AXNFX Review Scam or Reliable Forex Broker

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Is Your Forex Broker a Scam?

If you do an internet search on forex broker scams, the number of results is staggering. While the forex market is slowly becoming more regulated, there are many unscrupulous brokers who should not be in business.

When you’re looking to trade forex, it’s important to identify brokers who are reliable and viable, and to avoid the ones that are not. In order to sort out the strong brokers from the weak and the reputable ones from those with shady dealings, we must go through a series of steps before depositing a large amount of capital with a broker.

Trading is hard enough in itself, but when a broker implements practices that work against the trader, making a profit can be nearly impossible.

Key Takeaways

  • If your broker does not respond to you, it may be a red flag that he or she is not looking out for your best interests.
  • To make sure you’re not being duped by a shady broker, do your research, make sure there are no complaints, and read through all the fine print on documents.
  • Try opening a mini account with a small balance first, and make trades for a month before attempting a withdrawal.
  • If you see buy and sell trades for securities that don’t fit your objectives, your broker may be churning.
  • If you are stuck with a bad broker, review all your documents and discuss your course of action before taking more drastic measures.

Separating Forex Fact From Fiction

When researching a potential forex broker, traders must learn to separate fact from fiction. For instance, faced with all sorts of forums posts, articles, and disgruntled comments about a broker, we could assume that all traders fail and never make a profit. The traders that fail to make profits then post content online that blames the broker (or some other outside influence) for their own failed strategies.

One common complaint from traders is that a broker was intentionally trying to cause a loss in the form of statements such as, “As soon as I placed the trade, the direction of the market reversed” or “The broker stop hunted my positions,” and “I always had slippage on my orders, and never in my favor.” These types of experiences are common among traders and it is quite possible that the broker is not at fault.

Rookie Traders

It is also entirely possible that new forex traders fail to trade with a tested strategy or trading plan. Instead, they make trades based on psychology (e.g., if a trader feels the market has to move in one direction or the other) and there is essentially a 50% chance they will be correct.

When the rookie trader enters a position, they are often entering when their emotions are waning. Experienced traders are aware of these junior tendencies and step in, taking the trade the other way. This befuddles new traders and leaves them feeling that the market—or their brokers—are out to get them and take their individual profits. Most of the time, this is not the case. It is simply a failure by the trader to understand market dynamics.

Broker Failures

On occasion, losses are the broker’s fault. This can occur when a broker attempts to rack up trading commissions at the client’s expense. There have been reports of brokers arbitrarily moving quoted rates to trigger stop orders when other brokers’ rates have not moved to that price.

Luckily for traders, this type of situation is an outlier and not likely to occur. One must remember that trading is usually not a zero-sum game, and brokers primarily make commissions with increased trading volumes. Overall, it is in the best interest of brokers to have long-term clients who trade regularly and thus, sustain capital or make a profit.

Behavioral Trading

The slippage issue can often be attributed to behavioral economics. It is common practice for inexperienced traders to panic. They fear missing a move, so they hit their buy key, or they fear losing more and they hit the sell key.

In volatile exchange rate environments, the broker cannot ensure an order will be executed at the desired price. This results in sharp movements and slippage. The same is true for stop or limit orders. Some brokers guarantee stop and limit order fills, while others do not.

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Even in more transparent markets, slippage happens, markets move, and we don’t always get the price we want.

Communication Is Key

Real problems can begin to develop when communication between a trader and a broker begins to break down. If a trader does not receive responses from their broker or the broker provides vague answers to a trader’s questions, these are common red flags that a broker may not be looking out for the client’s best interest.

Issues of this nature should be resolved and explained to the trader, and the broker should also be helpful and display good customer relations. One of the most detrimental issues that may arise between a broker and a trader is the trader’s inability to withdraw money from an account.

Broker Research Protects You

Protecting yourself from unscrupulous brokers in the first place is ideal. The following steps should help:

  • Do an online search for reviews of the broker. A generic internet search can provide insights into whether negative comments could just be a disgruntled trader or something more serious. A good supplement to this type of search is BrokerCheck from the Financial Industry Regulatory Authority (FINRA), which indicates whether there are outstanding legal actions against the broker. And if appropriate, gain a clearer understanding of the U.S. regulations for forex brokers.
  • Make sure there are no complaints about not being able to withdraw funds. If there are, contact the user if possible and ask them about their experience.
  • Read through all the fine print of the documents when opening an account. Incentives to open an account can often be used against the trader when attempting to withdraw funds. For instance, if a trader deposits $10,000 and gets a $2,000 bonus, and then the trader loses money and attempts to withdraw some remaining funds, the broker may say they cannot withdraw the bonus funds. Reading the fine print will help make sure you understand all contingencies in these types of instances.
  • If you are satisfied with your research on a particular broker, open a mini account or an account with a small amount of capital. Trade it for a month or more, and then attempt to make a withdrawal. If everything has gone well, it should be relatively safe to deposit more funds. If you have problems, attempt to discuss them with the broker. If that fails, move on and post a detailed account of your experience online so others can learn from your experience.

