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How can we identify the quality of a foreign exchange trading platform? Supervision information, deposit and withdrawal method and time, platform website domain name information, transaction cost, slip point, transaction restriction, platform mode and tips for identifying black platforms.

I. Regulatory information

Evaluating the regulatory information of the enterprises affiliated to a platform is the most important channel to evaluate the scale and security of a platform. Whether the platform holds a regulatory license and what level of qualification it holds will determine the scale and security of the platform.

There are six well-known foreign exchange retail regulators in the world, namely NFA/CFTC (National Futures Association), FINMA (Swiss Financial Market Supervision Bureau), FCA (British Financial Market Conduct Supervision Bureau), ASIC (Australian Securities Investment Committee) and FSP (New Zealand Financial Service Provider).

There are also many small supervision bureaus, such as Mauritius Financial Supervision Bureau (Mauritius FSC), British Virgin Islands Financial Supervision Bureau (British Virgin Islands FSC) and Malta Financial Services Supervision Bureau (MFSA).

The most stringent ones are NFA and FINMA, both of which require tens of millions of US dollars/Swiss francs as collateral assets, followed by FCA, which requires a registered capital of over 6.5438 million pounds, and ASIC requires a registered capital of several million Australian dollars. Finally, FSP and Cesc, etc. No funding threshold is required.

Among them, NFA and Fermat have extremely high requirements on the registered capital, operation and liquidity of enterprises, and enterprises with NFA are generally large enterprises with security guarantees. FCA has a FSCS financial services compensation plan. If the enterprise goes bankrupt, investors can get compensation of up to 50,000 pounds (provided that the account is opened in the UK and registered with FCA). The entry threshold of ASIC is high, but there is no compensation plan.

The following is a brief introduction to each regulator:

1, NFA (National Futures Association) and CFTC (Commodity Futures Trading Commission) cooperate to manage futures financial institutions. The United States is one of the most stringent regulatory agencies in the foreign exchange industry.

There are many financial institutions regulated by NFA, but so far, there are only a few platforms with foreign exchange qualifications (except the acquired GFT, ILQ and Knight Capital, which do not serve individuals), including some common platforms in China.

The NFA platform has many strict requirements, such as not being able to lock orders and having a maximum leverage of 50 times.

2. UK Financial Market Conduct Authority

Since FSA (2013), the Financial Services Authority (FSA) in Britain has been replaced by two new regulatory bodies, namely the Financial Conduct Authority (FCA) and the Prudential Regulatory Authority (PRA). Among them, the supervision right of brokers will be transferred from FSA to FCA. FCA is also a very strict regulatory agency, and there are not many platforms that can be fully authorized by FCA. In addition, it can provide investors with deposit insurance of 50,000 pounds.

note:

FCA: Many platforms called FCA are just listed, and their customers' accounts are not in the UK. If you want to open an account on the platform supervised by FCA, it is best to open an account in the UK, and the account deposit information must be the information registered by FCA. Many market-making platforms claim to hold FCA licenses, but their accounts are opened in Cyprus or Australia, so if something happens to the platform, you won't get any FCA protection. This situation is especially common, so be sure to keep your eyes open and make a good screening.

3. Swiss Financial Market Supervision Authority

Swiss regulation is very strict. Only banks can own foreign exchange retail business. At present, there are only two trading brokers who open accounts for individuals: Dukascopy and Swiss Quote. The advantage is extremely high security, but the disadvantage is that the account opening procedure is extremely complicated.

4.ASIC (Australian Securities Investment Commission), FSP (New Zealand Financial Service Provider) and CySec (Cyprus Securities Regulatory Commission)

Because of the extremely low cost of supervision and registration, these three regulatory agencies have no mandatory threshold and compensation scheme, and basically have no supervision effect.

Second, the way and time of deposit and withdrawal

1. Credit cards (some platforms are limited to local credit cards) generally require 1 hour-1 working day to deposit money and 7- 14 days to withdraw money. On most platforms, the principal part of the credit card deposit will be returned to the credit card, and the part that exceeds the deposit amount (profit part) can only be paid by wire transfer. Generally speaking, there is no handling fee for deposit and withdrawal of credit cards, but in China, it is necessary to settle and pay the corresponding handling fee to exchange RMB for UnionPay cards.

2. It takes 30 minutes-1 working day for UnionPay card to deposit money, and 1-5 working days for UnionPay card to withdraw money. Generally speaking, it is normal for UnionPay cards to receive money within 5 working days, because it takes time to review, purchase foreign exchange and bank accounts. UnionPay deposits and withdrawals are generally free, and the renewal fee is generally not more than 1%.

3. It takes about 2- 14 working days to deposit and withdraw money by wire transfer. This method is supported by any platform. Generally, the transfer bank needs to deduct the handling fee of $65,438 +05-40, regardless of the platform.

note:

1) Because there are some third-party payment platforms in China, and most of them have the right to purchase and sell foreign exchange, foreign platforms can also support UnionPay card deposits and withdrawals, whether formal or informal.

