 bank establishments and brokers must provide protection against negative balance and report transactions on a regular basis. In addition to that, a substantial amount must be deposited in the form of initial capital. For the US, the initial capital is the impressive amount of $20 million, in Australia, 1 million AUD and the EU and the UK, 730,000 EUR. Being well-capitalised is one of the measures of keeping scammers out as they won’t be eager to match this huge numbers just for the benefit of looking legit. Also, in the US and Australia, it serves as a means to protect clients in case of unfavourable events, as there are no compensation schemes or funds.
One of the biggest advantages in choosing a licensed broker from the EU or UK is the fact that they must participate in a local compensation fund or scheme which serves to compensate clients if their trader goes bankrupt. If the broker is regulated by CySec and deducts funds towards the local Investor Compensation Fund, then its clients will be repaid up to 20,000 EUR per client. In the UK the amount of recompense is much more impressive – up to 85,000 GBP per client but only if the broker is regulated by FCA and participates in the local Financial Services Compensation Scheme.
FxCitizen Trading software
The trading software that FxCitizen offers to its traders consists of MetaTrader 5 which is considered to be one of the well-reputed platforms and is quite popular with forex brokers. MT5 has some of the excellent key features its ‘older brother’ MetaTrader 4 is famous for, such as the auto trading option, code base with customs scripts, trading signals, VPS, an app market, a financial calendar, etc. It also has the same great charting package containing various charts, time frames, colours and even the option of creating customised templates. Its technical analysis indicators, such as Fibonacci retracement, Bollinger Bands, moving averages, etc., help traders predict the future direction of exchange rates and make a profit. When in 2016 a hedging option was added to it, MT5 became even more popular with brokers and traders alike.
However, a trading platform is as good as its broker is reliable, so we take a look at how the platform is set by this broker (image below). What you see on the left-hand side is the menu for the trading instruments with their bid/ask price. Beneath is the navigator for accounts, indicators, expert advisors, scripts and services. In the top horizontal bar, you see the buttons for placing new orders, algo trading and the charting options. In the middle are displayed charts of selected trading products and their number can vary according to the trader’s needs. In this case, you see displayed 4 charts of 4 forex pairs with the fluctuation in their price in a given time frame. If we take a closer look at the forex pair in the top left corner, EUR/USD, we can calculate that the spread for this pair is 0.8 pips which is below the industry average and is beneficial to traders as the cost of transactions won’t be too high and they will be able to make a sustainable profit.
However, as we already mentioned, the leverage offered by this broker can reach up to 1:1000 which is sky-high and presents risks for the safety of clients’ funds. On the one hand, it may look like high leverage amplifies the potential for making a big profit while using very little of the client’s money. On the other hand, it also increases the exposure to risks for the clients’ money in case of unsuccessful transactions which happens to 70% of the traders and can result in a significant financial loss.
We do not advise trading with such high leverage and must tell you that it is not by chance that leverage is capped in the EU and the UK at 1:30 and in the US, at 1:50 which is a measure to prevent traders from entering in reckless and risky trading activities where they can suffer big loss for their funds.
FxCitizen Deposit/Withdrawal methods and fees
The trading accounts available to the clients of FxCitizen consist of Cent Micro, Standard Mini, Premium Zero and Premium ECN (image below). The minimum initial deposits for the Cent Micro and the Standard Mini is $10. for the Premium Zero, the initial deposit is $100 and for the Premium ECN is $2,000.
The deposit and withdrawal methods are the same and payments can be made via bank transfer, credit card and PerfectMoney.
The minimum withdrawal amount for PerfectMoney is $10 with 2% fee on withdrawal amount and for bank wire, the minimum withdrawal amount is $100.
We have noticed that forex brokers from offshore zones, such as FxCitizen, normally offer bonuses to their clients. Bonuses are funds that belong to the broker, not the trader and their withdrawal is subject to some conditions which are not easy to fulfil. In this case, if the trader chooses to accept a bonus, he/she will have to trade a volume of 5 lots multiplied by the bonus amount. This is not something easily achievable even for more experienced traders. In contrast, licensed brokers never offer bonuses or other incentives and this is another way of protecting clients’ funds.
How does scam work?
Scam works in different ways. It could be either that you receive an unsolicited telephone call or you see one of these flashy ads on the Internet or the social media promising you a quick and easy profit. Scammers will promise you the sky and the earth until you give way to temptation and deposit money. Once you give them money you get caught in the scammers’ mousetrap and the cheese in the shape of a big fat money fall is gone! It may take some time before you realise that you are being scammed. Scammers are smooth talkers and they are masters of deception. They will give you some excuses as to why the big profit hasn’t come yet and will try to lure you to make even a bigger investment because according to them, the more you invest, the more you profit. After you have been waiting for a while and you finally come to your senses, you realise that you are being scammed. All you want now is to get your money back and get out of there. However, the scammers won’t make it easy for you! They will try to delay you so that you miss the deadline for applying for a chargeback.
What to do if scammed?
There are a few things that you must do immediately – file for a chargeback if you have paid using a VISA or MasterCard. Those two payment providers allow you 540 days time frame within which you may file for a chargeback.
However, the chances are grim if you have used bank transfer or Bitcoin as a payment method. There is no chance you’ll be able to recover your money.
In such a desperate situation, some so-called ‘recovery agents’ may approach you with offers to recover your money for a fee. Be cautious as you may be dealing with another type of scammers. Always check the information about the recovery agency – make sure it is legitimate and transparent in the public eye. Also, some scammers publish personal comments after our review about how they have been scammed and how they found a recovery agent who helped them get their money back. Do not trust such comments and do not use the published contact info in them as it will lead you to another scammer!
And lastly, a reminder to cancel your credit card if you have given your CVV code to the scammers and erase any software from you PC that gives the scammer access to your personal data.