Recently, TradingSchools.Org published an article regarding Colmex Pro and Trade Net. How each company is owned by the same person: Meir Barak. And how something is definitely ‘fishy.’
In a nutshell, Trade Net is a trading educational company that can supposedly teach a person to make massive profits by learning the trading secrets of the founder, Meir Barak.
Meir is supposedly so confident that he can teach you ‘how to get rich’ at day trading, that he wants to give you free money to trade. But first, you must pay him $500 to $50,000 to learn his innermost day trading secrets.
Once you have paid Meir Barak his fee, he then converts these educational fees into a supposed live trading account at a CFD broker named Colmex Pro.
Meir Barak owns Colmex Pro.
Colmex Pro: It’s just a video game.
Colmex Pro is a CFD, or Contracts For Difference stockbroker, located on an island far, far away from any sort of reputable regulatory authority. CFD’s are also highly illegal financial instruments in the United States.
CFD’s or Contracts For Difference are nothing more than tiny promissory notes between two parties. If party A wins its wager, then party B must lose its wage. It is always a binary outcome: one must win and one must lose. Meir Barak owns Colmex Pro. He takes the opposite of every wager that traders place on the Colmex Pro trading platform. When a trader loses a trade at Colmex pro, then Meir Barak is the winner.
There is no other possible outcome. This is a fact.
CFD’s have no financial backing whatsoever. They are just simulated financial instruments between two parties.
When you buy or sell a CFD, you are essentially playing a video game. An online video game. Where the payouts rely upon the whims and fancies of the designer of the video game.
Video games are meant to be addictive. They all start off easy and then become progressively more difficult. It is within this progressive difficulty that an addiction is formed.
Anyone that plays video games knows how addicting and time-wasting these games can be.
Colmex Pro is essentially a provider of financial video games. But these games are camouflaged as legitimate stock trading transactions. They are not. They are nothing of the sort.
Colmex Pro, as a business, must rely upon the continued losses of their patrons.
Trade Net, as a business, will supposedly teach you the secrets of successful trading at Colmex Pro. Both cannot be true.
Contracts for Difference are Illegal
In the United States, CFD’s or Contracts for Difference are illegal. There are multitudes of reasons why, and I will furnish those reason later in this article.
So, if CFD’s are illegal in the United States, how does Colmex Pro operate within the borders, and on the playing field of the worlds most reputable financial markets…the United States?
They have constructed a clever loophole.
Trade Net Educational Products: Its just a loophole
The United States stock market is a highly regulated ecosystem. It is the gold standard of investor safety. No other country on the planet provides such robust consumer protections as the Securities and Exchange Commission and the Commodity Futures Trading Commission.
In addition, all transactions that occur within this tightly integrated ecosystem are also protected with financial insurance provided by FINRA or Financial Industry Regulatory Authority. Basically, if your money is stolen, then FINRA will reimburse your losses.
This is why the United States capital markets are a safe haven for a world rife with despots, crooks, dictators, and financial scoundrels of every stripe. If your money is invested in US, its pretty darn safe.
Trade Net and Colmex Pro have devised a scheme in which to interact within this safe and secure financial system. They have created a ‘backdoor’ and are actively exploiting a loophole in our legal system which is currently giving them access to US based investors.
Their operation within the implied credibility of the United States based financial system is essentially a great big “FUCK YOU” to the regulatory authorities.
Conversion: You give us American dollars, we give you free magical money.
So how does the scheme work? Its really simple.
Trade Net is a trading educational provider. There are hardly any regulations regarding what a trading educator can, or cannot do.
Trade Net solicits investor accounts through a network of affiliate marketers, social media, and boiler room sales operations.
Investor A purchases a ‘trading educational package’ priced from $500 to $50,000 per person, through Trade Net. These monies are then immediately converted into a CFD trading account at Colmex Pro.
And just like that…they have circumvented all regulatory restrictions for all United States based operations.
It looks and feels completely legitimate. It has the veneer of legitimacy. It has the fancy looking website and a trading platform similar to US-based operators. But once you peel away the thin veneer, you find something completely illegitimate.
Why would anyone do this to themselves?
So, why would an investor willingly hand their money to a company with zero legitimacy?
1) They believe that the owner of the company is going to teach them the precious secrets to financial prosperity. Which simply cannot be true, because the owner of the educational company (Trade Net) also owns the brokerage (Colmex Pro). And the brokerage cannot be profitable unless the traders lose their money.
2) The CFD broker gives the victim outrageous amounts of leverage, in comparison to US-based brokerages.
Example: Legitimate brokerages that operate within the regulatory framework can usually only offer 2:1 leverage for stock trading transactions. For every dollar deposited, the investor can leverage up two dollars. For small stock trading accounts, it simply is not enough.
However, the CFD broker is not bound to any such regulations. Colmex Pro offers 20:1 leverage. Which gives the desperate, small account investor a mirage of liquidity. A mirage of opportunity.