2) The payee's information must be carefully checked to see if it is consistent with the supervisor's requirements. If it is inconsistent, there must be something wrong. In addition, it depends on the remittance bank. The quality platform deposits funds in trust accounts of quality banks, such as Barclays, Merrill Lynch, Bank of America, HSBC, BNP Paribas and Commonwealth Bank of Australia. If the remittance bank is an unknown bank, be careful.

3) Remittance to private account must be a fake platform.

Three. Website information and domain name information

Judging the website domain name traffic is one of the methods to identify whether a platform is qualified, because the company homepage with large customers will not be small.

1, website ranking and source query:

Query website:

You should choose a platform with a wide range of traffic sources (traffic from all over the world) and a high ranking of traffic, rather than a platform where you can't find any information.

2. Domain name information

Query method:

Pay attention to the domain name time, domain name registrar and resolution server:

Fourth, transaction costs.

At present, most platforms adopt the spread/commission profit model, that is, on the basis of the bank quotation spread, plus a certain spread or commission, the transaction cost seen by our traders is finally formed.

In the five-digit platform, a spread refers to the standard definition, that is, the fluctuation of foreign exchange is 0.000 1, the fluctuation of gold is 0. 1, the position of standard hand is 1, and the fluctuation of 1 is 10.

Generally speaking, the floating low spread+commission mode is mostly STP/ECN mode, the high fixed spread is mostly market maker mode, and the high floating spread is mostly added by agents. (STP/ECN/MM/NDD and other modes will be described below).

Verb (abbreviation for verb) sliding point

Slip point refers to the situation that the final transaction price is inconsistent with the entry price or stop loss price set by the trader, including the trading of take profit, stop loss, limit order and breakthrough order of position orders. Therefore, there are forward sliding points and reverse sliding points, but generally speaking, what people call sliding points is unfavorable to traders.

The financial market is a matchmaking transaction. When you buy it, there must be another person selling it at the other end of the market. If no one sells when you buy, your order will be sold at the nearest selling price. Stocks also use this mechanism. Buy one and sell one, and the prices next to them are all bidding. Due to the depth of the foreign exchange market, orders are at the level of 1000 billion to 1 trillion dollars. Generally, there is no lack of depth, so it will not slip.

But when the market fluctuates violently, such as minutes of central bank meetings, non-agricultural employment data, GDP data, etc. Due to the imbalance of the instantaneous buying and selling depth, the buying and selling price will increase, and the buying and selling will close at the latest buying and selling price, resulting in slippage.

In the past, platforms played the role of market makers, and they were obliged to keep bilateral quotations, accept all orders from traders, and hedge in the inter-platform market. However, due to the rapidly changing data market, it is impossible to hedge at the same price or even fail to hedge, resulting in huge risk exposure, that is, the platform trades orders at the price set by traders, but bears the losses caused by the price difference. When a large number of traders appear, this trading method will lead to a large number of losses for platform vendors. In the end, a number of platforms closed down, and later platforms no longer bear this part of the risk. When the customer's list is sold at the market price, there is a common slip, and there is a gap on the K-line chart or the minute chart, as well as a gap on the weekend.

So any regular platform will appear, and there should be slippage. The difference between the regular platform and the black platform lies in the time when the slip point appears. The regular platform will not slip in the ordinary market, and the slip point should only exist in the huge market, while the black platform will slip at any time.

Six, trading restrictions

1. Restrictions on pending orders: The time and place of pending orders will not be prohibited on the regular STP/ECN platform. If the platform prohibits pending orders or limits the time and price of pending orders, it means that the platform does not want customers to make profits, so you need to choose carefully.

2. Distance limit between pending orders and stop loss and take profit: ECN platform will not limit the distance between pending orders and stop loss and take profit. STP platform has a distance limit of 1 point -5 points, and market maker platform generally has a distance limit of 5 points-10 points. If it exceeds the 50- 100 limit of the platform, it can basically be determined as a black platform.

3, position restrictions, any type of formal platform will not have a time limit for holding positions, will not limit positions to more than a few minutes, nor will it limit overnight positions and data gambling. If there are restrictions, it is likely to be a black platform.

4. Restrictions on scalpers: Generally speaking, most formal platforms of any type will not restrict scalpers, because most platforms are profitable through the transaction fees of customers, and scalpers should be a trading behavior conducive to platform profitability; If the platform prohibits scalping, it is likely to be a harsh platform for gambling market makers or a black platform.

5.EA restrictions: EA restrictions generally exist in non-MT4/MT5 platforms and MT4/MT5 bridging platforms, which are caused by various technical reasons; Most of these platforms require customers to use the JAVA platform developed by the platform to conduct transactions. However, if a platform uses MT4/MT5 clients and is not a bridging platform, but EA transactions are prohibited or restricted, then it needs to be carefully selected.

