50 Words on – Why you can go Broke with HotForex?

Bonuses, bonuses and more bonuses… If you are a fan of bonuses, this is definitely the broker for you: you have a 30% Rescue Bonus, a 50% Withdraw Bonus and a 100% Credit Bonus to name a few. These offerings are prone to change from time to time, but more important, they come with a ton of conditions and strings attached. To me trading is more important than hunting bonuses or special offers and I strongly believe that a good trader doesn’t need any bonus. Of course, I don’t expect everyone to agree with my opinion, but I stand by it nonetheless.

 

How Can You Avoid Going Broke With HotForex

• If you choose to accept their bonuses, make sure you take the [long] time to understand all the conditions and limitations.
• Take note that some bonuses cannot be withdrawn and are only used as margin
• Read and understand the whole Terms and Conditions document. Ask for clear explanations if things are not written well enough.
• Be aware of the fact that slippages and some delays at news time are just part of the game, not some evil plan made by Hot Forex.
• All brokers usually widen their spreads at news time so be prepared to pay higher sums if you want to trade news.
• The leverage can go as high as 1:1000 so make sure you know what you are doing if you think about using such a high leverage.
• Withdraw periodically until you are convinced you are dealing with a trustworthy broker.

 

The Good, the Bad and the Ugly Speak

Beauty is in the Eye of the Beholder

The Ugly side of Hot Forex is actually more beautiful than other brokers’ Good side… eh, let’s not exaggerate, but anyway, just like I said above, there’s a positive vibe around this broker on most internet forums and specialized review websites. Comments like “So far they seem to live up to their motto of being honest, open and transparent. Most brokers nowadays tend to hide behind a veil of secrecy” [2] can be easily encountered online and happy customers greatly outnumber the unsatisfied ones. And speaking of complaints and bad words… we can find a few: sudip02 claims on Babypips forums that “…withdrawal is slower and harrusful” [3]. I don’t know the word “harrusful” but I guess he felt harassed in some way; if you take a look at the post date, you will notice it was made in 2011, before Hot Forex became a regulated broker and anyway, the user doesn’t offer a lot of information about his problem.

One of my favorite comments however is a positive one and comes from Ilyaz from Uzbekistan [4]: he says he changes brokers every month… yes every month and by the time the comment was made, he had changed 13 brokers in 13 months. Weird, I know, but I respect the guy’s way of dealing with cr4p… he simply doesn’t take any. If the broker doesn’t live up to the expectations and doesn’t keep promises, Ilyaz just closes the account and moves on to the next one. Yeah, cheers for that! It’s the way we all should deal with brokers. But Hot Forex is the exception which made Ilyaz stay more than one month with a broker and that says a lot in my opinion. Good comments bad comments, almost everything is relative but there’s nothing extremely Ugly that would make me stay far away from this broker.

 

The Bad… or Should I Say the Big 

Sometimes being new on the market is seen as a negative thing because there’s not a lot of history to help traders judge the service of a broker. Well, Hot Forex is regulated by the CySEC since 2012 (I consider they didn’t exist until they became regulated) so we can consider them an infant compared to the big players in the industry, but so far they are doing a good job so I don’t think their age is a reason of concern. What I don’t like is their fixed spreads: GBP/JPY - 4.2 pips, EUR/USD - 1.8 pips and GBP/USD - 2.5 pips. These are too big for such commonly traded pairs and I believe someone should tell Hot Forex that we are living in 2014, not 2012 when those spreads might have been… hot. Anyway, there’s another reason for concern: according to section 6.17 of their Terms of Business, “Due to low liquidity and/or high volatility and widened spreads, placing of pending orders around some Economic Announcements may be restricted”. So don’t be surprised if you cannot place pending orders during news, because you agreed to it… you do read all the Terms and Conditions document before opening an account, don’t you?

 

So Hot, it Burns?

Hot Forex offers the full package: good spreads and commissions, proper trade execution, small minimum deposits and 8 different types of accounts to suit everyone’s needs. Overall there’s a positive internet vibe surrounding this broker and generally people seem to be happy with their service. To back this up, Hot Forex won 12 awards, including Best Online Broker (Eastern Europe), Best Forex Broker in the Gulf 2013 and Best Forex Broker in China 2013. They offer the option to use both variable and fixed spreads, with accounts starting at $50 (Micro) and going as high as $40,000 for the VIP account; for a reasonable first deposit of $500, Hot Forex offers the possibility to open a Currenex [1] account. The “Tools” section is quite helpful, offering interesting statistics like Client Positions (percentages of clients with open Sell orders versus clients with open Buy orders) and Volume per Symbol (shown as a percentage of the total volume traded by Hot Forex clients). Overall Hot Forex is a reasonably good broker, with the ability to become one of the best if they continue to offer a high-quality service.

 

 

Editor’s Note – Is HotForex a Scam?

In light of my latest research on this broker - which by the way, took me more than I would have expected - I can say there’s no suspicion of a scam. Sure, a delay here and there and maybe some slippages are likely to occur, but that doesn’t make Hot Forex a scam. Brokers are not perfect, I’ll give you that, but Hot Forex’s main concern doesn’t seem to be stealing money from us.

 

Editor’s Note – Would I Trade with HotForex? Maybe…

I would like to see them lower their fixed spreads before I’d think about opening an account and a smaller first deposit would be nice too, considering that except the Micro account, the minimum deposit is $500 (VIP is $40,000 but I’m no VIP). Come to think of it, $500 is not such a restrictive sum, but it’s still a bit much for a broker which lacks that spark of greatness. Don’t get me wrong, they are OK, but I don’t really want to put my money on just “OK”. So there you have it: definitely maybe…

 

References

1. Currenex on Wikipedia
2. HotForex Reviews on FXEmpire
3. BabyPips Forums HotForex
4. FPA User Reviews on HotForex