Beware! Faxtradefx is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
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A quick glance at Faxtradefx interface will tell you that this is a scammer par excellence. From the crazily high leverage to registration and technical mishap, everything shows that this broker is not to be trusted with your precious money. Here are the details.
Faxtradefx Regulation and safety of funds
Faxtradefx claims to have registrations in 3 jurisdictions – St. Vincent and the Grenadines, Malaysia and Hong Kong.
Let’s start with St. Vincent and the Grenadines (SVG). This is an offshore zone for forex trade without an official regulator for forex brokers which means that the information about registration in SVG is misleading.
Although forex brokers in Malaysia are not considered illegal, they are not formally regulated. Non-regulated forex brokers cannot provide a guarantee for the safety of their clients’ funds. Our advice is to stay well away from this broker.
Our third search with the Hong Kong Securities and Futures Commission (SFC), the official regulator for forex brokers in this jurisdiction. As you can see from the image below, Faxtradefx is not registered there.
It is obvious that being non-registered or non-regulated, Faxtradefx is not a trusted broker, therefore your hard-earned money will be at risk of disappearing without a trace should you choose to trade with this shady broker.
If you are looking to trade with Hong Kong forex brokers, we want to tell you that the SFC is a strict regulator and forex brokers must meet some strict requirements in order to get their license. First of all, they must maintain a minimum paid-up capital of the equivalent of $640,000 which is a serious amount of money and should keep scammers out. In addition to that, Hong Kong brokers must participate and deduct funds towards the local Investor Compensation Fund where the insured amount of trading capital is capped at $150,000 and covers trading in securities and futures contracts but not leveraged forex trading. In addition to that, Hong Kong forex brokers must include in their Terms and Conditions a clause according to which traders can claim damages if they have been sold or recommended financial products not reasonably suitable for them.
Another alternative is selecting a forex broker from the EU or the UK where the best trading conditions exist. To get their license, forex brokers in these jurisdictions must have an initial capital of no less than 730,000 EUR, keep clients’ funds segregated with top tier banks, provide negative balance protection, report transactions on a regular basis for the sake of transparency, etc. Similarly to their Hong Kong counterparts, these brokers also must participate in a compensation fund or scheme from which in case of bankruptcy their clients can be compensated. UK brokers regulated by FCA and participating in the local Financial Services Compensation Scheme will be able to provide up to 85,000 GBP per client reimbursement in case of bankruptcy. On the other hand, EU brokers who participate and deduct funds towards a local investor compensation fund will be able to ensure that their clients get up to 20,000 EUR per client if the broker becomes insolvent.
Faxtradefx Trading software
Faxtradefx is a forex broker trading in forex, metals, energies, indices, commodities, stock and cryptocurrencies. If you look at the interface, you will see that the trading software that is offered to the clients consist of a web trader, MetaTrader 4 and MetaTrader 5 platforms. First of all, the link for the web trader is broken and does not open this platform. Secondly, if you try to download the MetaTrader 4 platform, you will find out that actually, it is the MetaTrader 5 MetaQuotes platform and not what the broker promised. Lastly, we managed to open the MetaTrader 5 trading platform. However, without depositing funds the platform is unactivated but gives an accurate idea about what MT5 looks like.
On the left-hand side is the menu with trading products given their bid/ask price and beneath is the navigator for the accounts, indicators, expert advisors, scripts and services. In the middle is displayed the chart of one of the trading products, namely the EUR/USD currency pair with the fluctuation in price in a given time frame. We must point out that the number of charts displayed depends on the trader’s needs and may vary from one to many. MetaTrader 5 along with MetaTrader 4 is famous for the variety of charting options offered to the traders that contain many charts, time frames, colours and even the option of creating customised templates. Other advantages of the MT5 consist of the excellent package of trading tools and instruments that are located in the top and bottom horizontal bars. We want to mention the algo trading option, VPS, code base with customs scripts, trading signals, an app market, a financial calendar, etc. When in 2016 the hedging option was added to the platform it became even more popular with brokers and traders alike.
However, a platform is as good as its broker is reliable. If we look at the EUR/USD currency pair’s bid/ask price, we can see that the spread is 0.8 pips. Such spread is good because the cost of transactions won’t be high and traders will be able to achieve a sustainable profit. However, what worries us is the sky-high leverage which can reach up to 1:2000! Let us tell you that only a scammer will offer such high leverage in the hope that its clients will get tempted and risk their funds. As statistics show, 70% of traders lose in transactions, so what would happen if you use such high leverage and execute unsuccessful transactions? The scope of your financial loss will be amplified by this high leverage. It is not by chance that some well-established jurisdictions have imposed limitations on leverage and in the EU and the UK it cannot exceed 1:30 and in the US, 1:50. Compare with the leverage offered by Faxtradefx and you will see who really cares about your funds and wants to protect them.
Faxtradefx Deposit/Withdrawal methods and fees
Faxtradefx offers 4 trading accounts – Starter, Basic, Pro and Executive. The minimum initial deposit for the starter account is $500. This amount is rather high compared to what licensed brokers would ask for, i.e., as little as $1-5. The other accounts start at $1,000, $5,000 and $10,000 respectively.
The information provided on the company’s website differs from the options available once you open your trading account. On the website, we see as payment methods PerfectMoney, Neteller, MoneyGram, credit card, Western Union, Skrill, WebMoney, Fasapay, bank wire. However, once you open your trading account and want to make a deposit, you see that the only payment option is via Bitcoin wallet. Obviously, Faxtradefx is misleading its potential clients by providing false information.
Similarly to other non-registered forex brokers and scammers, Faxtradefx also offers bonuses. You may know that bonuses are funds belonging to the broker, not the trader and usually they are subject to hard to fulfil conditions. In this case, to be able to withdraw the bonus amount, the trader must in a period of 60 days execute a trading volume equal to 20,000 times the bonus amount. This is not something easily achievable even for experienced traders. Should you be tempted to accept a bonus from a dodgy broker, beware that it will create a real mess with your funds and withdrawal options. Also, remember that legit brokers do not offer bonuses or 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.