Beware! Solid ECN 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.
Solid ECN is an offshore broker offering forex, commodities and cryptocurrency trading. The lack of regulations allows Solid ECN to offer very high leverage and bonuses to clients, but it also means a lack of guarantees and transparency. It is advisable to approach such brokers with caution.
SOLID ECN REGULATION AND SAFETY OF FUNDS
The company behind the broker, Solid ECN Securities LLC, is registered in Saint Vincent and the Grenadines (SVG). The company can indeed be found in the register of the Financial Services Authority (FSA) of St. Vincent and the Grenadines:
The presence of a registration in itself distinguishes Solid ECN from most of the websites we describe. The problem is that FSA does not regulate the activities of forex and CFD brokers. The institution has repeatedly issued warnings on this issue, with the latest such warning dated 23 June 2021:
Because of the lack of regulatory norms and oversight, Saint Vincent and the Grenadines is one of the favorite bases of operations for shady brokers. However, some major brands are registering subsidiaries in SVG or other offshore areas in order to compete more effectively in emerging markets in Asia and Africa. However, there is no big brand name behind the Solid ECN to serve as a guarantee of quality. So while Solid ECN may appear to indeed offer brokerage services, you can only trust their honest word.
Especially if you are just entering the world of financial markets, it is advisable to use the services of brokers operating in one of the established financial centres like the UK, EU, USA or Australia. There, the activities of brokers are controlled by powerful regulatory bodies such as Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC), Commodity Futures Trading Commission (CFTC) and Australian Securities and Exchanges Commission (ASIC). Clients of these brokers receive protections such as negative balance protection and segregation of the client’s funds from the broker’s funds.
In the EU and the UK, brokers must also participate in guarantee schemes that cover a certain amount of the trader’s investment if the broker becomes insolvent. These guarantees amount to up to 20 000 EUR in the EU and 85 000 GBP in the UK. However, the likelihood of such a bankruptcy is low because regulators also have significant net capital requirements that companies must maintain – EUR 730 000 in UK and Cyprus, AUD 1000 000 in Australia and at least 20 million USD in the United States.
SOLID ECN TRADING SOFTWARE
Solid ECN uses one of the most popular and advanced trading platforms, MetaTrader 5 (MT5). The software is available in versions for Windows, Linux, Mac, as well as Android and iOS mobile devices. Here’s what the desktop platform looks like:
MT5 or the still very popular MT4 have established themselves as industry standard because they offer a wide range of features, including a variety of options for customization, multiple account usage, designing and implementing custom scripts for automated trading and backtesting trade strategies.
MT5 does have some advantages over MT4 such as the Market Depth option, which features the volume of bids and offers for a financial security at different prices, as well as a built-in economic calendar. MT5 also has more technical indicators, graphic objects and time frames available.
SOLID ECN TRADING CONDITIONS
Solid ECN works according to the Straight Through Processing (STP) model and offers forex, metals, cryptocurrencies, commodities, energies, and indices trading.
Solid ECN offers four types of trading accounts – Micro, Standard, ECN and Holy. The latter is aimed at customers whose religious beliefs do not allow the use of interest. Because of this, the swap is replaced with a fee, but information on the exact amount of this fee is nowhere to be found.
In general, the information that can be found on the website or Terms and Conditions of the Solid ECN is quite limited, especially compared to the extensive legal documentation of regulated brokers. The account registration process is also extremely simplified, lacking the survey to establish the client’s trading experience that is typical of regulated brokers.
For a Micro Account, the advertised deposit is just 1 USD. For other accounts, a level of 10 USD is indicated. However, there is a disclaimer that depending on the payment method chosen, the minimum amount may be higher. You should keep in mind that there are also many regulated brokers that also offer accounts with a very low minimum deposit.
For a Micro account, a spread from 2 pips is specified, which is on the high side. In the industry, levels at and above 2 pips are considered disadvantageous to the trader. The Standard account promises a much lower spread from 0.3 pips, but when using a Standard account with the MT5 platform we saw higher levels of around 1.1 pips.
For the Holy account, a spread from 1 pip is indicated. The ECN account promises a Raw spread from 0 pip, but has a fixed fee of 0.2 pip. ECN accounts usually have a fixed commission per lot traded. If the spread is indeed near zero in practice, the ECN account seems to be the most favorable.
The biggest difference between offshore and regulated brokers is the leverage they offer. High leverage creates the opportunity for more significant profit, but correspondingly increases the risk of sudden and excessive losses. All leading regulators therefore restrict leverage for retail traders. In the EU and UK, the regulators limit leverage to 1:30 for trading in major currency pairs and even lower levels for more volatile assets. The same rules currently apply to Australia. In the US, the maximum limit is slightly higher at 1:50.
Solid ECN offers extremely high leverage of up to 1:1000. The broker claims to provide a negative balance protection, which in theory mitigates the risk of leveraged trading somewhat. But you should still approach high-leverage trading with caution, especially if you are using the services of offshore brokers.
Solid ECN also offers a deposit bonus of up to 40%. The bonus is tradable and the profits resulting from the bonus are withdrawable. Attracting clients through bonuses and promotions is a practice forbidden to regulated brokers.
SOLID ECN DEPOSIT/WITHDRAW METHODS AND FEES
Solid ECN allows the maintenance of a wallet in US dollars or Bitcoin. Depositing and withdrawing funds can be done through various cryptocurrencies and only one e-wallet – the Hong Kong-based PerfectMoney.
This selection does not inspire confidence. Cryptocurrency transfers are non-refundable and therefore favoured by shady businesses and scammers. While there are many regulated brokers that accept Bitcoin and other cryptocurrencies, they do so alongside other more transparent payment methods such as credit/debit card, bank transfer or popular e-wallets like PayPal, Skrill or Sofort.
The Solid ECN presents as part of its promotions the fact that it does not charge a deposit fee and absorbs all costs associated with customer transactions, although this is more or less standard practice.
With withdrawals, the picture is less clear. Firstly, there is no information on maximum amounts and fees when using Perfect Money. Only a cryptocurrency table is available. Upon withdrawal, a “miner’s fee” is charged, which is part of any cryptocurrency transaction. But it does not state what the current levels of this fee are.
If a customer wants to make a withdrawal without having made a trade, they may be charged the deposit fees originally covered by Solid ECN.
HOW DOES THE SCAM WORK
Many people are looking for ways to make money passively, but do not have the necessary knowledge to invest in the financial markets themselves. This makes them a target for the many online scammers posing as brokers. If you come across some of them and give them your contacts, you will be contacted by skilled scam artists who will assure you that they can take on the incomprehensible aspects of investing for you. You will only be required to invest and take profits.
But when you try to collect even just a fraction of your money, it will turn out to be impossible. Your supposed profits will suddenly evaporate, or you’ll find that you have to meet impossible traded volume requirements first. Fraudsters often insert huge withdrawal fees into client agreements amounting to 10%, 20% or even more. You won’t be able to hold scammers accountable because they hide behind fake names and shell-companies offshore. Scammers also typically use non-refundable payment methods.
WHAT TO DO WHEN SCAMMED
First of all, you should be very careful not to fall straight into the clutches of other scammers. Another common scam is to promise money recoveries from fake brokers for an upfront fee.
If you used a credit or debit card for the transactions, you can charge a chargeback. Visa and MasterCard have a long period in which they allow such requests – 540 days. But keep in mind that fraudsters can dispute if you have provided them with a copy of your ID and proof of address. It would also be helpful if you alerted the authorities in your country and other people online to the activities of the scammers.
