Estimated reading time: 6 minutes
Managed Forex accounts is still a controversial topic mainly because there are so many cons around. We came across a service called FX Traders. This service looks very tempting at first. In fact, a naive investor would be tempted to throw their money in hoping that they will make a profit.
However, we’ve got a second opinion concerning FX Traders. If you planned to sign up with them before you came here, you’ll need to hold on because we are about to discuss some disturbing facts about FX Traders website.
We wouldn’t want to label this website a scam yet. So the first thing we will say as far as this introduction is concerned is that FX Traders offers Forex managed accounts to clients who are willing to part with at least $10,000.
That is, if you have that amount of money, you only need to find their broker and wire that money. Once you sign an LPOA document, you will have given them the green light to trade your account.
FX Traders have 3 different types of accounts. They call them L1, L2 and Liquid Systematic Tailored accounts respectively.
These accounts have different features and different minimum deposit requirements. They are all segregated accounts, meaning that these guys can only trade your money and not touch it directly.
Or we could say that they do not have the power to withdraw it due to the LPOA document which you have to sign before commencing this contract with them.
The problem with this is that even if they do not have the power to touch it, an inexperienced or impatient Forex account manager will still earn their commissions even if they blow your account anyway. That means that they don’t even have to perform the act of literally taking money out of your account to make money. For every trade that is opened, this asset manager will earn a commission.
Now, we are not saying that FX Traders are not an illegitimate business. We are only concerned with how they are not showing us their trading performance among other things that are missing on that website.
The website is registered under the name of someone called Hamish Anderson– according to Who.is. However, this information is not published anywhere on this website.
You see, in as much as someone would argue that their identity is not important, the fact of the matter is that it is very foolish to wire $10,000 to someone whose identity you do not know. It’s how people lose money on the internet.
Therefore, we can see an element of lack of transparency. We perused their ”about us” page and only saw that there was no useful information pointing to the owner or owners of this website.
They do not even have an address, although a phone number is present. This phone number suggests that FX Traders are based in New Zealand. So at least we can guess that they are operating somewhere in New Zealand, although no specific location has been mentioned. We feel that this is a big red flag.
We have already mentioned that this is a Forex managed account service. They claim that they target a modest ROI of between 4-15% every month.
That range is quite realistic. So we have no problem with that. However, they state that their performance fee is 30%.
That is a very big amount considering that this managed account service already benefits from the commissions which your trades generates for them.
A reasonable performance fee would be 20% and below. Therefore, while they claim to operate with high water mark principle, that fee could still suppress your profits at the end of the month.
Speaking in terms of their method of trading, FX Traders say that they implement a number of trading strategies as opposed to just one strategy.
These strategies are not mentioned. Instead, they use vague terms such as ”we use technical, systematic and mathematical approach to trade the Forex market.
They also appear to be swing traders because the average length of time that a trade has lasted is 2 days. Again, no problem with this.
Every asset manager will make claims every now and then. In this case, FX Traders makes claims that are realistically achievable. The problem is that they do not have a trading performance to prove that they can do what they claim to do.
Their site has a section called ”Performance”. But when you click that link, you will not be redirected to a broker statement or a myfxbook account. Instead, you will be taken to a page that has a table with mathematical values in it.
That table has 3 columns showing months and gains respectively. But honestly speaking, this table does not offer any verifiable proof that FX Traders indeed achieved these results. By only looking at that table, you cannot determine if indeed this asset manager achieved those results.
It is therefore safe to assume that this broker doesn’t have a trading performance record. Any legitimate asset management firm will have no trouble producing these records if needed.
Something like broker statements would go a long way in proving that these asset managers are experienced and real. But since they claim to trade 5 days a week yet are unable to produce records of their performance, we can only dismiss their claims as empty talk.
If these guys were that good in trading and producing results as stated on their website, a number of investors would be trading with them, right?
In fact, positive customer feedback would be littering the internet with praises of how good FX Traders are in managing Forex accounts.
We checked the whole website and never saw a single customer feedback.
We checked elsewhere on the internet and realized that no one was talking about this service.
This gives the impression that this website is not popular. Now, going by their supposed record of performance, it would make sense to say that they have been trading for their clients for some time. Then how come that no one is talking about them?
Do the so-called investors whom they trade for have a voice or basic typing skills to raise their opinion or criticism about this service?
The point is, if a service is good, you will see others talking about it on the web. If the service is bad, people will talk negatively about it. But in the case of FX Traders, we don’t even have testimonials. It kills confidence.
Do not give your money to anyone who does not have a track record in the Forex market. If they are hard to find, you better take matters in your hands by using these Forex products. We have tested and tried them both on demo and live accounts. So far, so good.
Otherwise, don’t say that you were not warned. FX Traders is just a one-man army or a group of individuals who are only concerned with earning commissions. That’s the reason they won’t allow you host your account with any other broker except the one they are working with. Just avoid.
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