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17 Reasons to Leave Your Forex Broker

From time to time, conditions at a broker change. Some companies update their trading platforms, others let their customer service to deteriorate, many brokers change their trading conditions due to some new regulatory environments, and so on. Some of such changes can go unnoticed for traders, some will cause a minor nuisance, but other such changes will cause some traders to leave the broker and start searching for a new one. The list below aims to provide an overview of the hypothetical reasons to abandon your broker.

  1. Withdrawal delay of several days. If a broker advertises fast withdrawals within 24–48 hours, but you are waiting for a week to get your hard-earned profit from them, then something is really wrong with the company. Perhaps, it is not critical — after all it could be just some bureaucratic error. However, traders, like any other people, prefer to get their money on time, and any delay in withdrawals may cause emotional and material stress. Many traders often experience such delays with brokers, they rarely leave brokers due to it. Perhaps, because the delayed withdrawals are normally just an exception and not the rule.
  2. Slow deposit processing. When you deposit money into your trading account, you expect fast execution. Especially if you are doing it to open a particular trade at a particular time. Any delays in the process may be detrimental in this case. Fortunately, the majority of brokers process deposits very fast to let the customers start trading as soon as possible.
  3. Change of a trading platform. Adding a new trading platform is often seen as an advantage for a broker. Unfortunately, it is sometimes added in place of some other platform that traders have already got used to. Many traders would freak out if their broker forcibly changed MT4 to MT5 for example.
  4. Forced FIFO execution. FIFO (first in, first out) execution model can be a killer to most people's trading strategies and make a lot of expert advisors unworkable. The good thing, this does not happen often. A likely scenario is that your broker is bought by some US company, which enforces its US trading rules on global customers. Another possibility is some other country making FIFO standard compulsory in retail Forex trading.
  5. Increased minimum trade size. When a broker decides that it should move away from smaller customers and encourage bigger trading volumes, it may decide to increase the minimum tradable lot size. That is definitely a bad thing for traders, but it is hardly a disaster unless you cannot afford trading at a new minimum. Another big disadvantage is that you lose position sizing flexibility, which is a requirement for a prudent money management strategy.
  6. Increased stop-out level. Stop-out level is the ratio of your account's equity to your used margin that triggers a forced closure of your positions. Higher stop-out level makes it harder to maintain big positions when the market moves against you. It can be critical in many situations and with a lot of strategies, especially those that shun stop-loss. Normally, if you are not engaging in some risky trading experiments, and the broker is not rising stop-out level above 100%, an increase in this level will not hurt you. Otherwise, it is a good reason to start seeking another company to trade with.
  7. Higher spread/commission. The current multi-year trend for spreads on major currency pairs is down. A lot of brokers are popping up each year — the competition gets higher — brokers compete by reducing their spreads. But sometimes, it happens so that a broker will increase spreads — perhaps, only for some particular currency pair. If you are a long-term trader, a slight increase in spread will probably go unnoticed. However, day traders and, especially, scalpers will be hurt even by a minor spread hike. For them, it might be a sufficient reason to find a cheaper broker.
  8. Lower leverage. It can be implemented as a part of regulatory limitation, as a temporary mean to discourage trading in some pairs (see EUR/CHF in early 2015), as broker's general policy, or as a restriction applied to a particular trader or a group of traders. Whatever the reason, the trader gets higher margin requirement to hold and open positions. If you rarely use full leverage, then this change will probably go unnoticed for you. Traders who open a lot of positions and linger on the verge of a margin-call will weep.
  9. Removal of your favorite trading instruments. This is rather simple. If you trade with a broker because it offers EUR/CZK, there is not much sense in continuing to be its customer if EUR/CZK is no longer available. Of course, if you trade majors, it is unlikely that the broker will stop offering them. However, if you trade some exotic or even minor pair (again, think of EUR/CHF in early 2015), that could be quite a possibility.
  10. Removal of your favorite payment option. The way you deposit and withdraw money from a broker plays a huge role — it affects the size of fees and commission, the speed and security of transfer. Also, some ways may be plainly unavailable to some groups of traders. If a broker offers a lot of convenient payment options that you can use and only removes one of them, it is not a big problem. Let's say if a broker has only wire transfer and Neteller and suddenly removes the Neteller option, you are left with no choice — just a wire transfer — which is slow and expensive. In that case, it might be a good idea to switch brokers.
  11. Evidence of stop-hunting. Stop-hunting is brokers' practice of making the price go to the trader's stop-loss level. It is illegal and leads to quick losses. It is worth staying away from a broker that practices stop-hunting even if I traded without stop-loss. An important thing to note would be that if your stop-losses are hit often, it does not necessarily mean that your broker hunts for stops — in 99% of cases, it means that your stops are inadequately tight compared to the current level of market volatility.
  12. Slower connection or execution speed. Even if you are not relying on high-frequency trading, slower connection and lagged execution of trades is generally a bad sign from a broker. It means a lack of attention to its infrastructure and a failure to provide stable and adequate trading conditions. If the speed problems continue for more than a few days, it is totally justified to seek another trading company. Though there is one thing to check first — whether the connection speed problem is not on the trader's end actually.
  13. Website unavailable for more than few hours. Brokers set their websites into maintenance mode whenever they have to update something. They may warn about it beforehand or not. They may still provide some limited customer support during the maintenance periods or not. When everything is predictable and convenient, traders are less likely to get annoyed by the website's unavailability. Sometimes, brokers' websites get DoSed, hacked, get full of errors due to poor care, or simply disappear. In any case, not being able to log into your trading cabinet, manage your account, deposit or withdraw funds, etc. for more than a day or two will probably force anyone to look for another broker.
  14. Poor quality of customer support service. It is something that traders rarely forgive. The fact that you need to use the customer support service is already revealing that something is not right — either there is a lack of information and its availability to traders, or there is some problem that has to be solved. In this case, if a trader is not treated well — from customer service unavailability to significant delays in response to providing unhelpful solutions — the trader becomes upset. If the pattern is repeated, the customer is lost. Trader falls asleep due to slow customer support service
  15. Annoying calls asking to deposit/trade more. When you open a live account at a broker, you have to provide some contact information to the company. Even opening a demo account sometimes requires filling a registration form with your contact details. Some brokers try to take full advantage of that and start bugging the hell out of you by calling and sending emails urging you to deposit more or to trade more. It can be really annoying but it can hardly be called a major obstacle in business relations with a broker.
  16. Scam warnings on review websites. If you are frequent visitor to Forex forums and social network communities, you can often see bad reviews about many brokers posted by members. Sometimes, such reviews are legit, sometimes, they are crafted by competitors. Nevertheless, it is useful to pay attention to such warnings when they appear online about the broker you use. The wise thing is to analyze the complaints and make sure that they are genuine by looking at how the broker's representatives are responding and what evidence is provided by both sides. Of course, you should try to withdraw all your funds from the company if you are certain that it is not playing fairly.
  17. Warning by a regulatory organization. Such regulatory institutions as FCA, NFA, or CySEC issue warnings about companies that attempt to operate in their jurisdiction without obtaining a proper license. While it does not necessarily mean that such a company is some sort of a scam operation (for example, a normal offshore broker soliciting US clients is not a danger to its non-US customers), it is definitely worth looking into and investigating a bit. In case when the broker is claiming to be regulated by some institution but the latter is alerting about the opposite, you better run with your money.

You can use our forum to share your experience of leaving a Forex broker due to some problems in its trading conditions or operation.

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