Notice how I use the word ‘Mirage.’ That’s because it is only a mirage. It is not a real thing. It is just an imaginary blip within a video game trading platform.
I will repeat this…Colmex Pro CFD trading is not real money trading. The 20:1 supposed leverage is not real, there is no legitimately attached financial backing.
But when people are desperate, or they are greedy, they tend to do stupid things. Like hand your money over to a play money video game operator.
Can you trust a CFD video game?
You cannot. The very genesis of a CFD brokerage is to encourage the players to lose money. Colmex Pro is no different. Their very survival depends upon the participants to lose all of their money.
Example: Colmex Pro/Trade Net offers a 20% sales commission for affiliates to encourage the unwitting to willingly hand over their money. Additionally, Colmex Pro/Trade Net also encourages purchasers to use a credit card. And the credit card companies typically charge 1.5% to 3% to process these transactions.
Think about this a moment. Trade Net/Colmex Pro are willing to pay an upfront fee of over 20% sales commissions to unscrupulous internet promotors. Colmex Pro/Trade Net is so confident in their ability to drain the account of the victim, that they are actually willing to take an upfront loss of +20% for the opportunity to drain the remaining 80%.
Colmex Pro/Trade Net also operates a massive boiler room, where aggressive salespeople are also paid commissions to contact customers to ‘upsell’ additional education products, that convert into Colmex Pro CFD ‘video game money.’ And according to our sources, many of these boiler room salespersons came directly from the outrageously fraudulent binary options industry.
God only knows what commissions these boiler room salespersons are earning, on top of the 20% they are already paying out to affiliate promotors.
Remember: Colmex Pro and Trade Net are owned by the same person: Meir Barak.
Start your own stock brokerage!
After I published the previous article regarding Trade Net and Colmex Pro, I began to receive a deluge of private emails from users. The biggest question was,
“How do I start an offshore stock brokerage offering CFD’s?”
“This looks like the perfect scam. Why didn’t I think of this?”
Great questions! I am going to now give you the blueprint on how to start your very own TradeNet/Colmex Pro! And for me, this is easy. As a former high priest in the Temple Of Fraud, I understand these sorts of things.
Step 1) The first thing you need to do is throw up a website offering live day trading educational services. Promise the sun, moon, stars, and massive profits. Basically, herd as many sheeple into your FREE live trading room as possible:
Include tons of images with bikini babes, rented sports cars, gold watches, a yacht, and perhaps even your very own spaceship (Anton Kreil). And don’t forget to include bottles of champagne and unlimited shrimp cocktail.
Oh, and most importantly, proclaim to the entire world your amazing winning trades!
Don’t forget to hire a bunch of stooge affiliate marketers! Because this provides an additional layer of ‘social proof’ that everyone is getting rich.
Toss in a few “educational” trading packages, which of course, will be converted into Colmex Pro CFD trading accounts.
Now, all you need is to throw together your very own Contracts For Difference (CFD) stock brokerage.
Thankfully, this is the easiest part of all.
Start your own Contracts For Difference Stock Brokerage in only 72 hours!
This is the crazy part. I stated in the above header, “Start Your Own CFD Brokerage in 72 hours!” Yep, anyone can do it.
And the best part? You can do this with ZERO MONEY DOWN.
Don’t believe me? Well, any of the following companies will gladly set up your very own CFD Brokerage in just a few clicks of the mouse. And with NO MONEY DOWN. Begin accepting deposits as quickly as you can lie and bullshit people into trusting you.
- https://www.b2broker.net
- https://turnkeyforex.com
- https://www.fxopen.com
- https://uptrader.io
- https://www.cmtrading.com
- https://www.stofs.com
- https://pricemarkets.com
- https://www.etxcapital.com
- https://www.marketsforu.com
- https://admiralmarkets.com
- https://www.ifmtrade.com
- https://www.gcitrading.com
- http://axiprime.com/white-label
- https://en.swissquote.com
- https://keytomarkets.com
- http://directfx.com
- https://www.aaatrade.com
- https://gbebrokers.com
- https://www.bernstein-bank.com
- https://www.fxglobe.com
Wow, so many companies in which to choose!
But, you would think that these companies would make plenty of effort to weed out anyone looking to scam and rip off consumers. Right?
Wrong. In fact, its about the shadiest environment I have ever witnessed.
Example: with several of these companies, the only requirement was that I send over a government-issued ID card. Wow, anyone can provide a government-issued identification card. And so, to have a little fun, and convey to my audience just how ridiculous this situation, I sent over the following government-issued identification card.
I would like to use my Federal Prisoner ID Card.
To my shock and utter amazement, the Federal Prison ID card didn’t create much of a hub-bub. I thought to myself…who would be crazy enough to let me open a stock brokerage?