Seven. Platform mode

There are two basic modes of retail foreign exchange trading platform, one is market maker mode (MM) and the other is non-dealer mode (NDD). Among them, NDD mode is divided into ECN mode and STP mode.

1. Market maker mode: foreign exchange market maker (MM)

A market maker is a company that provides you with buying and selling orders. Usually, they are also called trading desks (DD) trading platforms. Your order or "invoice price" has never been linked to the market for the simple reason that brokers are the market. Brokers are interested in your losses because your losses mean their profits. Market makers usually don't re-quote orders, because they don't need to enter the price you give into the interbank market, but simply choose whether to accept your order. For example, when too many traders place orders for a currency pair in the same direction, the market maker may not want to bear all the risks and can match some of them.

2.NDD mode is divided into STP mode and ECN mode.

1)STP mode: straight-through processing system

STP broker is another form of market maker broker. This kind of securities firm, most of the time, displays its own quotations (quotations that are related to inter-bank quotations). The characteristic of STP brokers is that they sometimes put your quotation into the market, but market makers don't.

For example, profitable orders or particularly huge orders will be automatically put on the market, while loss-making customers or very small orders will not. In this way, brokers have two profit models, the loss of lost customers and the spread profit of profitable customers. (Of course, brokers can't completely distinguish between profit orders and loss orders, and they will control the proportion through the risk control department. )

In this case, the profits of STP brokers come from two aspects: one is the loss of failed customers, and the other is the commission of successful customers. For example, if you trade two spreads, the broker trades with another broker or bank in the interbank market, and the quotation is the same, one spread, without any risk.

This model is also the reason why all your re-quotations and orders are rejected in the transaction. When you open a large order, the broker puts the price in the interbank market, but the price there may have changed (the market sometimes does change quickly), so these brokers are faced with a series of choices at this time: either refuse your order to adjust the price (STP method) or accept your price, and if this order is successful, bear the loss risk of the broker (MM method). According to the different risk control concepts of brokers, different treatment methods will be given.

2)ECN mode: electronic communication network.

ECN broker is the channel between you and the real market, in other words, ECN broker lets your order enter the market directly. The income of this kind of brokerage comes from a certain spread shown to you: for example, the real spread between the euro and the US dollar is 0.2 points now, then this brokerage may give you a spread of 0.5 points, which means that each transaction will charge you a spread of 0.3 points as a profit.

ECN brokers are generally large institutions or banks. For small retail foreign exchange, ECN's execution mode is usually out of reach. In view of the nature of his inter-bank transactions, traders are usually required to trade very large positions, so the minimum capital requirement of most ECN platforms is $654.38+$00,000 to $50,000.

Simple distinction method:

1, spread: STP or MM platform is fixed spread, ECN platform must be low spread+commission mode.

2. Repeated inquiry: STP platform or MM platform is used for repeated inquiry, and MM platform or black platform is used for fixed spread but never inquiry.

3.ECN platform is the one with infinite suspension, STP platform is the one with small suspension, and MM or black platform is the one with large suspension.

4.ECN and STP platforms have no time and price restrictions on pending orders, scalpers and positions, and MM has strict restrictions.

note:

The spread between banks is floating.

The floating range of the euro against the US dollar is 0-0.4.

The floating range of the pound against the dollar is 0-0.6.

The fluctuation range of USD against JPY is 0-0.3,

The floating range of the Australian dollar against the US dollar is 0-0.6.

The floating range of NZD against USD is 0-0.8,

The floating range of gold against the US dollar is 0. 1 1-0.28.

Eight, identify the black platform tips

1. Go to the homepage of the website to contact customer service, and check the English page of the platform to see if there is online customer service in English. If there is no English customer service, only Chinese customer service, then the platform is likely to be hacked.

2. The transaction cost of the formal platform should be within the normal range, that is, 0.9-3 euros and 0.2-0.6 gold. If it exceeds this range, there is a problem with the platform or the agent, so be careful.

3. Pay attention to the remittance information of the platform. If the wire transfer bank is not in a big bank in Britain and America, it is probably a black platform.

4. If you want to quickly identify whether the funds of a platform are stored separately from the account, the quickest way is to find a customer service or agent, say that you are abroad and can only wire transfer, and ask him for wire transfer information. If you can't get it out or you can't get it out, it must be a black platform.

5. If the address of the wire transfer bank is different from the location of the platform, for example, the money from the platform supervised by the UK is remitted to Australia, then it is probably a deck, and your money is not guaranteed.

6. Log in to the mobile phone's MT4 software to see if there is a server for this platform. If there is no server, then the MT4 of the platform is pirated MT4 software, which is a privately built platform and is common in domestic small black platforms.