I’ve decided to make a few changes to the brokers I’m using. These changes will take effect from March 2011 onwards
1. Ceasing trading at Forex.com
Megadroid performance at this broker has been generally poor, and I’m becoming increasingly concerned about the reports I’m hearing that this broker is trading against their clients. They have recently been investigated by the NFA over these matters, and were fined $459,000.
Here’s a link to the recent NFA Case against them:
They have also been fined by the NFA in 2007 over other matters:
2. New Broker – Adding Fx Solutions
I”m using FxSol Australia who are regulated by ASIC. They offer 1:400 leverage. It’s a fixed spread broker. The spread on EUR/USD is a little high at 3 pips. It’ll be interesting to see how it performs. If the fills are good, the higher spreads shouldn’t matter since many of the variable spread brokers have spreads ranging up to 10 pips during the Megadroid session anyway.
3. FxPro – Megadroid Ban
At this stage Megadroid is still being blocked by this broker. I wrote this article on the matter (HERE). I did contact them and they said the disabling of Megadroid is only temporary but they refused to say how long it would remain in force.
The reason they gave was “low liquidity”, which I personally find hard to believe, considering EUR/USD is one of the most liquid forex pairs, and I have not observed any drop off in liquidity in the EUR futures contract (6E).
I suspect the real reason is that they’re finding it difficult to hedge against Megadroid, which has performed well at FxPro.
Anyway, I’ll keep my FxPro account running with Megadroid this month and see what happens. Hopefully they’ll re-enable it soon, but there’s no guarantee’s.
4. FXDD – Changing from a 5 digit account to a 4 digit account
Early in January FXDD introduced fractional pips on their MT4 trading platform (see HERE). This meant the EUR/USD quotes had 5 decimal places instead of 4 like before. They did give the option of keeping the account at 4 digits. I have a few FXDD accounts, and have been running some tests with Megadroid and noticed that I’m getting more Megadroid trades through on my 4-digit FXDD account.
So, starting from March 2011, I’ll start using my 4-digit FXDD account instead of the 5-digit account. It connects to “FXDD-MT4 Live Server 6”.