Additionally, a simple background check through FINRA reveals all of my past misdeeds. It’s not hard to find. Apparently, none of this is a disqualifying factor to many of these “white label” providers.
It seems, the only thing of interest was the size of my internet audience, whether I had a large social media following, and if I had an advertising budget for Facebook advertising.
Granular Control of the CFD Trading Platform
After you are approved for your very own CFD brokerage, you will then be given back office control to manipulate various aspects of your trading platform.
I had a lot of questions that needed to be answered, which included:
- How can I loosen or widen the spreads for individual traders?
- Can I add or subtract volatility in the pricing of securities, beyond the official NYSE data feed?
- What sort of roadblocks can I employ that make it more, or less difficult for traders to profit?
- Can I create CFD simulators where people trading simulated accounts can profit easily? And those with live accounts will not profit as easily?
- Can I add or subtract trades to give the impression that certain accounts are highly profitable–without actually taking any trades?
- Can I process deposits into non-traceable bank accounts?
- Can my CFD brokerage have a non-traceable server address to avoid United States regulators?
ANSWERS BELOW:
1. Yes, with only a mouse click, the CFD brokerage software can add or widen spreads to batches of securities. Or, if any trader reaches a certain profitable threshold or is too successful, then mechanisms can be deployed to ‘favor the house’ and decrease trader profitability.
2. Yes, suppose a trader uses limit orders to enter trades. Volatility can be decreased so that virtually none of these limit orders will be filled. The trader will then be forced into trading at the more expensive ‘Market’ price.
3. Yes, measured and metered volatility can be added to any individually assigned trader. This results in a higher number of resting stops being filled for losses.
4. Yes. Like a casino, the ‘FREE PLAY’ slot machines can be rigged for easy payouts. Once a trading account is funded with real money, the regime switches from ‘FREE PLAY’ mode to ‘THE HOUSE ALWAYS WINS’ mode. The customer never ‘feels or sees’ the subtle transition.
5. Yes. Since you control the account ledgers, you can create custom accounts used for ‘marketing purposes.’
6. Yes. A third party company processes Paypal and credit card deposits and then converts deposits into virtual currency, which are then forwarded to a non-traceable wallet address.
7. Yes. All web traffic can be routed through VPN’s or Virtual Private Networks to confuse the exact location of the CFD brokerage.
Outrageous Answers
Many readers are probably shocked by some of these answers. Truth be told, I was shocked myself.
But the simple truth is that when I started this journey of discovery, regarding the CFD industry, I simply did not know what questions needed to be asked.
Thankfully, the helpful folks at the CFTC or Commodities Futures Trading Commission provided me with a list in which to start and explore.
Most importantly, they gave me direct examples of how most CFD and offshore Forex brokerages routinely scam their customers. It is their hope that consumers seriously consider doing business with many of these companies. That consumers consider how many of the schemes that are deployed to drain the accounts of the customers are very subtle and hard to detect.
For these reasons, it should now become more apparent why CFD’s or Contracts For Difference are highly illegal products in the United States. Because it’s too easy to cheat and steal.
Wrapping things up
I am sure that this article is going to offend many people. In particular, anyone that regularly trades CFD’s. Or, countries that from which many of these CFD brokerages freely operate.
Many folks will scream and cry, “but these brokerages are regulated by CySEC, Israel Securities Authority, Australian Regulation Authority, South African Financial Services Board, The Sovereign Government of Lichtenstein, or The Pasha Of Punjab Province!
In future articles, we will address these very issues. For instance, suppose that you have a CFD account from a brokerage located in South Africa, and your money has now mysteriously disappeared? Or, you feel that your CFD trades were manipulated and you would like to register a complaint with the Israel Securities Authority? What is the process of filing a complaint? And do these supposed “regulatory authorities” even respond to complaints?
Is future articles, we will be exploring many real-world examples and filing actual complaints in hopes of sparking an investigation. We will see whom actually cares about consumers? And whom is just paying ‘lip service?’ Hint: you are not going to like what I find.
Thanks for reading. This was yet another crazy long article. If you made it this far…you are a champ! And don’t forget to leave a comment below. I especially want to hear dissenting opinions.
