SaxoBank Is Why Im Broke

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

Being a market maker is not synonym with bankruptcy; now that’s a lesson every trader must learn. Accusing SaxoBank of stop loss hunting only because they are a market maker is a cheap way of diverting the attention from your own limits. Why am I saying it? Because if you’ll search SaxoBank on the internet you’ll quickly find out that most complaints are addressing stop loss issues. As for me, I do agree with those complaining about the trading platform crashing too often or being confusing (tabs within tabs). The trading platform is your gate to the market and you need to find it open and easy to use at all time. Even though this could be a serious issue, there is nothing that cannot be fixed. Grab an oil dropper and read the instructions in the next section.

 

How Can You Avoid Going Broke With SaxoBank:

I never traded with SaxoBank but I knew about their existence. Before I had to make the researches for this article, the SaxoBank was like an actress for me. You know that perfect, beautiful and sexy woman. Now I still see the SaxoBank as an actress but without the makeup: still beautiful and sexy but not perfect. We all know that the actresses may be very capricious sometimes so here are a few tips to help you to be in syntony with SaxoBank:

  • Beside their own trading platform (SaxoTrader), the Saxo Bank also offers the MT4 trading platform so you might want to consider trading on MT4 to avoid seeing the normal platform crashing.
  • If you also find the interface confusing, the SaxoTrader platform is fully customizable so you can chose the functions you want to use and just forget about the others.
  • If you look for more flexibility, there is also a third alternative: the SaxoWebTrader platform, which doesn’t require any download and allows individuals to trade multiple asset classes, personalise the interface and choose from an array of instruments to trade the global financial markets.
  • Avoid to trade during important news releases. Very often, there are spikes driven by other players’ orders in the market and SaxoBank can do nothing about this.
  • Usually the stop loss orders are placed above the resistances or below the supports and everyone knows it, not only SaxoBank. Try to place your stop losses with a wider range. Sometimes a stop loss with extra 5-10 pips can make the difference.
  • With a proper money management and using higher time frames to establish the resistance and support areas, you can reduce the noise in the market. Place your stop loss orders using those areas even if you usually trade on 1h chart or lower.

 

The Good, the Bad and the Ugly Speak

Uncaught Thief is Honest Merchant Uncaught Thief Is Honest Merchant

As tough as it might seem the title of this section, I don’t think SaxoBank are thieves but I also don’t know in which other way to describe their attitude. In the “Business terms and policies” section, you will find the “Conflict of Interest” document. On the 2.1 paragraph is written: “Saxo Bank hereby identifies and discloses a range of circumstances which may give rise to a conflict of interest and potentially but not necessarily be detrimental to the interests of one or more clients. Such a conflict of interest may arise if Saxo Bank, or any person directly or indirectly controlled by Saxo Bank or a client is likely to make a financial gain, or avoid a financial loss at the expense of a client. Saxo Bank will manage the conflicts of interest fairly.” I am not accusing them of not acting with professionalism in such cases, but I have to say that I don’t think that my interests will be weight on the same balance with their own interests. You can find more details here.

Seems that Richard from Netherlands [1] has been in such a position of not seeing his interests safeguarded and he definitely does not recommend to trade with Saxo Bank.

On forexmagnates.com I found an interesting story, from April 2010, about an investment company from Portugal who threatened to sue SaxoBank for 10 million euros for some discrepancies between the exchange rates in the market and the courses that were traded with Saxo Bank. The Portuguese financial house required [2] also to the Danish authorities to withdraw the Saxo Bank’s licence to operate in the financial business.

Cesil from London as Ioannou from Cyprus are trading with SaxoBank for years and they seem pretty happy. Cesil is impressed by the daily emails [3] he gets, with trade recommendations while Ioannou consider SaxoBank “the best in the market [3].”

As far as I am concerned, the story of the company from Portugal suing the SaxoBank is only a story. In these past 4 years I never heard of Saxobank being fined and as you can see their licence of doing business in the financial markets is still valid, not only in Denmark, but in many other countries as Japan or Switzerland. I guess that for many traders – and I am referring here at the retail traders – SaxoBank plays in another league than they are used to. Although there are the same rules, with 22 players and 1 ball, the football played in the national championship is not the same as the one seen in Champions League.

 

The Fixed Spreads Are Not Fixed The Fixed Spreads Are Not Fixed

I wouldn’t call a 2 pips spread on EUR/USD as one of the lowest in this industry but I could be tempted to trade with a fixed 2 pip spread. The temptation disappeared when I read – on their website – that the “FX Spot spreads stay fixed under normal market conditions.” I don’t think you need to be a genius to understand what’s happening when we don’t have “normal market conditions”. If you think this is a joke, you are wrong, and the joke is not finished yet because, even if SaxoBank allows you to trade 0.05 lots, you have to pay 10 USD commission if your position size is smaller than 0.50 lot (50 000 units of the base currency). This example is only for EUR/USD cause if you plan to trade AUD/USD for example, the minimum position size to trade is 1 lot (or 100 000 units of the base currency) in order to not pay the 10 USD commission.

 

Global Reach and Wide Range of Instruments to Trade Global Reach and Wide Range of Instruments to Trade

In addition to its headquarters in Denmark, SaxoBank is present in 25 countries, covering the world’s major financial centres including London, Zurich, Dubai, Singapore and Hong Kong. SaxoBank is a full-service investment bank, being regulated in several different countries.

One thing that I love most to a broker is to have a wide range of instruments to trade and SaxoBank for sure has one of the largest in the industry. You can trade up to 179 Forex crosses (including gold and silver), FX options, CFD, up to 19 000 stocks, ETF and ETG, Futures, Contract Options and Bonds. For what I am concerned, this is what I call Heaven. Whatever happens in any corner of the world, you can choose the right instrument to maximize your profits. Just to give you an example, a Gold ETF is less volatile than the yellow metal and could bring better profits than the spot gold, trading the same position size.

Usually, the investment banks do not play with pennies and even SaxoBank tries to fit in this select club asking a minimum deposit of 5000$. However, I appreciate the fact that using their SaxoMT4 account (the only account that has the MT4 as the main trading platform), they allow you to open an account with no minimum deposit requested.

 

 

Editor’s Note – Is SaxoBank a Scam?

SaxoBank was founded in 1992 as a brokerage firm and in 2001 obtained a banking license from the Denmark Government. I am sure that in 22 years since this company exists, someone (local or international authorities) would have noticed that they are a swindle. Of course, there are complaints and accusations but no one proved anything until now so talking is cheap and easy. So my answer is no, SaxoBank is not a scam.

 

Would I Trade with SaxoBank?

The company keeps working hard to give its clients a better service, providing a lot of market information in addition to the necessary tools needed to make profitable trades. As I told you earlier, for me, having so many instruments available to trade is the Paradise and depositing my money into a bank, benefiting of higher protection than from an average brokerage company, is like finding both bank doors wide opened. SaxoBank should be on top of anyone’s list of possible brokers to open an account with.

 

References

  1. FXEmpire on SaxoBank
  2. SaxoBank license under thread
  3. FPA on SaxoBank

 

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