They fear missing a move, so they hit their buy key, or they fear losing more and they hit the sell key. In volatile exchange rate environments, the broker cannot ensure an order will be executed at the desired price. This results in sharp movements and slippage. The same is true for stop or limit orders. Some brokers guarantee stop and limit order fills, while others do not. Even in more transparent markets, slippage happens, markets move, and we don't always get the price we want.
Real problems can begin to develop when communication between a trader and a broker begins to break down. If a trader does not receive responses from their broker or the broker provides vague answers to a trader's questions, these are common red flags that a broker may not be looking out for the client's best interest.
Issues of this nature should be resolved and explained to the trader, and the broker should also be helpful and display good customer relations. One of the most detrimental issues that may arise between a broker and a trader is the trader's inability to withdraw money from an account. Protecting yourself from unscrupulous brokers in the first place is ideal.
The following steps should help:. It should be pointed out that a broker's size cannot be used to determine the level of risk involved. While larger brokers grow by providing a certain standard of service, the financial crisis taught us that a big or popular firm isn't always safe.
Brokers or planners who are paid commissions for buying and selling securities can sometimes succumb to the temptation to effect transactions simply for the purpose of generating a commission. Those who do this excessively can be found guilty of churning —a term coined by the Securities and Exchange Commission SEC that denotes when a broker places trades for a purpose other than to benefit the client. Those who are found guilty of this can face fines, reprimands, suspension, dismissal, disbarment, or even criminal sanctions in some cases.
The SEC defines churning in the following manner:. The key to remember here is that the trades that are placed are not increasing your account value. If you have given your broker trading authority over your account, then the possibility of churning can only exist if they are trading your account heavily, and your balance either remains the same or decreases in value over time.
Of course, it is possible that your broker may be genuinely attempting to grow your assets, but you need to find out exactly what they are doing and why. If you are calling the shots and the broker is following your instructions, then that cannot be classified as churning. For example, if your objective is to generate a current stable income, then you should not be seeing buy and sell trades on your statements for small-cap equity or technology stocks or funds. Churning with derivatives such as put and call options can be even harder to spot, as these instruments can be used to accomplish a variety of objectives.
But buying and selling puts and calls should, in most cases, only be happening if you have a high-risk tolerance. Selling calls and puts can generate current income as long as it is done prudently.
An arbitration panel will consider several factors when they conduct hearings to determine whether a broker has been churning an account. There are times when it may seem like your broker may be churning your account, but this may not necessarily be the case. Unfortunately, options are very limited at this stage. However, there are a few things you can do. First, read through all documents to make sure your broker is actually in the wrong. If you have missed something or failed to read the documents you signed, you may have to assume the blame.
Next, discuss the course of action you will take if the broker does not adequately answer your questions or provide a withdrawal. Steps may include posting comments online or reporting the broker to FINRA or the appropriate regulatory body in your country. While traders may blame brokers for their losses, there are times when brokers really are at fault.
A trader needs to be thorough and conduct research on a broker before opening an account and if the research turns up positive for the broker, then a small deposit should be made, followed by a few trades and then a withdrawal.
If this goes well, then a larger deposit can be made. Securities and Exchange Commission. Forex Brokers. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.
With over 50, words of research across the site, we spend hundreds of hours testing forex brokers each year. How we test. Trading forex currencies in India is popular among residents. For a historical breakdown, here's a link to the Securities and Exchange Board of India webpage on Wikipedia.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
To find the best forex brokers in India, we created a list of all brokers that list India as a country they accept new customers from. We then ranked brokers by their Overall ranking. Compare India authorised forex and CFDs brokers side by side using the forex broker comparison tool or the summary table below. Commission-free trading. Simple to use proprietary trading platform.
No phone support offered. Lack of market news and trader education. FXTM Review. XTB Review. Visit Broker Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. IC Markets Review. MetaTrader and cTrader available on desktop, web and mobile. Impressive library of educational material and videos. Beginner traders may be overwhelmed by the choice of markets and platforms.
FP Markets Review. Visit Broker Trading involves risks. Swissquote Bank Review. Pros: Cons: Swissquote Bank is a regulated entity. Customer support is very responsive and provides timely service. Investor protection is very strong. Highly diversified asset base, which caters to all kinds of traders. Many countries are excluded from doing business with Swissquote, which prevents traders in those countries from opening trading accounts.
Minimum deposit amounts are high. Visit Broker Your capital is at risk. Visit Broker CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. RoboMarkets Review. RoboForex Analytics app and educational videos. Offshore regulation.
BDSwiss Review. Commission-free trading available on non-share CFDs. Tons of research and education material. MetaTrader 4 and MetaTrader 5 platform available. Premium features require a VIP account that needs a higher minimum deposit.
Tickmill Review. Pros: Cons: Multiple regulations and licences. Commission-free trading accounts available. Competitive spreads and overnight swap charges.
Impressive range of trader research tools and analysis. No stocks available. MetaTrader 5 not available. FXCC Review. High withdrawal fees via bank wire. Choice of trading, investing and copy trading accounts. Leading social trading platform for CopyTrading. Feature-rich eToro Trading Platform for web and mobile. Customer support Live Chat feature not available in all regions yet.
Top Brokers. Best Brokers. Best Forex Brokers. Best Forex Platforms. Best CFD Brokers. Best Spread Betting Company. Best Crypto Trading Brokers. By Country. New Zealand. South Africa. Kuwait Brokers. Hong Kong. United Arab Emirates. By Trading Platform.
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