I had joined the trading room just to see what is going on. It is, like all trading rooms I have joined (I join just to see what they do, I don’t need them), a joke. These guys often trade stocks with low %ROI, so if you have a small account you will never make enough money to live and grow your account. Like TSLA, you can only make $60 on a $5 move in the stock if you have a $10,000 account, because you can only buy 12 shares at it’s current $800 a share price. Or trading BA, a $200+ stock for a couple dollar move. What a waste of time. They (Meir and the mods), often enter trades at the wrong time, or in the wrong direction, and they lose way too much for people who are supposed to be experienced traders. Meir says he loses 2 out of 5 trades…that is terrible. I lose on maybe 1 out of 10, and only a tiny bit on any loss, because I get out as soon as a trade goes against me, I don’t wait to see what happens. I am in and out every few minutes (1 to 5 usually). If I am in a trade for more then 10 minutes it means I was wrong because the stock didn’t do what I thought it would. They get in trades and ride them up and down for 15, 30, even 60+ minutes. That is crazy. They also don’t trade cheap stocks, they say those are garbage. Cheap stocks move the most as a %ROI. For the price of 1 TSLA share you can buy 200 of a $4 stock. If the $4 stock moves .20 cents, you make $80. TSLA would have to move $80 to make the same profit, it doesn’t move $80 in an entire day! $4 stocks move a lot more than .20 cents in a day. It’s just simple math, but he had no answer except that they are all garbage or pump and dumps. I didn’t say buy then for a long-term investment, we are talking about day trading them, who cares about the company, it is just a ticker to trade…Meir is a an idiot, and shouldn’t be teaching trading. Anyway, when I confronted Meir about the %ROI and cheap stock thing on YouTube in a comment section, he just gave me a 2 sentence answer that was condescending and never actually addressed my comment. When I replied and pressed harder, he never replied again. And BTW, he has his YT comment section on Monitor mode so he can selectively monitor which comments will show. I have multiple YT accounts, so can check what shows by viewing the comments in another account. Only a person who has something to hide would use the Monitor option in their comment section, unless maybe they covered very controversial topics and didn’t want people trashing each other. But there should be no good reason to monitor comments in a trading channel…very fishy.
Another weird issue with Tradenet: I had 2 friends who are long time, highly profitable, day traders, join their high level account. They have a level they don’t advertise that you can get 600K buying power for $25K. They told me about it and then gave my number to the Tradenet sales person, The guy called me the same day and we talked and I gave him my email address just to get him off of the phone, I wasn’t interested, I have all I need with my broker of over 2 decades. He kept calling me and emailing me, sometimes several times a day, but I never replied. Finally I sent him an email and told him not to contact me anymore. By that time my 2 friends had closed their accounts because they said they were getting really bad fills, and were having problems getting their profits out of their Tradenet accounts. So to sum it all up, don’t sign up for anything. Anyone who is a great and profitable trader is not going to have a trade room. Why would they? It distracts from their trading. I could have a trade room. But then I can’t really trade well. It is too distracting. And If I call an entry/exit and several people pile in on my call, the stock price would be greatly effected, and mess up my trade. Those who can, do…those who can’t, teach. Trading rooms are run by people who are (maybe) good teachers, not by good traders. Trade rooms and lesson courses only make money for those who own them, not those who use them.
Look, if you want to learn day trading, there is more than enough free info on the net. You DO NOT need to pay for any advice. There is nothing worth paying for, trading is not complicated, and there are no special secrets and strategies. Just learn the basic chart patterns, like Bull Flag, Cup & Handle, etc. Here’s a link: https://www.centralcharts.com/en/gm/1-learn/7-technical-analysis/27-chart-patterns
And learn a few basic candlesticks, like bullish engulfing, hammer, etc…I use maybe 3 or 4 candlesticks, and a dozen chart patterns, that’s it. Beyond that is just voodoo to me.
And then the most important thing is to put in screen time. Hundreds of hours of screen time while the market is open. Pick a ticker, use the 1 minute chart in the candle format, and closely watch how the price moves. Try to learn to predict what the next minute will do, based on what has already happened. After a while it will start to make sense. Price charts are based on human behavior, and that never changes. Charts look the same as they did 50 years ago. The price patterns just keep repeating themselves throughout the day.
So learn the movements…and that can only be done by staring at charts for hundreds of hours. When you feel confident, then try trading 1 share at a time (there are no commissions). If you can make a profit, then do 5 shares, then 20, 50, etc. That way you build confidence and skill without losing too much money. Get a scanner and scan for the gap ups and % gainers in the pre market. Those will be the runners for the day. Check why they are up. If it’s weak news, or no news, likely it will drop at the open, or go up a bit, then drop. You can long the run, then short the drop. If great news, it’s maybe an all day runner. Most trading platforms have a free scanner and news, so no need to pay for fancy scanners, and news services, it’s wasting money. I use the TOS platform, and have since the 90’s. Stocks don’t go straight up or down, They go up, then pull back, go up then pull back. They do down, pull up, go down, pull up. Play the little pops and dips, in and out, you’ll make more money than just riding the stock for 15+ minutes.
Get on Twitter and follow people who make good stock calls for swing trades…and to see which stocks are the current hot plays for day trading. Zack Morris, Ripster_47, Traderstewie, are some on Twitter. Atlas Discord has a great free trading room if you want to find the current hot plays of the day.
After time it will all make sense (for some). Some will never be good. And some will just be okay. Not everyone is good at everything…that’s life.
Day trading has a 90+ percent failure rate, so not everyone will get to sit at home in their underwear and make a 6 or 7 digit salary….
