XM Is Why Im Broke

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

Now why could you go broke trading Forex… with any broker? First up it’s the traders’ lack of knowledge, but we’re not going to talk about it here. Then there’s the always present slippage and delay when executing trades. A trader on a well known forum claims he/she had a 15-20 minutes delay on XM’s platform… let me say that again: 15 – 20 minutes. If it were true – which I don’t believe – that would be a solid reason to go broke.

 

How to Avoid Going Broke With XM

  • If a trade takes 15 to 20 minutes to open or close, that should be the last one placed with XM. However, I want to mention again that I don’t believe XM delays trades that much
  • If trades take more than normal to open or close, check your internet connection – it might be a problem on your side. “Normal” is relative but I consider everything above 2 seconds not normal
  • Keep in mind that trade execution may be slow during news releases. This applies to most brokers and it is a normal occurrence. Everybody tries to buy and sell when price is moving strongly.
  • Slippages also can occur at news time and again, it is not something out of the ordinary.
  • Better avoid trading news unless this is your main way of making money. In that case, I would recommend looking for another broker.
  • If you experience delays or platform freezes, try to execute the trade from your smartphone. Often the Mobile version of the Meta Trader 4 platform is more responsive than the desktop version.
  • If you plan on using EAs, make sure your software is accepted by XM. Keep reading for more details
  • If you plan on scalping, get XM to define “Scalping” in writing. You need to know how long a trade must be kept open for it not to be considered a scalping trade. Keep reading for more details

 

 

 The Good, the Bad and the Ugly Speak

The Internet Never Fails To Amaze The Internet Never Fails To Amaze

Once again, I turned to the major internet forums and websites to find out what the masses are thinking about XM. As always, the opinions were mixed: Karim Hemmat from Egypt [1] says on forexpeacearmy.com that he has a “Forex institute” and that all his clients join XM. Ok, nothing wrong so far but he claims he lost $1200 (on top of his initial planned loss) due to slippage during the Non Farm Payrolls release and he wants that money back because he had “…traded with them worth $50,000 USD in multiple accounts”. If Mr. Karim owns a Forex institute I think he knows a lot about Forex trading and should be aware that slippages occur, especially during the NFP. Besides, you can’t ask your broker to cover your losses because you consider yourself a big client. Stop losses are not guaranteed and that is written in most brokers’ Terms and Conditions.

More angry clients come from Pakistan: abdul sattar [1] is mad about his account manager’s IQ and choice of beverages, saying he is “always drink beer” and “a stupid person he cannot contact with his/her client”. I wonder how did Mr. abdul find out about the account manager’ drinking problem? I don’t believe the guy went to work drunk or smelling of beer… and if he did, how come his boss allowed him not only to stay in the office, but talk to clients. Come on, let’s be reasonable here.

There is no shortage of satisfied customers, with Ejaz Afzal from Pakistan being one of them. He is almost the exact opposite of abdul sattar, saying that his “Account Manager nature wise a good person he is very very cooperative for their clients”. I don’t understand exactly what he is trying to say but I guess he is satisfied with the service. [1]

On FxEmpire, Igor B. from Slovenia is happy with XM’s withdrawal speed [2] and Timmo Buuron from Netherlands loves their execution speed, saying that “trades are done at the click of the mouse” [2]. As you can see, traders had different experiences with XM but overall I think you shouldn’t trust 100% everything you read on the Internet and you should test XM for yourselves, with a small account.

 

The Artificial Intelligence Threat The Artificial Intelligence Threat

This brokerage doesn’t want you to trade using artificial intelligence. In their Terms and Conditions, under “Prohibited Trading Techniques” it is stated that it’s prohibited to “apply artificial intelligence analysis” to their platform. Next they inform us that they will determine, at their own discretion if such artificial intelligence software has been used or is used. In other words, if they say something is artificial intelligence, as far as they are concerned, it is AI and they don’t have to prove it. The consequence of using such “artificial intelligence” is the possible cancellation of trading profits gained with the use of that software. Even if you know your EA is not powered by artificial intelligence, if they say otherwise, they have the right to cancel your profits. I am not sure that is fair and I strongly recommend you read section 53 (prohibited Trading Techniques) of their T&C.

The same section 53 informs the trader that scalping is not allowed (alongside sniping and arbitrage) and profits made from scalping may be erased or spreads may be increased, or the access to instantly tradable quotes may be limited. However, they do not explain what exactly a scalp trade is… if I open the trade and close it in one minute, is that called scalping? What about 5 minutes? I don’t know because they don’t define it properly and besides, all decisions regarding potentially fraudulent trading will be made at their “sole and absolute discretion”. In other words, if they say you did something wrong, you did. Better keep away from EAs and scalping I guess but, again, I strongly recommend reading their T&C because I might have misunderstood something.

 

Low Spreads, Proper Execution  Low Spreads, Proper Execution

XM is owned by Trading Point Holdings Ltd. and since its creation back in 2009, it became regulated by almost all important regulatory bodies: CySEC in Cyprus, ASIC in Australia and FSP in New Zealand. Furthermore, XM is registered with the FCA in UK, BaFin in Germany and the respective regulatory authorities in Spain, Hungary, Italy, France, Finland, Poland, Netherlands and Sweden. XM is characterized by transparency and competitive trading conditions, offering client funds protection in case of company insolvency. They offer an extremely low minimum deposit of only $5 and three account types: Micro, Standard and Executive. The spreads are as low as 1 pip for majors under normal market conditions. Hedging is allowed and the leverage goes as high as 1:888 (not sure why that number was chosen). The platform used is the popular Meta Trader 4 but a Web based platform is also available as well as a mobile version. Overall trading conditions are those of a reliable broker but nothing stands out as extraordinary or very innovative.

 

 

Editor’s Note: Is XM a Scam?

If you go on forums, a lot of people scream “scam” about XM but I think that is too harsh. Sure, maybe they have some issues which need addressing. Improvements to their service can be made but calling them a scam is not the case here. Several important regulatory bodies supervise XM’s activity and I don’t think they would allow fraudulent activities just how I don’t think a drunken account manager was allowed to speak to a client.

 

Bottom Line: Would I Trade With XM? Probably Not

I have mixed feelings about this broker. They have a good side and a bad side but for me the bad side is a bit too much. I don’t like their approach regarding “sole and absolute discretion” and because of that, I will stay away for the time being. I can’t say they are a bad broker, just not my cup of tea.

 

References

  1. ForexPeaceArmy Complaints XM
  2. User Based Reviews on FXEmpire

 

Have We Saved You From Going Broke?

  • Wayne

    I have been considering opening an account with this broker. I asked support chat, did they allow scalping, they replied YES.I hope that is correct.
    They are not an ECN but a STP.
    Best regards
    Wayne

    Reply
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