It should be pointed out that a broker’s size cannot be used to determine the level of risk involved. While larger brokers grow by providing a certain standard of service, the 2008-2009 financial crisis taught us that a big or popular firm isn’t always safe.

The Temptation to Churn

Brokers or planners who are paid commissions for buying and selling securities can sometimes succumb to the temptation to effect transactions simply for the purpose of generating a commission. Those who do this excessively can be found guilty of churning—a term coined by the Securities and Exchange Commission (SEC) that denotes when a broker places trades for a purpose other than to benefit the client. Those who are found guilty of this can face fines, reprimands, suspension, dismissal, disbarment, or even criminal sanctions in some cases.

SEC Defines Churning

The SEC defines churning in the following manner:

Churning occurs when a broker engages in excessive buying and selling of securities in a customer’s account chiefly to generate commissions that benefit the broker. For churning to occur, the broker must exercise control over the investment decisions in the customer’s account, such as through a formal written discretionary agreement. Frequent in-and-out purchases and sales of securities that don’t appear necessary to fulfill the customer’s investment goals may be evidence of churning. Churning is illegal and unethical. It can violate SEC Rule 15c1-7 and other securities laws.

The key to remember here is that the trades that are placed are not increasing your account value. If you have given your broker trading authority over your account, then the possibility of churning can only exist if they are trading your account heavily, and your balance either remains the same or decreases in value over time.

Of course, it is possible that your broker may be genuinely attempting to grow your assets, but you need to find out exactly what they are doing and why. If you are calling the shots and the broker is following your instructions, then that cannot be classified as churning.

Evaluate Your Trades

One of the clearest signs of churning can be when you see buy and sell trades for securities that don’t fit your investment objectives. For example, if your objective is to generate a current stable income, then you should not be seeing buy and sell trades on your statements for small-cap equity or technology stocks or funds.

Churning with derivatives such as put and call options can be even harder to spot, as these instruments can be used to accomplish a variety of objectives. But buying and selling puts and calls should, in most cases, only be happening if you have a high-risk tolerance. Selling calls and puts can generate current income as long as it is done prudently.

How Regulators Evaluate Churning

An arbitration panel will consider several factors when they conduct hearings to determine whether a broker has been churning an account. They will examine the trades that were placed in light of the client’s level of education, experience, and sophistication as well as the nature of the client’s relationship with the broker. They will also weigh the number of solicited versus unsolicited trades and the dollar amount of commissions that have been generated as compared to the client’s gains or losses as a result of these trades.

There are times when it may seem like your broker may be churning your account, but this may not necessarily be the case. If you have questions about this and feel uneasy about what your advisor is doing with your money, then don’t hesitate to consult a securities attorney or file a complaint on the SEC’s website.

Already Stuck With a Bad Broker?

Unfortunately, options are very limited at this stage. However, there are a few things you can do. First, read through all documents to make sure your broker is actually in the wrong. If you have missed something or failed to read the documents you signed, you may have to assume the blame.

Next, discuss the course of action you will take if the broker does not adequately answer your questions or provide a withdrawal. Steps may include posting comments online or reporting the broker to FINRA or the appropriate regulatory body in your country.

The Bottom Line

While traders may blame brokers for their losses, there are times when brokers really are at fault. A trader needs to be thorough and conduct research on a broker before opening an account and if the research turns up positive for the broker, then a small deposit should be made, followed by a few trades and then a withdrawal. If this goes well, then a larger deposit can be made.

However, if you are already in a problematic situation, you should verify that the broker is conducting illegal activity (such as churning), attempt to have your questions answered, and if all else fails, and/or report the person to the SEC, FINRA, or another regulatory body that could enforce action against them.

AxnFX – Is It Safe?

Stop! It’s a Scam! Your money is not safe if you are trading with this unregulated, off-shore broker.

AxnFX – DO NOT TRADE WITH THIS PROVIDER

AxnFX is a Forex broker that offers its customers 3 different account types to trade with:

  • Classic: This account requires you to make a minimum deposit of $100 before you can start trading on it.
  • Premium: This account type requires a $2,000 minimum deposit to be made before you can start trading on it.
  • Pro: If you wish to open a Pro account, then you need to first make a minimum deposit of $5,000.

The leverage offered for all three accounts is 1:400, which is quite advantageous for the trader. However, we do not have any other information about the trading conditions AxnFX offers.

Try these regulated brokers if you want to start trading cryptocurrencies

Plus500 is a FTSE 250 listed brokerage providing online trading services in CFDs, across 2,000+ securities and multiple asset classes.