Do enough research and recommendations. I got scammed by a Bitclub, after research I was recommended calgarysec-hack com and they were useful, they helped get most of it back.
I paid $8K+ for the TEFS trading platform, and from one day to the next I was not allowed to make money anymore since I was a US resident.”You can still trade, but not get payouts” is what they told me. Why the heck would I want to do that??? Anyway I feel royally scammed and I’m surprised this does not appear anywhwere online. I tried getting my money and of course they said, “the money was for education, not trading.” Even though I never used any of their courses. If anyone has any ideas to a recourse I can take I welcome it. Anyone opening an account with them is in danger of getting their hard earned money taken away.
I might be able to help. What state are you located in?
Hi Emmet, can you help me too. I was scammed over 2 years ago by Tradenet.
What happened?
I couldn’t agree more about the fraudnet (tradenet) ! AkA colmexpro.com! Aka tefsec.com it’s all run by the same jews who take real US dollars and give us magical money…when you start to make good money what they do is do anything to throw you off the game like pull the plug on the servers to get kick you for 30 mins until you get wiped out!! I lost over 50k to them..stupid me! I should have known what a scam they were..now I’m passionate about exposing them! F meir barak!!
why don’t you interview Meir ? He is a public person and for sure will accept
From the Colmex site “Eighty-eight percent of retail investors accounts lose money when trading CFDs with this provider.” all his students hey. Sad
So, is Tradenet legal or not?
Legal because of the loophole?
Or ilegal despite of the loophole?
I’m thinking to join Colmex (I’m from Germany).
Thanks
It’s legal, but legally you will most likely fail with their CFD account. Not worth wasting your time with a legal scam artist like Meir and his companies. You can try Interactive brokers, much better commissions and it’s a publicly traded company.
Hi Jason
This article is very informative but I still don’t get the legal part.
Scamming people, as far as I know, is legal.
So if it’s a scam, how could it be legal? What exactly is the loophole here?
This article is very informative but I still don’t get the legal part.
Scamming people, as far as I know, is legal.
So if it’s a scam, how could it be legal? What exactly is the loophole here?
Why don’t you open an account with a serious business with ZERO stock fees like Tastyworks.
So, is Tradenet legal or not?
Legal because of the loophole?
Or ilegal despite of the loophole?
I’m thinking to join Colmex (I’m from Germany).
Thanks
Why don’t you open an account with a serious business with ZERO stock fees like Tastyworks.
So, to get it clear, is Tradenet legal or not?
Yes, because of the loophole?
Or no, despite of the loophole?
Please answer as I’m thinking to join Colmex.
(I’m from Germany).
So I don’t understand something, is the money that tradenet funds into a costumer’s account, which I am aware is tradenet’s money… is that real money or are you saying that that’s fake?
I get that the CFD market could be a market you should tread carefully (as I was shocked about the low barrier to entry and instructions on manipulating the game for the benefit of the house), but it doesn’t seem necessarily that Meir is abusing the spread/commission scenario since, as Jack pointed out, at least for colmex only costumers their rates are similar or identical to Schwab.
Another question, how does Meir make money if I lose money exactly? Doesn’t he make money on colmex through the collection of spreads/trading commissions? And aren’t those commissions collected whether my trade was a winning trade or a losing trade?
Read my comment of November 19, 2018.
When you play with CFD, all you are doing is making a bet on the price of an instrument. Just as if you and your buddy made a bet on who would win a football match.
The difference is that when you do this bet with a broker, you pay your part of the bet into the pool. Supposedly, the broker also matches your bet in the pool. You have no way to verify that. If you win, hopefully, you get paid on your bet. If you lose, the broker keeps your money on the bet. Regardless of whether you win or lose, you pay the broker a commission on the action.
For the broker, that is better than being a mafia loan shark, because he does not even have to outlay any money to you directly, and no matter what he gets paid his vig.
In other words, as the broker is himself your counterparty on the CFD bet, if you lose, he wins.
Jacob,
Any money other than the money you deposited into your account doesn’t exist. Meir’s (the owner that doesnt admit it he owns them) TEFS/COLMEX CFD accounts are never hedged (market is never affected by CFD trades), therefore meaning Meir is betting against you in every trade you make (including his own trades lol)! If you win a trade wouldn’t he still be making money from commissions/(Bogus routing/ECN fees)? NOPE it would reduce his loss but he would still lose money since he’s betting that your trade would fail. I’ll put it to you this way, there are no professional day traders on Colmex or TEFS/Tradenet lol, why? because they’d bankrupt him and he would never allow that to happen. All you have is an army of lost newbie souls who guide each other to oblivion and still think Tradenet and Meir are legit even after losing their life savings lol, the perfect scam! Who am I to talk? I was one of those newbies that spent almost 3 years in that dumpster… and I have so much to sayyy I need pages n pages lol.
