BASIC Details
It appears from the business linking that Robert Gray changed the obviousness of the situation by moving his shares of FXSOL and IBFX into two holding companies:
BASIC Details
BASIC Details

Another very telltale sign that all of these companies are scamming people together is the price spikes present on charts from all of the companies at the same time. The prices are identical, down to the spikes.

If you look on the MT4 Server Manager features, you can see that sending price spikes is a listed manager feature from the dealing desk. MetaTrader 4 Manager — Forex Trading Platform MetaTrader 4 "sending quotations to the general dataflow on the server;" or in other words: inventing price spikes. If a price spike is seen 4 places with the same size, direction and timing but only on those 4 places, is it a leap of logic to claim that it is likely a single Dealing Desk is used and all four companies are using the same feed data from the same upstream server?

It is very strange for IBFX to claim they have no dealing desk at all, when the effects of such are clearly seen. Maybe they can claim "IBFX has no dealing desk" because they outsource that duty over to FXLQ? Velocity4X admits that they have no servers or equipment at all. IFBX blamed the strange spreads on their feed and that there was nothing they could do about it back in December. I have seen the MetaTrader 4 Server Administrator. If you have access to this screen, you can change the spread to a fixed value, a directional straddle over your feed, a maximum value, etc.

It's been close to two months since I started reporting on Dead Forex Firms Walking. Since my first post much has changed and the list is in need of an update. So here it is, Introducing:

NFA Dead Forex Firms Walking, version 2.0: (Adjusted Net Capital as of May, 2007, direct from the CFTC: http://www.cftc.gov/files/tm/fcm/tmfcmdata0705.xls)

Advanced Markets ($1,021,000)
American National Trading Corp ($1,985,000)
Bacera Corporation (Shutdown!)
Cal Finanical Corporation (Shutdown!)
Direct Forex ($1,406,000)
E FX Options ($2,631,000)
Forex Club ($2,873,000)
FiniFX ($1,314,000)
Forward Forex (Shutdown!)
FX Option1 Inc (Shutdown!)
GFS Futures & Forex ($2,223,000)
Hamilton Williams ($1,202,000)
MB Trading ($3,952,000)
Money Garden ($3,627,000)
Nations Investments (Shutdown!)
One World Capital ($1,502,000)
Performance Capital International ($483,000)
Royal Forex Trading ($1,088,000)
SNC Investments ($1,510,000)
Solid Gold Financial ($2,039,000)
Spencer Financial (Shutdown!)
Trend Commodities (Shutdown!)
United Global Markets (Shutdown!)
Worldwide Clearing (Shutdown!)
Wall Street Derivatives ($936,000)

Unregulated Firms (Buyer Beware)
GCI (?)
Cletus' Fishing & Forex (?)

So there you have it. A total of NINE licensed forex dealer members have recently been closed by the NFA. Anyone still doubt this new $5 million cap requirement rule will be passed soon? I didn't think so. Certainly more closures await the dead forex firms walking in the days ahead. Hopefully you won't have money in one of them when they go under. In any case, I'll be here to report all the gory details.

Thanks, as always, really instructive.

And in your personal opinion FXDD it's a better choice? I mean, they can make the same things because they use MT server.

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All MT4 brokers have the same capabilities. I distrust them all, but tried to find better brokers so I could use MQL4. My claim so far about FXDD is that I see less strange spikes. I compared the downloaded FXDD web site data vs their chart data and found that the chart sometimes delayed large movements. I have reason to believe the FXDD site downloaded data comes from their feed, while the chart data is delivered to their customers. It was very refreshing to compare feed vs chart and see very very few anomalies. You can't use Demo data for this at any broker, because the Dealing Desk probably won't spike the Demo data. Real data is required.

What I'm working on so hard is trying to get a free automated trading system up to connect to ECN. ECN can't send strange spikes because they have no single data stream. Every price comes from another trader. Looking at the level 2 data reveals much about the market. Trading on a bank still goes through a dealing desk, ECN are the only place I really feel that my trades won't be manipulated. ECN Trading

It might be possible to trade with banks directly and exclusively without a dealing desk, but that would involve becoming a ring member instead of a bank customer. To join an ECN or be a ring member is the same code: we need to implement FIX. Right now I can send command line messages but I'm still working on implementing the programmatic API. Volunteers welcome.

