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Thursday, 19 April 01:31 (GMT -05:00)



Foreign exchange market

Masterforex-V Academy Names Forex Brokers with Hidden Commissions (Big Swaps) of 40 Pips a Week


Most Forex traders out there always try to find a way to make big money without any risk. On the surface, some of such ways do really look unbeatable. However, those solutions eventually fail if applied under the trading conditions that leave much to be desired as they are offered by some brokers disinterested in their clients’ success. At the end of the day, such solutions end up causing big losses instead of generating stellar profits. This is something Masterforex-V Academy experts figured out after conducting in-depth analysis of the FX brokerage industry.

 

 

 

 
Experts on how expectations of huge success turn into a big failure.
 
Not so long ago, a major investor addressed Masterforex-V Academy experts to help him assess the risks of going long EURUSD and investing a big amount of money in the deal. His plan was pretty straightforward – to enter at 1,05 and to exit at 1,25, thereby capturing 2000 points of profit. To accomplish this ambitious goal, he was ready to invest 1 million dollars and wait for 2 o 4 years to take profit.
 
By his estimate, over the mentioned period of time, 1 million dollars would turn into 5 million dollars. He was going to trade with FxPro or Dukascopy given their promises to offer the best market conditions available in the industry.
 

Indeed, the current market bias is really bullish when it comes to EURUSD. The currency pair has been undervalued for a quite long time, even though the price may still go down while driven by some policy changes coming from the Fed or the ECB.e0b8f34468fb.png

Anyway, Masterforex-V Academy experts agree that the chances of EURUSD reaching 1,25 in 4 years’ time are fairly high. The chances of going further down are much scantier. The whole point is, the investor is essentially right when saying that in case the prediction does manifest itself, the profit will be a couple of thousand points. However, will he really manage to quintuple his investment in this case? Let’s try to figure this out together.
 
Later on, Masterforex-V Academy experts checked the mentioned brokers for hidden fees and commissions only to find out that the hidden fees and commissions won’t let the investor make money. Moreover, they will even burn a certain part of his investment. Simply put, given the hidden fees and commissions this investment idea is destined to become a loser in a couple of years or so.
 
The magic of swaps. Where to look for hidden fees and commissions?
 
Masterforex-V Academy experts analyzed the trading conditions offered by a range of popular FX brokers and found out the following things:
 
1. Most brokers stick to certain marketing strategies that advertise zero or minimal fees and commissions, including zero or tight spreads. As a result, traders and investors start believing in a delusion, which says that opening and holding long-terms trades can actually be profitable. The thing is, when the broker says that they don’t make money from spreads, commissions and other fees, this sound a little bit strange. Since any broker has to make money from something, it’s time to ask them how such brokers sustain their businesses and make money.
 
2. Most brokers conceal the size of their swaps during their ad campaigns, which also create delusions in traders and investors’ minds. In case you don’t know, a swap is paid each time you want to extend your trade overnight. Even though swaps can be positive, more often than not the are negative, which means you are charged a certain amount as a fee for extending the trade. There is nothing wrong with swaps since this is common practice with all brokers, even those who truly have access to the interbank liquidity. However, it’s hard to understand why those swaps vary from broker to broker. On top of that, the biggest swaps are usually charged by those brokers and dealing centers that don’t have access to the interbank liquidity.
 

 

Below you can see the swaps for long (buy) EURUSD trades:
 
Tight swaps:
- NordFX (-0,4);
- Roboforex (-0,6);
- FortFS (-0,68).
Moderate swaps:
- Tele Trade (-0,88);
Alpari (-1,23).
Huge swaps:
- FxPro (-6,66);
- XM (-6,84);
- Fibo Group (-12,5).
 
Fibo Group swaps are more than 30 times as big as NordFX swaps!!!
 

 

The chart below shows you how those 5-7-point swaps by Dukascopy Bank SA, Swissquote Bank SA, Saxo Bank, XM.com actually burn the trader’s capital over time (the long trade volume is 1 standard lot):

As we can see, all those promises of zero spreads and commissions usually end up being just a smoke screen to hide the real state of affairs, which is to talk the client into depositing funds and hold long trades only to lose money in the long run.
 
OK, now let’s assume that we are going to make the very 2000 points of profits we talked about at the beginning of the article. The size of the invested capital doesn’t really matter in this case. So, a trading year contains slightly over 250 trading days (excluding weekends and holidays). We tale 250 days just to simplify our calculations. This is 500 days in 2 years. Given the 2000 points we expect to make, this is just 4 points a day on average. Now, let’s compare this average daily profit with the amount of daily swaps. I guess everything is obvious.
 
 
Masterforex-V Academy’s way out
 
As you may have noticed, high swaps may turn out to be a legal way to deprive clients of their money over time. By now, you are probably thinking that by making shorter-term trades, you will avoid those pitfalls. But the thing is that when opening more trades, on top of paying swaps, you spend more money on spreads as well.
 
Masterforex-V Academy experts say that even under tough trading conditions, you can still make money if you follow a strategy preventing the broker from taking money away from you. If you want to know the ins and outs of successful; trading and investing, you are invited to visit Masterforex-V Academy’s online forum for traders and investors. For now, let’s take a closer look at some of the key factors when it comes the negative consequences of swaps.
 
This is what the experts actually offer:

If you prefer scalping and other intraday strategies, choose the brokers with tight spreads and zero commissions. If you close at least 95% of your trades within the same trading day, just ignore swaps since this is something you don’t have to worry about.
 
If you prefer longer-term strategies and you have to leave them overnight, choose the brokers with the tightest negative swaps. Keep in mind that the spread or commission is paid once per transaction while swaps are paid in a daily basis each time you decide to extend the trade overnight.
 
Use the potential of positive swaps to the full. This is something for everyone looking for unbeatable strategies. Even though your broker is smart, they just have to set positive swaps for certain currency pairs and in certain trade directions.  Positive swaps mean that you get paid each time you leave the trade open overnight.
 

However, no trade has ever seen a positive swap bigger than a negative one. Still, choosing pairs with positive swaps doesn’t mean this is a panacea. You still have to enter the market in the right place and at the right time and choose the right direction to make money over time. It’s just that positive swaps will help you make some extra money instead of losing it with negative swaps written off your balance every day until you close the long-term trade. That’s the only reasonable way to help yourself profit from long-term trades.

 

You are free to discuss this article here:   forum for traders and investors

 

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