Great Link:
http://ptotrading.blogspot.com/2018/11/tradenet-gouged-me-with-58820-in-excess.html
OMG…routing fees? Routing where? They are a CFD broker, routing never happens with a CFD! What an amazing read.
This shit would never happen as a FINRA registered firm. Or at TradeZero or SureTrader. Why? Because they actually execute trades in live markets, and they don’t give shit whether the trader is profitable or not, they just execute the trades. Which is the way it should be.
I have a feeling that Trade Net/Colmex Pro days are numbered. Just a feeling.
Any update Emmet?? Looks like the noose is tighter around Mier”s neck.. tradenet No longer accepting US clients.
Hi BigLou,
I wish I could make a public comment on this case. It’s pretty obvious that something is brewing…but I don’t want to taint with my potential whistleblower claim.
-E
CySec does fall w/in the realms of the EU regulatory authority .. and this is where the qualm/s set(s) in; yeah, well, it can be argued if the U.S. even is the most reputable financial market seen GFC; but yes; it didn’t originate in the financial markets..it began w/ Carter’s Community Reinvestment Act in ’77 ..To this end, having to choose b/ween regulated or not, I’d rather go w//take regulated ..
Liechtenstein et al. still are safer..yes; 🙁 gone snif are the days in Swiss when could – 80s – just walk in w/ a briefcase full of cash and stash it away; these days ;D .. call the cops ..but the banks still do it just via a third party now w/ the intl eye watching ..
I’ve posted stuff on the Flash Crash prior ..CFTC was involved only because of the eminis; otherwise ..other than that ..However; the Commodity Exchange Act, which we discussed previously, Emmett, this is what i was mulling .. b/c the CFTC wouldn’t do anything here; https://www.whistleblower.gov/noticeshowever, the NFA there you can file https://www.nfa.futures.org/ComplaintNet/complaint.aspx
Shit, geez…if you got 50k just go open your own acct ..
That is absolutely true. Brokers make the most money then only come traders..and their business is buying and selling transactions. (I don’t get Elder ..stuff he says is true/mkt axioms..then, as you read b4 ..but maybe that’s why/parroting others, to guise his own in legitimacy.) here, otherwise they wouldn’t give a damn here you run into a mortal flaw; the broker is your enemy ..
lol binary options..but these can be legit too: they’re just akin to European options (excerise only at expiry) but the real, main reason i say that is because the Robbins WC even , which Larry (yes, same one that Williams did) won had them ..notwithstanding, they’ve removed them, so ..
I’m not sure if i’m reading into this part correctly; Admiral Markets, ok, they offer cdfs (stocks being the main culprit here) but seem legit .. however price markets I dug into myself for something else and they are the liquidity provider for a prop firm – BluFX.
#4 I’ve heard abt; FXCM which can’t do biz anymore in the U.S. (which, is freaking hilarious since that’s where they’re based) no dealing desk you can avoid it with .. #1 ..Here we come to smth more noteworthy; the bit abt quoting the bid-ask spread is like i said but you now are the broker and a banker is telling you ..
That’s legit..(forward aka the Interbank mkt) This, tho ..isn’t ..
could there be a bigger problem at hand here? Cfds are legit but not in the hands of certain enttities.. this article then RFEDs ..Like proprietary firms have been using them ..
Price Mkts ..bah cannot edit anymore ..
Great comment. I remember 10 or 15 years ago…Forex in the United States was high fashion. And then the shit started hitting the fan.
It seemed like every 3 months, a new round of CFTC enforcement and all manner of shady dealing was being exposed. Forex dealers would pop up like mushrooms on fresh cow patties, virtually overnight.
The CFTC enforcement ledger was on repeat: Forex A disappears with investor funds, Forex B disappears with investor funds, Forex C busted for manipulation, Forex D busted for selling automated trading systems with phony track records. On and on.
Why even mess with Forex and CFDs? Just trade on CME regulated markets and forget about the nonsense and worries. And if you have a tiny little account then trade options! Super high leverage with regulatory protections.
Heck, if have a tiny account just open a day trading margin account at just about any Futures shop. You can make $5k or lose your $500 in a matter of seconds. Why bother converting real money into monopoly money, where the table is slanted and the dealer is crooked, and the big payout probably isnt going to happen anyway.
Damn bucket shops.
Emmett, I made the following points on the other thread, however you seem to simply ignore them.
Cyprus is no longer an “island far, far away from any sort of reputable regulatory authority”. Cyprus is now part of the EU and has joined the Euro, which has meant a significant tightening of regulation and it now enjoys the same protections and rights as other EU countries. Your portrayal of Cyprus is simply years out of date.
The queries you make regarding Tradenet and Colmex are certainly valid and there does appear to be an outrageous conflict of interest. Also CFD companies in non or poorly regulated environments are certainly open to all sorts of abuses. However CFD providers in highly regulated environments like the EU do not fall in this category. Indeed I would guess that the majority of day traders in the UK and EU (markets that are just as highly and as well regulated as the USA) are using CFDs or spread betting (which is very similar to CFDs). Just because something is banned in the USA does not make it a scam or a fraud.
