Beware! Exerlo 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.
By showing the usual amount of images referring to forex trade Exerlo wants you te believe that it will lead you to financial success in just 3 easy steps. However, what this online broker does is setting a mousetrap for potential and unsuspecting traders. Here are the details.
Exerlo Regulation and safety of funds
When selecting a forex broker to trade with, the first thing you must do is check its registration and find out whether it’s regulated. Affort Projects S.A, the company that owns and operated Exerlo claims to be registered in Seychelles. We checked the register of the Seychelles Financial Services Authority (FCA) to see if the company exists in its register. From the image below, you can see for yourself that it does not. This means that this broker is non-registered and non-regulated, therefore it is illegitimate and trading with it will put your funds at risk.
The requirements for Seychelles brokers are that they must have a share capital of at least $50,000. However, this capital can be used for the day to day business activities and does not need to stay in the bank. Also, brokers can use the same bank account to store clients’ money which means they will not be segregated from broker’s. This is not to clients’ advantage and presents risks of losing their precious money. This is the reason why we do not recommend trading with forex brokers from this offshore zone even if the broker is registered there.
There are some well-established jurisdictions from around the world that offer far better trading conditions. For example, in the EU and the UK, forex brokers are strictly regulated and they must meet some stringent conditions to get their license. They must have an initial capital of no less than 730,000 EUR, keep clients’ funds segregated from their own with top tier banks, provide negative balance protection, keep leverage up to 1:30 for forex currencies, report transactions on a regular basis and regularly conduct internal and external audits. One of the biggest advantages in trading with EU and Uk brokers is that they must participate and deduct funds towards a compensation fund or scheme from which if the broker goes bankrupt they can be reimbursed. UK brokers regulated by FCA must participate in the local Financial Services Compensation Scheme which can provide up to 85,000 GBP per client if the broker becomes insolvent. Regulated EU brokers participate in a local investor compensation fund that can repay up to 20,000 EUR per client if the broker declares bankruptcy.
Exerlo Trading software
This image below shows you the trading software offered by Exerlo which consists of a web trader with limited functionality and a third-party chart developed by TradingView. The platform offers an order book that contains a list of orders and records the interest of buyers and sellers which helps traders decide which order they can execute. Below the chart are the buttons for selecting the asset and the time in which the order is to be executed via the buy or sell buttons.
The platform does not provide the bid/ask price of the trading product from which to find out the spread. In the company’s documents, however, we found out that the maximum leverage is 1:100. Such leverage is high and it will expose clients’ funds to risk as the scope of financial loss in unsuccessful transactions will be amplified by the high leverage. As we mentioned in the previous section, regulated brokers in the EU and the UK have limitations on the leverage they can offer and for forex currencies, it is capped at 1:30. For the US, the leverage is capped at 1:50. These are measures to prevent clients from entering reckless and risky transactions where they can suffer big financial loss.
We must tell you that a web trade is no match to the far more superior trading platforms, such as MetaTrader 4 and MetaTrader 5 that reputable brokers usually offer to the traders. Both platforms offer many advantages, such as an auto trading option, trading signals, a code base with customs scripts, VPS, an app market, a financial calendar, etc. A key feature for both platforms is the variety of charting options that contain many charts, time frames, colours and even the option of creating customised templates which combined with the technical analysis indicators help traders predict the future direction of exchange rates and make a profit.
We strongly recommend selecting a licensed and reliable broker that offers either MetaTrader 4 or MetaTrader 5 for your enhanced trading experience.
Exerlo Deposit/Withdrawal methods and fees
If you look at Exerlo website, you will see that there 3 trading accounts – Bronze, Silver and Gold. The account section does not show what the minimum initial deposit for each account is. However, the Terms and Conditions document says that the minimum funding amount is 5,000 EUR/USD. This is a very high amount for the initial deposit. If you look up the links for reputable and high-ranking brokers which we provided above, you will see that they may ask for as little as $1-5.
The interface of the company shows that the payment methods for deposit and withdrawal are Bitcoin, Neteller, bank transfer, Skrill and PerfectMoney. However, the platform lets you pay only via Bitcoin wallet and bank wire. Please note that deposits made via credit card incur a 5% commission which is rather high and for payments made via bank transfer, the fee is $50.
We noticed that withdrawals are subject to many conditions and fees. The minimum withdrawal amount is $50. In order to qualify for a withdrawal, the client must turn over at least once the deposited funds. This applies to any subsequent deposits made. Also, withdrawals made via wire transfer will bear a $50 transfer fee.
Similarly to other non-legit brokers, this one too offers bonuses which are funds belonging to the broker, not the client and are subject to some hard to fulfil conditions. In this case, to be eligible to withdraw the bonus amount, the trader must execute a trading volume that is equal to 20 times the sum of the deposit and the bonus amount. This trading volume must be executed within 3 months of receiving the bonus. The company warns that any profits made as a result of the use of the bonus amount can be cancelled at its discretion. As you can see from the conditions accompanying the receipt of a bonus, they may cause clients a serious headache and create a real mess with their funds and withdrawal options. We always advise our readers against accepting bonuses and tell them that licensed brokers never offer bonuses or other incentives.
How does scam work?
Actually, it’s quite simple and people often fall into the trap of experienced scammers. We bet you have seen those attractive ads on the Internet promising big and quick profits over a short period of time. Just provide your personal information, and voila! The scam brokers are waiting for you and you will be inundated with phone calls promising easy profit. Tempting, right? You think ‘ok, I can spend $200-300 and see what profit it brings me’. Congratulations, you just provided a fat commission for your scammers that will be distributed down the food chain. Now you have ‘graduated’ to be handed over to a senior ‘broker’, a smooth talker who will try to convince you that there is no more perfect time like now to invest more money. After all, you want to make more profit, right? However, something starts to feel off and now you start asking yourself questions and all you want is to withdraw your money and get out fast.
Unfortunately, it is too late! Someone has pulled the cheese and you are trapped because scammers don’t give up easily. Scammers will do anything in order to delay you so that you miss the deadline for a chargeback.
What to do if scammed?
Our advice is to immediately file for a chargeback if you have been lucky enough to make your deposit via credit card. VISA and MasterCard allow for 540 days chargeback period, so you still have a chance to get your money back.
Things don’t look so good if your currency of choice has been Bitcoin or bank wire. In that case, you may have to wave your money goodbye.
There are some other things that you can do in case of being scammed – cancel your credit card if you have given your CVV code to the scammers. Also, erase any software from your computer that gives scammers access to your private data.
Be warned, as well, that some so-called ‘recovery agents’ may approach you promising to recover your funds for a fee. It could be another form of scam where scammers prey on your misfortune. Should you choose to use one, you must make sure that you are dealing with a genuine and legitimate agency by checking their credential and company’s information and transparency.