How honest brokers put a spoke in the wheel for traders



Everyone wants to make money – both a trader and a broker. In an ideal system, cooperation between these market participants should be mutually beneficial, but there is no ideal. Traders are looking for ways to circumvent the trading conditions of a broker, brokers establish veiled rules that allow you to legally receive a trader’s money. And it’s not about “kitchens”.

Reviews of the confrontation between traders and brokerage companies can be seen even in relation to large brokers with a good reputation. In many ways, the fault lies with the traders themselves, who do not delve into trading conditions and trading rules. But there are also prohibitions of brokers that prevent traders from fully earning money.

What you need to know about broker bans

  1. Spreads… This is more likely not a prohibition, but a manipulation. A floating spread tends to widen at times of high volatility. The only question is whether the broker does it artificially.
  2. Trading conditions… The broker’s prohibitions and restrictions may relate to the minimum stop length. For example, at least 2 points. There are also restrictions on the number of requests sent to the server. These are restrictions for Expert Advisors.
  3. Leverage… Do you see leverage up to 1: 1000 in trading conditions? Do you really think you can use it easily anyway? Alas, disappointment awaits you. The leverage is determined by the specification of the contract. And for some reason, traders forget to look into it, limiting themselves to the offer and trading conditions. And the leverage is indicated in it. And if the leverage for EUR / USD can really be up to 1: 1000 with the right to choose, then in stocks it will be 1:10 without the right to choose. For more details, see the Leverage Pitfalls review. But this is not all possible adventures.
  • A real example from the life of a trader. Before the weekend, a position was opened with a leverage of 1: 1000. The calculation was based on leverage in order to minimize the brokerage collateral. The volume of the leveraged position corresponded to the rules of risk management – taking into account the average daily volatility, the risk of catching a stop-out was minimal. Nevertheless, on Monday morning, trades were closed by stop. Debriefing showed that the broker unilaterally reduced the leverage to 1:10. Accordingly, the margin increased and trades were closed by stop. Attempts to solve the problem with the support service have led nowhere. The broker referred to the possibility to unilaterally reduce the leverage before significant events that “accidentally” occurred over the weekend. True, the broker reserved the right to determine the degree of significance of the event. This means that at any time a trader can be left without leverage and catch a stop-out.
  1. Money withdrawal… Another prohibition of most brokers regarding the prevention of money laundering. A trader can withdraw money only to the account from which the deposit was made. It is not uncommon for a trader to lose access to this account: he lost his password, changed the account itself. Occasionally it was possible to solve the problem of replacing the account, but with “big battles”. It is difficult to say where brokers have such a ban. Regulation is just an appearance (especially offshore). Deposit and withdrawal – through e-wallets, which are practically not subject to verification. Tax is generally a dark forest. What kind of opposition can we talk about? But for brokers, this is another legal reason to block traders’ money.
  2. Bonuses… Here the broker’s prohibitions relate to the rules of their use. The procedure for trading with bonus and personal funds is sometimes so confusing that a trader prefers not to delve into it. But in vain. The first mistake is a violation of the rules established by the broker, after which the bonus is immediately reset to zero, often with the money earned at his expense. The second mistake – after zeroing the bonus, it turns out that the bonus was just a picture, and trading was carried out at first for personal money. And it is difficult to blame the broker for such manipulation – who is to blame for the fact that the trader does not delve into the rules?

These are the most common pitfalls. If you are still familiar with the limitations and manipulation methods of brokers, share them in the comments!

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broker bans

Everyone wants to make money – both a trader and a broker. In an ideal system, cooperation between these market participants should be mutually beneficial, but there is no ideal. Traders are looking for ways to circumvent the trading conditions of a broker, brokers establish veiled rules that allow you to legally receive a trader’s money. And it’s not about “kitchens”.

Reviews of the confrontation between traders and brokerage companies can be seen even in relation to large brokers with a good reputation. In many ways, the fault lies with the traders themselves, who do not delve into trading conditions and trading rules. But there are also prohibitions of brokers that prevent traders from fully earning money.