I have a CFD account with Colmex directly (I am from the UK) and have never had a relationship with Tradenet, other than a 2 week free trial in the chat room, with which I was not impressed, and I agree that that relationship and how it operates needs investigating, however your general points regarding Cyprus, Colmex (in terms of how it operates with its non Tradenet customers) and CFDs in general are wide of the mark.
Again I cant comment on Tradenet accounts, but for direct Colmex accounts the spread is always identical to the market spread. I also have a retail equity account with Schwab and I can see this every day in real time.
Emmett, you need to separate the potential conflict of interest with Meir, and how specifically Tradenet operates, with how regulated CFD companies in general and Colmex in relation to its non Tradenet customers operate
Also, in relation to leverage, I dont know what leverage Tradenet customers are effectively able to get due to their unusual “arrangement”, however in August 2018 the EU introduced new regulations which reduced the maximum leverage on equity CFD accounts to 4:1 for the vast majority of people. Colmex, as with all other regulated companies within the EU have had to comply with this.
Hi Jack, thanks for responding. I knew this article had the potential to spark a little nationalism. I have done my best to answer below…
“Cyprus is no longer an “island far, far away from any sort of reputable regulatory authority”. Cyprus is now part of the EU and has joined the Euro, which has meant a significant tightening of regulation and it now enjoys the same protections and rights as other EU countries. Your portrayal of Cyprus is simply years out of date.
True. Cyprus has done much more. However, in a future article, we are going to rate and rank the responses that we receive from various regulatory authorities, using varying complaint scenarios. I am doing this now, and the responses will make for an excellent and funny read.
Just because something is banned in the USA does not make it a scam or a fraud.
Well, from the perspective of US regulators, I am confident that many would suggest that readers view the overarching trend (market manipulation)that repeatedly keeps reappearing within the Forex space as proof.
I have a CFD account with Colmex directly (I am from the UK) and have never had a relationship with Tradenet, other than a 2 week free trial in the chat room, with which I was not impressed, and I agree that that relationship and how it operates needs investigating, however your general points regarding Cyprus, Colmex (in terms of how it operates with its non Tradenet customers) and CFDs in general are wide of the mark.
Yes, are probably correct. However, after I researched over 20 CFD white label providers, and they gave me exact details on how to manipulate retail accounts for the benefit of the bookmaker, how could anyone possibly trust this industry?
Again I cant comment on Tradenet accounts, but for direct Colmex accounts the spread is always identical to the market spread. I also have a retail equity account with Schwab and I can see this every day in real time.
Actually, I would respond to this with a question; Why risk with a CFD broker and all of the potential forms of conflict when you avoid all of this by simply opening a stock trading account at TradeZero or SureTrader? Heck with TradeZero, you get 6:1 leverage and zero commissions. And the guys that run with the company are registered with Finra. And they offer offshore and onshore.
I forgot to mention that I spoke with TradeZero about this article. They gave me the ‘inside scoop’ on many of the details included in the article, and the specific reasons why they refused to offer CFDs.
Hi Emmett
Thanks for your response, I guess there might just be some aspects of CFD trading that we will just have to disagree on.
In respect of TradeZero I’m not sure how a company regulated in the Bahamas is somehow offering greater protection than one regulated in the EU.
In respect of their “free” commissions, these are only on limit orders, which is fine when you are exiting in profit but will never apply to your stop losses, and hardly ever to the entries, unless your strategy is to always bid for the stock.
With regards leverage the EU introduced new regulations on equity CFDs in August limiting it to 4:1 for “retail clients” ie the vast majority of people. It is possible to get higher leverage than that if you are classed as a “professional trader”, which requires a financial qualification and/or being a regulated individual with one of the various EU regulators. Luckily I qualify and enjoy higher leverage than TradeZero could offer.
You are correct that there are many dodgy CFD brokers out there, mostly operating out of poorly regulated environments, especially in the forex market which is why I would only ever consider one that operates within a highly regulated environment like the EU and would never keep more capital than is protected by the regulator in the event of the company going bust.
CFDs are not perfect, they have some disadvantages to trading the actual stock, but they also have some advantages, and so long as you are careful with who you sign up with and ensure it is in a regulated environment then they certainly have a place and should not just be dismissed as dodgy or scams or frauds.
In saying all that I agree that the Tradenet “arrangement” does seem unusual to say the least and is open to abuse and conflict of interest and absolutely needs investigating, but it is simply not correct to lump in Colmex (for it’s non Tradenet customers) or CFDs in general with the criticism.
Hi Jack,
TradeZero is in beta and currently testing US-based accounts. So this is a pretty big deal, at least to me.