Do you think that we are more safe to invest with any regulated FCMs even some of them are shut down by NFA because none clients lose any money? However, unregulated firms will be more danger.

That's a good question. I would say first of all it is NEVER safe to invest in an unregulated company. You are not protected AT ALL. If someone put a gun to my head and said pick a firm, either a dead forex firm walking or an unregulated firm I would pick a dead forex firm walking. Because at least you can appeal to a regulator for help when it all hits the fan. But an unregulated firm is truly a game of Russian roulette. Fortunately, you don't have to make that choice. There are some MT4 brokers out there who are decently capitalized, InterbankFX and FXLQ for example. In either case if your heart is set on a dead forex firm walking I recommend at least waiting until the firm makes it clear they'll be able to meet the new capital requirement. For now it is just too much of a risk.

Big firms always have higher spreads and smaller firms. Maybe that it's why they are bigger. More competitions will just benefit traders like us. I will like to support smaller firms as long as they are regulated. If NFA does shut down a smaller firm, we should be able to get our money back.

As of August 2, 2007, this is where we stand in regards to the NFA proposal to raise capital requirements to $5 million:

FX Week states, "Following redrafting to include industry feedback, the proposals will be presented to the NFA board in August and then to the CFTC, and are not expected to be effective until the end of the year, the NFA explained."
http://www.fxweek.com/public/showPa....Fpage%3D459830

So if the proposal passes all the firms in the forex dealer dead pool, which from all appearances are currently meeting their capital requirement, will have several months to meet the new one. The big question is should this pass which will meet it and which ones won't? And for those that cannot meet the new requirement what will happen to the firms, and more importantly the customers of these firms? You could have a situation where one of the proprietors of these firms runs off with customer funds in the last hours. You could also see a situation where the NFA goes in to close a firm only to discover they have no money left and the firm then gets forced into bankruptcy.

Now, the likelihood of this happening to firms with $3 or $4 million in capital is a lot less than with firms with only $1.5 million in capital. But the whole point of this thread is to point these dangers out to the trading public and then let them draw their own conclusions.

I think NFA should do whatever it takes to pretect Forex traders instead of hurting them.

Page 42 of the current issue of Currency Trader Magazine (Free Subscription) has an article about the new NFA proposal. It reports on exactly what I have been saying these last few weeks. (Currency Trader Magazine -- July 2007)

Here are some key quotes from the article:

“The NFA wants to raise capital requirements for registered Forex Dealer Members (FDM) to $5 million, plus it wants improved accounting standards.”

“The proposal could potentially wipe out 90 percent of existing forex brokerages, although it’s likely major consolidation would occur if the rule passes.”

“Since 2000, the NFA has authorized Forex Dealing licenses to more than 50 firms. However, many of these firms went out of business because they were undercapitalized, and fraud continues to be a problem in the forex brokerage arena.”

“The NFA estimates the new rules, combined with existing rules, will force firms to have at least $10 million in adjusted net capital to remain in business.”

“The NFA listed four specific reasons for the rule change:

1) Trading Spot Forex, which FDMs do, creates more risk than trading futures and options listed on an exchange.
2) Since spot forex is not a priority under the NFA’s Bankruptcy Code, it’s particularly important for FDMs to have adequate capital.
3) Two of the three bankruptcy proceedings in which the NFA has taken part in the past four years have involved smaller FDMS…
4) The Case of CFG Trader which was shut down by the NFA and forced to liquidate all open positions because it was undercapitalized.”

So this is the third independent media source to confirm what I have been saying. Again, this doesn’t mean that all the firms in the Dead Pool are going under or that they are not currently meeting their requirements. But they are in a very precarious position. When the media is saying that the proposal “could potentially wipe out 90% percent of existing forex brokerages” then traders should sit up and take notice.