FX Pulp: Is this for real?

[trendie]

T2W advert; FX Pulp.
Zero Account

Zero spreads, zero comms, zero margin!!

how does this work then?

Where do they make their money?
(They cant be hedging in the real market, as it would cost them comms.)

Also, I dont understand their margin reqs:

Leverage 1:100; margin reqd: $1000. 1:500, margin reqd: $200.

I would have thought that the more the leverage, the greater the risk you're taking, and you would therefore require to deposit more money.
I mean, if you take this to a logical extension, if you had a leverage of 1:50, would they require $2,000? And if you took 1:1 leverage, they would want MORE for taking LESS risk?

I am bemused by this.

They are based in Cyprus. (not suggesting this is a reason to question their integrity)

maybe its just Monday, and my brain hasnt kicked in yet.

 

[KillPhil08]

You can't take profits until 35 pips i think and min stops are like double that poss. I think hotch showed them a while back.

 

[MrGecko]

The greater the leverage, the more the notional value of your position per unit margin:

1:100 - > $1,000:$100,000 [$1k deposit for a notional trade size of $100,000]

1:50 -> $2,000:$100,000 [$2k deposit for a notional trade size of $100,000]

the more leveraged you are, the more notional currency you can control with your margin - think of a zero leveraged account;

1:1 -> $100,000 then represents $100,000.

You're right, the greater the leverage, the more risk you are taking on pre unit margin.

 

[Hotch]

You can't take profits until 35 pips i think and min stops are like double that poss. I think hotch showed them a while back.

Yeah, it just seemed really bad, not a surprise really.

 

[MrGecko]

You can't take profits until 35 pips i think and min stops are like double that poss. I think hotch showed them a while back.

It would be interesting to see the research / data behind this decision - obviously they have offered the account in expectation of it making money; it would be cool to see the rationale... they must have some excellent data that models the behaviour of retail FX traders

 

[trendie]

aaahhhhh! the penny has dropped.

its effectively a 35-pip spread!
the market needs to go 35 pips in your favour before you can close any trade, profitably.
this is just a variation of having a spread, and being 35 pips down, and having to climb out of that hole.

ingenious way of hiding the spread.

 

[Joey25]

I thought it might be something to do with the maximum exposure of 100 pips.

Are they effectively buying a cap for 2 pips?

 

[Crap Buddist]

They also cap your maximum profit, but surprise surprise ,are happy to let you have unlimited losses !

Eventually I think companies will all offer 100% +, spread rebates for good stable traders/ accounts . But this company with the idea of capping a gain to 100 pips seems a tad unsporting .

 

[sark_anZas]

You don't make any of the profit over 100 pips.

If the trade is under 35 pips at the end of the day (21:00) or if the trade goes above 100 pips then it effectively becomes "their trade." They take the profit if it never goes above 35pips, and they also take the excess of what goes over 100pips.

that's how they make money.


They are also asking for bank account information up front on the application, is this normal for Forex? I've got a stock account with E-trade, Schwab, Zecco, Scottrade, and Sogo-- none of them asked me for my bank info. They told me it was a Cyprus Regulation... I tried searching for it to no avail... Anyone know the details on this?

 

[Dr_Jones]

The fact that they can alter spreads in this manner suggests you wouldn't trust them as an open market broker.
Also some of the language on their website reminds me of Nigerian emails.

I know they are saying the account requires no money to set up, but I have a feeling you'll need to end up funding a parallel account trading minis or something like that).

You have to have a standard account funded with them before you can use this.
As you see it says on the page if amounts go over $5000 the rest will be transferred to your standard account.
They couldn't do that if you didn't have one right?

Also RCG DORMAN MAN (futures)they all ask for bank info on the applications.
Stock trading accounts are actual interest bearing bank accounts so they don't want bank info as it is a bank.
People used to use Etrade as an offshore bank account facility and not even trade stocks in it, but they stopped that now I think.

 

[miko432]

Please also note that they allow you to loose more than your initial investment... They actually say that themselves... Ugly promotion.
Michael

 

[daniel17]

fx pulp is SCAM i open an ac with them deposite 300
usd as soon as i deposited money then my ac was disabled but the demo is not disabled and they immediately stoped conversations with me i would advide anybody not to attemp to open an ac with them it is a proper scam

 

[ihss]

I scamed by fx pulp !!!!!

The appearance of fxpulp goes to the end of the year 2008 and promoting itself as a company licensed in Cyprus, but the truth is hidden from the clients.
When Ibrahim Hassanein realized that crown forex is finished, he decided to start again in a new place. So, he established FXpulp in Cyprus and started to promote for it through crown forex clients, but due to the bad reputation of crown forex he decided to hide any connection between him and fxpulp and not to show himself or any of the staff who work with fxpulp because they are the same staff who were working in crown forex, even Saed Al-Qadomi CEO of FXpulp (CEO of crown forex in Jordan) changed his name to ( reed full story here )
http://www.fxextract.com/forum/forum_posts.asp?TID=17

 

[arabianights]

good golly