In my opinion, part of the problem with CFDs is the low barrier to entry. Virtually anyone can throw a CFD brokerage up in a few days. So the big question? For those that absolutely want to CFD trade, which broker is the “best.”
Currently, there are hundreds of review websites that all tout amazing reviews of CFD brokerages. And not very surprisingly, they all seem to push the CFD brokers that pay the largest upfront commissions and payouts. The web-based affiliate marketers have essentially muddied the water to such a degree that pinning down the truth is a near impossibility.
It seems to me that a subsection of this website should be dedicated to providing a master list of CFD brokers, and then providing a ‘shill’ free zone in which to post a review. Yes, there are other websites like Forex Army and Baby Pips that do a pretty good job, but even they link out to affiliate offers.
The ONLY way forward is to provide a rank and review system devoid of affiliate marketing, especially promotions by TradingSchools.Org. I guess if I am going to complain about conflicts of interest, then I should at least ‘eat my own cooking.’
A thankless task with zero profit potential? Yep, that sounds right up my alley. Time to start building that list.
Jack,
Are you highly profitable? I really don’t think so, you know why? because if you were, Colmex would force you to switch to an equity account, they have every legal right to do so and there’s nothing you can do about it. I’ve had 2 friends given ultimatums to switch or close their CFD accounts. Meir won’t subsidize your profits as his losses lol… trust me this guy is a professional scammer and he doesn’t daytrade for a living, he takes your losses and invests them in Manhattan real estate … he’s too smart to waste his time in a highly stressful job! Always remember your profits are his losses, btw I was with Colmex too.
Jason, am I “highly profitable”? I suppose that depends on your definition of “highly”. Think what you like, but I am a profitable trader and have day traded using both equity accounts and CFD accounts in the past, and indeed still use an equity account for my swing trading.
In relation to switching accounts from CFD to equity. You are right, Colmex do have a legal right to do that if they wish. Just like every company in every industry has a right to withdraw or change a service.
So what?
If that were to occur you simply re-evaluate whether the new service or changes that they have made mean that it still makes sense to continue trading with them, or if better terms could be obtained from a competitor. If that is the case then you simply move your account. It might be disappointing that the benefits you thought you were getting from Colmex that made you choose them in the first place are gone but is it really the end of the world. A little bit of perspective on the changing accounts from CFD to equity issue is required.
I couldn’t agree more with Jack.
Referring to Cyprus as a Banana Republic of sorts is biased, and borderline racist.
A country can be an island and still a legitimate place for business. Claiming otherwise is simply discriminatory.
Cypriot regulators have been under fire some ten years ago because many Forex and other dodgy players located there and took advantage of loopholes. But ever since, their local SEC – CySEC – has really confronted the matter. I’m sure today Cyprus is as good as the US when it comes to investment regulations, as Cyprus is now a member of the EU.
So what if CFD is illegal in the US? That’s meaningless, as it’s literally legal in every other country in the world. Mortgage Backed Securities (MBS) are legal in the US and took down the world economy in 2008, to the verge of total collapse. Those are legal almost only in the US. So is the US a harbour for criminals, Emmet?
You make a really compelling argument.
The comments regarding Cyprus are probably more rooted in ignorance and blind nationalism. That’s on me.
Regarding CFD’s…I still believe that brokers can easily manipulate, though this is just speculation.
There needs to be a rating system from CFD brokers. That is free from affiliate marketers, shills, and review stuffers. Am working on this now.
As a side note, I did speak with Meir regarding the article. He remains as gregarious as always. A real champ. I beat him up pretty good. But he definitely is willing to address issues, debate the merits, and bring transparency to the industry. Which is great for everyone.
Also, I never did speak about how much I actually enjoyed my time inside of his live trading room. Its actually pretty fun and the community is entertaining.
And, he is certainly not pumping out “BUY, SELL, BUY, SELL” signals all day long. Which only benefits Colmex Pro. In all fairness, it is only appropriate to write about the positives, which of course, I did not.
Hi Emmet,
After reading the compelling arguments provided by both Jack and yourself regarding the case of Colmex and Tradenet, would you happen to perhaps have suggestions/reviews on reliable stock brokers suited for day trading on a small account (<10k). Understand that TradeZero and SureTrader both fit this requirements, but are there any other stock brokers that you suggest I look up? Sincerely appreciate your help.
Warren
You said: “CFD’s have no financial backing whatsoever. They are just simulated financial instruments between two parties.”
Actually, they are *not* even “simulated financial instrument”. They are just a standard bet/wager between 2 parties on the future price of a real financial instrument. In addition, one party (the so-called broker) gets to charge the other party (the sucker, ahem, valued customer) a commission for playing. It may be even better takings for the broker than Guido on the corner takes for the Cosa Nostra.
You are right! But I do my best to describe and scribble. My wife says that my writing is basically a child attempting to communicate words using only a frozen yogurt machine.