Plus500 Is Why Im Broke

50 Words on – Why you can go Broke with Plus500?

If you look long enough on the Internet you will find both good and bad things about mostly anything. Some people love Apple; others wouldn’t touch an Apple product if their life depended on it. Yea, I’m exaggerating a bit, but you get the idea: people rate a product or a broker depending on their personal experience with it and if you are a scalper, you will probably have a bad experience with Plus500. Unfortunately they don’t allow scalping so if that’s your main way of trading, you could go broke because your trades may be voided or cancelled in part or all. If you’re not a hard core scalper, you will get a well-made custom platform with great performance and intuitive interface.

 

How to Avoid Going Broke With Plus500

  • If you are a scalper, you should try to extend the duration of your trades.
  • If scalping is the only way you trade, carefully asses if what they consider scalping falls into your comfort zone. Otherwise, change your strategy or ask for written consent to scalp.
  • You should ask for written information about what is considered scalping by Plus500. Some brokers consider a 10 minute trade a scalp, while others are a lot more permissive.
  • Plus500 offers CFD trading in Shares, Forex, Indices, Commodities and ETFs. This means that you will need knowledge about those markets if you want to trade them. Forex can be difficult by itself, so venturing into other markets increases your risk of going broke if you are not prepared.
  • They offer a no-deposit bonus (you don’t have to invest any money to get this bonus), but this comes with additional terms and conditions so make sure you read and understand those: Answer the questionnaire, upload copy of ID and confirm your phone number your address. Validate phone to qualify for bonus and minimum trading required for withdrawal. T&Cs apply.
  • Make sure you don’t keep all your trading money in your trading account. Deposits are very fast these days so if you plan on opening say a 10,000 USD account, keep 5,000 in your pocket and only deposit the other 5K If you need more (from the other 5K), you can add them with very little delay. We recommend this type of money management (or similar) for all brokers from now on, considering the latest Swiss Franc happening.
  • You must be extremely aware that your capital is at risk! Again, this is not a warning that applies to Plus 500 only, but to all brokers and to trading in general.

 

 

 The Good, the Bad and the Ugly Speak

A Well-Oiled Trading Machine A Well-Oiled Trading Machine

The company was founded in 2008 and currently operates through it’s subsidiaries in the United Kingdom, Cyprus and Australia, being regulated by the corresponding entities: Plus500UK LTD, regulated by the Financial Conduct Authority in the United Kingdom (FRN 509909), Plus500CY LTD by CySEC in Cyprus (Licence No. 250/14) and Plus500AU Pty Ltd by the ASIC in Australia (AFSL #417727). According to them (Plus500 Q4 2014 Financial Results), in 2011 they reached more than 1,000,000 traders and this says a lot about the high level of confidence the people around the globe have in this company. Adding to the respectability of Plus500 is the fact that this is a publicly traded company (listed on the AIM, section of the London Stock Exchange), meaning that its shares can be traded on the London Stock Exchange (PLUS).

When a company goes public, the transparency levels go through the roof because they need to publicly inform their share holders and the concerned authorities about their financial situation. That’s all very reassuring but the highlight – in my opinion – is this: “The Company wishes to remind investors that its customers are unable to lose more than they deposit with the Company…” The quote above is from a statement issued by Plus500 after the recent Swiss Franc storm. The entire document can be read by following the link at the bottom [1]. Maybe at first glance this doesn’t seem like much but it’s actually a very important piece of information; here are the facts: due to the massive movement seen on CHF pairs on the 15th of January 2015, a lot of customers ended up owing money to their brokerages. When accounts reached Zero, transactions couldn’t be closed and the Swiss Franc was still climbing, thus many traders ended up having negative balances… and someone has to pay those – usually the trader. So, if you thought going broke is bad, consider this Ultra-Steroid-Mutated-Broke and pray it never happens to you. Well, you could pray or you could choose to trade with a broker that offers the so called negative balance protection – I consider the latter more effective though.

Now read Plus500’s statement above and let me know if that’s a Good enough reason to trade with them. If that’s not enough, then think about the stability and reliability they’ve proven since 2008, the fact that you can trade CFDs with over 2,000 instruments (Shares, Indices, Commodities, Forex, and ETFs) across over 20 different markets worldwide. On top of that, they offer a user-friendly platform (Demo also available), while being authorized and regulated by the relevant authorities from the countries they operate in, so to me it looks like you have the whole package, all in one place.

No Chit Chatting No Chit Chatting

As you would have guessed, nobody’s perfect and I believe a drawback of Plus500 is the fact they don’t accept scalpers. Ok, it’s their right to do so, but I believe they should offer more information about what is considered a scalp trade, in order to eliminate subjectivity. Another issue many traders have with Plus500 is the lack of Live Chat or Phone support *Update: the Live Chat is now… Live. You can use the feature without any restrictions and I may add that representatives are knowledgeable and helpful, just how they should be (communication between the customer and the brokerage can be still conducted through e-mails as well). The lack of Live Chat wasn’t a big problem before, but some customers seemed to see it that way so I’m glad Plus500 addressed the issue. That’s about it for the Bad talk, but things get interesting when the ugliness comes out.

 

The Wonders of the Internet The Wonders of the Internet

People like to argue and that’s a fact. Recently I’ve been reading some Youtube comments of two people arguing about one of them being in college or not. Don’t ask me why, but it was fascinating and I couldn’t stop reading. One guy said he was in college, the other didn’t believe him and each one came up with reasons to convince the other. The video was about tattoos, and people argued about college… go figure. Anyway, sorry for the rant, but imagine what happens when people start trading and arguing about it. For example, shakil from Italy complaints on fxempire.com that Plus500 deducts a commission every midnight [2]. Wow! Guess what, my broker does that too and mostly every broker out there… you might know it as “swap”. But, eh, people have to complain.

On the same page as the comment above, I found another “funny” guy [2]: anthony 10500 says there’s nobody around on weekends and that emails have a slow response time of 15 – 20 minutes. Umm, first of all, getting an answer in 15 minutes is not bad at all and secondly, why would you expect them to be around on weekends? Maybe that’s just me, but I don’t see it as a problem. My bank is also closed on weekends.

On the bright side, I’ve read about a lot of traders who are very satisfied with the service offered by Plus500: Kamran from London said he experienced “hassle free secure paypal” deposits and withdrawals [3]; user Attila confirms all of this a few posts lower on the same page. Hisham from Oman says he is surprised of all and that he never had any problems with Plus500.

 

 

Editor’s Note – Is Plus500 a Scam?

There are both good and bad comments, angry clients and happy ones so we can choose to believe one side or the other but what matters the most are the facts: Plus500 is a publicly traded company and is regulated by some of the most prolific regulatory bodies from the countries where it operates. I don’t believe the UK Financial Conduct Authority would allow a scam company to operate under its jurisdiction so I have to conclude that Plus500 is not a scam.

 

Editor’s Note – Would I Trade With Plus500? Yes!

If you’re a serious trader, one that doesn’t care a lot about chit-chatting on the phone with your account manager everyday on more or less important matters, if you’ve been hurt by the recent CHF crisis and looking for a broker with Negative Balance Protection, if you want great spreads and you’re not a scalper – What are you waiting for?? Join Plus500, they may be just right for you.

References

  1. Plus500 Statement on Swiss Frank Crisis
  2. Plus500 on FXEmpire
  3. Plus500 on FPA

 

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