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

I always thought that Forex trading is not for “kids” and I tried to make myself clear about this in the texts I wrote regarding this activity. So if you only have 20$ to try your fortune, don’t deposit that amount with IBFX. Just play the lottery and enjoy it. This brokerage company allows you to trade with less than 100$ but is offering a maximum 1:50 leverage. Trading in these conditions is not a matter if you will go broke but when you will go broke with IBFX.

 

How can you avoid going Broke with IBFX:

When I first started to write Forex Brokers reviews, I wasn’t so enthusiastic about it. Each new broker I have to write about, surprises me with something and this is kind of changing my state of mind. After many hours of research and hundreds of comments read, IBFX surprised me with the FPA lowest rate among all the brokers I wrote about until now. Undeserved in my opinion. Here are my tips on how to avoid going broke with IBFX:

• If the plan of depositing a low amount of money is only to test IBFX, just use their demo account instead “playing” with less than 100$.
• There is no such a thing as the perfect deposit amount but more you deposit more chances you have to enjoy trading in the Forex market and to avoid losing your entire capital.
• If you don’t have a larger amount of money to trade with, just look for a money manager and deposit your money in a PAMM account.
• Whatever your deposit is, don’t forget to apply a money management and risk management plan. That’s gonna be pretty hard to do with a low balance though.
• If you stubbornly still want to deposit less than 100$, I think the best thing to do is to trade on lower time frames with tight stop losses. So you better be a damn good trader.
• I would try to avoid long-term trades if I would have a low balance. Usually, a long term trade needs a wider stop loss.

 

 

The Good, the Bad and the Ugly Speak

Too Many Re-Quotes and Off-Quotes

As I told you earlier, I needed a few hours to discover this broker, because I did not know them. To do that, I had to read as much information as I could on their website but I also wanted to see IBFX through other traders’ eyes. As any other broker, IBFX has satisfied clients and unhappy traders also. The most complaints I’ve seen were referred to the fact that IBFX has too many re-quotes and not executing the trades at the requested price showing the message “off-quote”. That’s pretty strange seeing that they’ve been awarded exactly for the quality of these services. I am sure that “Al Pipo” from Oklahoma USA [2] or “Thinking” from TN, USA [2] would never have given a positive vote for IBFX. These traders are only two from many, complaining about the re-quotes happening too often. Anyway, on the same website where I found “Al Pipo” and “Thinking” I saw a trader from Indonesia who made me laugh. “Benjamin” [2] rated IBFX with 1 single star and said that “this broker is suck” only because he did not get any positive swap, regardless if he was long or shortJ. Maybe someone should have explained him that the positive swap has nothing to do with the long/short position in the market but with the rate differentials of the two currencies that he traded.

“BBot” [3] rated IBFX 5 stars saying that in his 3-year experience with this broker, he was more than satisfied with the average execution time or with the quality of the price feed. Mark Welch [4] from USA also rated IBFX with 5 stars saying that he had really positive experience with them, although signals as a con that hedging is not allowed.

I have to say that Benjamin from Indonesia made my day with his comment on IBFX. However, rating a broker with the lowest vote for something that you are not aware of, is like saying that going to the beach sucks because you don’t know to swim. I was sure that a 1.5 stars average rating on FPA is too low for IBFX and now I know why it has such a rating. Because traders like Benjamin.

 

No Scalping and a Niggardly Leverage

Is not the end of the world if a broker does not allow to scalp but it is pretty damn difficult to trade a 50$ account with a 1:50 leverage, looking on 4h time frame and setting a 30-50 pips stop loss. They are not the lowest in this industry, but a 1.8 pips spread for eur/usd or 2 pips for usd/jpy, gbp/usd or usd/chf could be an extra temptation for a scalper. The temptation can pass away though, when you realize that these spreads are variable and during high volatility moments, they get bigger.

Using a leverage as low as possible is in the client’s advantage and it’s definitely better to trade 1:1 than 1:200 but if you accept pennies (less than 100$ deposits) at least you should offer the conditions to trade the pennies and 1:50 leverage does not seems appropriate conditions to trade pin money.

It does not make much sense for me to see a large broker, who is dealing with more than $70billion in monthly trading volume, to refute hedging (for the US clients) or scalping for traders who are “playing” with a few bucks in their trading accounts. I’ve seen worse trading conditions than these but I would have expected more flexibility from such a large company.

 

Automated Market Maker and Better Trading Conditions for Non US Citizens

IBFX has established a global network of banks, which allows them to aggregate the prices and to offer the best price available to their clients. Although is a market maker, IBFX replaced the human element with an automated order execution and this allows them to offer a faster execution and helps to prevent orders from being rejected.

Seems like a discrimination but if you are a citizen residing outside of the United States you have the option to open a trading account with IBFX Pty Ltd Australia [1]. You get the same spreads, the same execution, the same trading platforms (MT4 and TradeStation) but higher leverage (1:400) and full hedging. Besides that, you can also trade gold and silver with the Australian company. Regarding the trading platforms, IBFX offers a third solution, which is a professional trading platform offering institutional spreads and execution for prime brokerage clients.

 

Editor’s Note - Is IBFX a Scam?

IBFX Inc. is a member of NFA and registered with CFTC as a Retail Forex Exchange Dealer (RFED). IBFX’s parent company, Monex Group Inc. is among Japan’s leading financial services companies. Both Monex Group and Monex Securities, its main subsidiary, are subject to stringent oversight by Japanese regulatory authorities. IBFX is subject to stringent US industry regulations and requirements and has continuous reporting requirements that are subject to regulatory review and regular audits. If IBFX is a scam, the Japanese and US authorities are doing a pretty bad job in their controlling and auditing this company. So my opinion is that IBFX is not a scam.

 

Would I Trade with IBFX?

Based on a survey among 8,750 investors, IBFX was voted the number 1 in more categories than any other forex broker. Maybe the US citizens might want to consider other options due the restrictions that this company have for these traders but the IBFX from Australia is more flexible. I don’t reside in US, I don’t scalp and their 13 years of experience in this industry and the size of this company gives me confidence to open an account with them. However, I cannot ignore all the complaints seen over the internet and that’s why my final judgement is neutral. All that I can say is that in my opinion they deserve a chance and I am ready to offer them this chance.

 

References

1. IBFX Signup
2. FPA on IBFX
3. Don’t blame IBFX Review
4. IBFX on FXEmpire