Founded: 2020

Regulations: Regulated

Languages: English

Deposit Methods: Visa, MasterCard, Bank Wire, Skrill, Neteller

Minimum Deposit: $100

Free Demo Account: No

Number of Assets: N/A

Types of Assets: Forex, Commodities, Indices, Stocks, Equity

Trading Accounts and Conditions

AxnFX is a Forex broker that offers its customers 3 different account types to trade with:

  • Classic: This account requires you to make a minimum deposit of $100 before you can start trading on it.
  • Premium: This account type requires a $2,000 minimum deposit to be made before you can start trading on it.
  • Pro: If you wish to open a Pro account, then you need to first make a minimum deposit of $5,000.

The leverage offered for all three accounts is 1:400, which is quite advantageous for the trader. However, we do not have any other information about the trading conditions AxnFX offers.

AxnFX – Advantages

When reviewing any broker, we try to find both positives and negatives about it. After going through AxnFX’s website and trading platform, these are the positives we were able to find about it:

Low Minimum Deposit Amount

Most brokers require you to deposit a minimum of $250 before you can start trading on their platform. However, AxnFX needs you to make a minimum deposit of just $100, which is on the lower end of the spectrum, and an advantage.

High Leverage

This broker offers its customers a high leverage of 1:400, which is something that will appeal to all types of risk-oriented traders.

However, we also have to warn our readers that having a high leverage also comes with high risk, which is why many regulators across the world have set a limit on the kind of leverage that brokers can offer their customers.

MetaTrader 4 Platform Offered

The fact that AxnFX offers its users the MT4 trading platform is a big plus for the broker. The MT4 platform is by far the most popular in the trading world today, since it is easy to use, and comes loaded with extra features such as automated trading bots, multiple charting options that can be customized to your requirements, etc.

Added to the desktop version, AxnFX also offers its users the mobile version of the MT4 platform.

Payment Options

AxnFX offers its customers both Skrill and Neteller as payment options – besides the traditional debit/credit cards and bank wires. The fact that the broker offers multiple payment options can be viewed as another point in its favor.

AxnFX – Disadvantages

When you look at the list of advantages that this broker has to offer, it may tempt you into signing up with AxnFX. However, we would recommend that you read out entire review before you do so. The broker’s list of disadvantages unfortunately far outweighs its advantages.

Offshore Broker

AxnFX is an offshore broker that claims to be based in the Seychelles. It’s license (no. 191108) has been issued by the Financial Services Authority of Serchelles.

The reason this has been deemed as a disadvantage is because this regulator is known for its lax regulations, making it easy for unscrupulous brokers to work through loopholes.

The biggest issue with the FSA in the Seychelles is that it does not offer traders financial protection from broker bankruptcy or frauds and scams.

So, the fact that AxnFX is registered with a regulator such as the FSA in Seychelles is actually a disadvantage since there is no protection for you in case this broker decides to scam you.

Plus500

Plus500 is a FTSE 250 listed brokerage providing online trading services in CFDs, across 2,000+ securities and multiple asset classes.

AvaTrade

The company was created as a combined effort of financial professionals and experts in web-commerce with the goal of perfecting the online experience for retail traders.

No Demo Account

All reliable brokers offer their clients a demo account so that they can test the trading conditions set and how the platform works. However, AxnFX does not offer any demo account, so we were not able to see what the actually trading platform actually worked well.

No Trading Conditions

The broker has not given any information about its trading conditions – with the exception of the leverage it offers. This is a huge red flag for us, since it means that a trader will be going in blind. You don’t know what transaction fees you will be charged if you trade with this broker.

We also could not get any information about the spread offered by this broker, which is a big negative. Without having information on the spread, a user cannot make informed decisions about how to execute traders.

No Mention of Withdrawal Fees

We also went through the broker’s terms and conditions and could not find any details about the withdrawal fees AxnFX charges its customers. This means that you could be hit with surprise fees when you try to withdraw your money.

Which is why we always advise our readers to only deposit the minimum required amount to test the broker before investing more money.

Trading Bonuses

AxnFX also offers trading bonuses, which are a trap for unwary traders. The broker will not allow you to withdraw your funds until you have achieved an impossibly high trading volume target.

Most regulated markets have banned the use of trading bonuses to attract customers because of its unfair terms. So, the fact that this broker offers trading bonuses is definitely a big reg flag for us and it leads us to warn you against trading with AxnFX.

To Sum Up Our Impression of AxnFX

This is what we think of AxnFX:We went through AxnFX’s website in great detail, and after having done so, we have reached the conclusion that this is not a broker that is safe. There are too many glaring issues such as it being weakly regulated, the broker not proving information about its trading conditions or withdrawal fees and the offer of trading bonuses.

Conclusion

We would recommend that you avoid this broker completely and choose a strongly regulated and reputed broker to trade with instead.

AXNFX Review: Scam or Reliable Forex Broker?

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