What you need to know about broker bans

  1. Spreads… This is more likely not a prohibition, but a manipulation. A floating spread tends to widen at times of high volatility. The only question is whether the broker does it artificially.
  2. Trading conditions… The broker’s prohibitions and restrictions may relate to the minimum stop length. For example, at least 2 points. There are also restrictions on the number of requests sent to the server. These are restrictions for Expert Advisors.
  3. Leverage… Do you see leverage up to 1: 1000 in trading conditions? Do you really think you can use it easily anyway? Alas, disappointment awaits you. The leverage is determined by the specification of the contract. And for some reason, traders forget to look into it, limiting themselves to the offer and trading conditions. And the leverage is indicated in it. And if the leverage for EUR / USD can really be up to 1: 1000 with the right to choose, then in stocks it will be 1:10 without the right to choose. For more details, see the Leverage Pitfalls review. But this is not all possible adventures.
  • A real example from the life of a trader. Before the weekend, a position was opened with a leverage of 1: 1000. The calculation was based on leverage in order to minimize the brokerage collateral. The volume of the leveraged position corresponded to the rules of risk management – taking into account the average daily volatility, the risk of catching a stop-out was minimal. Nevertheless, on Monday morning, trades were closed by stop. Debriefing showed that the broker unilaterally reduced the leverage to 1:10. Accordingly, the margin increased and trades were closed by stop. Attempts to solve the problem with the support service have led nowhere. The broker referred to the possibility to unilaterally reduce the leverage before significant events that “accidentally” occurred over the weekend. True, the broker reserved the right to determine the degree of significance of the event. This means that at any time a trader can be left without leverage and catch a stop-out.
  1. Money withdrawal… Another prohibition of most brokers regarding the prevention of money laundering. A trader can withdraw money only to the account from which the deposit was made. It is not uncommon for a trader to lose access to this account: he lost his password, changed the account itself. Occasionally it was possible to solve the problem of replacing the account, but with “big battles”. It is difficult to say where brokers have such a ban. Regulation is just an appearance (especially offshore). Deposit and withdrawal – through e-wallets, which are practically not subject to verification. Tax is generally a dark forest. What kind of opposition can we talk about? But for brokers, this is another legal reason to block traders’ money.
  2. Bonuses… Here the broker’s prohibitions relate to the rules of their use. The procedure for trading with bonus and personal funds is sometimes so confusing that a trader prefers not to delve into it. But in vain. The first mistake is a violation of the rules established by the broker, after which the bonus is immediately reset to zero, often with the money earned at his expense. The second mistake – after zeroing the bonus, it turns out that the bonus was just a picture, and trading was carried out at first for personal money. And it is difficult to blame the broker for such manipulation – who is to blame for the fact that the trader does not delve into the rules?

These are the most common pitfalls. If you are still familiar with the limitations and manipulation methods of brokers, share them in the comments!

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broker bans

Everyone wants to make money – both a trader and a broker. In an ideal system, cooperation between these market participants should be mutually beneficial, but there is no ideal. Traders are looking for ways to circumvent the trading conditions of a broker, brokers establish veiled rules that allow you to legally receive a trader’s money. And it’s not about “kitchens”.

Reviews of the confrontation between traders and brokerage companies can be seen even in relation to large brokers with a good reputation. In many ways, the fault lies with the traders themselves, who do not delve into trading conditions and trading rules. But there are also prohibitions of brokers that prevent traders from fully earning money.

What you need to know about broker bans

  1. Spreads… This is more likely not a prohibition, but a manipulation. A floating spread tends to widen at times of high volatility. The only question is whether the broker does it artificially.
  2. Trading conditions… The broker’s prohibitions and restrictions may relate to the minimum stop length. For example, at least 2 points. There are also restrictions on the number of requests sent to the server. These are restrictions for Expert Advisors.
  3. Leverage… Do you see leverage up to 1: 1000 in trading conditions? Do you really think you can use it easily anyway? Alas, disappointment awaits you. The leverage is determined by the specification of the contract. And for some reason, traders forget to look into it, limiting themselves to the offer and trading conditions. And the leverage is indicated in it. And if the leverage for EUR / USD can really be up to 1: 1000 with the right to choose, then in stocks it will be 1:10 without the right to choose. For more details, see the Leverage Pitfalls review. But this is not all possible adventures.
  • A real example from the life of a trader. Before the weekend, a position was opened with a leverage of 1: 1000. The calculation was based on leverage in order to minimize the brokerage collateral. The volume of the leveraged position corresponded to the rules of risk management – taking into account the average daily volatility, the risk of catching a stop-out was minimal. Nevertheless, on Monday morning, trades were closed by stop. Debriefing showed that the broker unilaterally reduced the leverage to 1:10. Accordingly, the margin increased and trades were closed by stop. Attempts to solve the problem with the support service have led nowhere. The broker referred to the possibility to unilaterally reduce the leverage before significant events that “accidentally” occurred over the weekend. True, the broker reserved the right to determine the degree of significance of the event. This means that at any time a trader can be left without leverage and catch a stop-out.
  1. Money withdrawal… Another prohibition of most brokers regarding the prevention of money laundering. A trader can withdraw money only to the account from which the deposit was made. It is not uncommon for a trader to lose access to this account: he lost his password, changed the account itself. Occasionally it was possible to solve the problem of replacing the account, but with “big battles”. It is difficult to say where brokers have such a ban. Regulation is just an appearance (especially offshore). Deposit and withdrawal – through e-wallets, which are practically not subject to verification. Tax is generally a dark forest. What kind of opposition can we talk about? But for brokers, this is another legal reason to block traders’ money.
  2. Bonuses… Here the broker’s prohibitions relate to the rules of their use. The procedure for trading with bonus and personal funds is sometimes so confusing that a trader prefers not to delve into it. But in vain. The first mistake is a violation of the rules established by the broker, after which the bonus is immediately reset to zero, often with the money earned at his expense. The second mistake – after zeroing the bonus, it turns out that the bonus was just a picture, and trading was carried out at first for personal money. And it is difficult to blame the broker for such manipulation – who is to blame for the fact that the trader does not delve into the rules?

These are the most common pitfalls. If you are still familiar with the limitations and manipulation methods of brokers, share them in the comments!




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