Is Fintech Changing The Forex Landscape - Analytics Insight

Is Fintech Changing The Forex Landscape - Analytics Insight
CapitalOneMarket – Are They a Scam? - ChainBits
What are the Differences Between Forex Demos and Real Accounts? - DailyForex.com

Posted: 23 May 2021 10:42 AM PDT

Fintech: A brief history

Fintech, short for financial technology, is often described as the enmeshment of financial services and information technology, concepts most people would deem as relativity recent. Nothing could be further from the truth. The evolution of Fintech can actually be traced back to over a hundred years ago and be subdivided into various eras or periods.

There's the period that ran from 1886 to 1967, detailing an era of infrastructure, including the introduction of the telegraph, railroads, and steamships – all of which facilitated the speedier movement of information over borders. It all culminated in the 1950s with the introduction of the first credit cards – items that enabled consumers to carry less cash.

What followed was the period from 1967 to 2008, an expansive era which saw a transition from analogue to digital. Highlights of this period include and are not limited to the first handheld calculator, the first ATM, the establishment in the 1970s of NASDAQ, the world's first electronic stock market and forebearer to the modern trading guide to USD / CAD market as offered through online trading brokers. The 80s brought about bank mainframe computers and the 90s introduced online banking and thus the birth of e-commerce. In the end, the way people viewed money and their relationships with banks had changed and 2008 signalled the end of this period.

Finally, we come to the current era of Fintech which entails the aftermath of the 2008 recession – the result of which has been the emergence of new markets, the founding of Bitcoin and subsequent cryptocurrencies, and the global proliferation of smartphones – which have in turn changed consumer behaviour forever. Today Fintech usage is most prominent in China (69%) and India (52%) – due to the fact that both countries didn't have access to developed levels of Western physical banking infrastructure and thus sought new solutions.

Fintech & Forex trading

Fintech has become integral to forex and in so many ways. Most newcomers to the world of forex trading will not notice this, but those who have been in the game for much longer are sure to account for the changes they have witnessed over time. For one, were it not for the evolution of Fintech, forex trading would still be in the hands of an exclusive group of people -namely tycoons, yuppies, investment bankers and brokers. Today anyone with money, a smartphone and the will to learn can partake in the complex, interesting and lucrative markets of forex trading. Fintech has equipped today's trader with secure rapid payments, improved analytics for accurate market charts and trade predictions, and ultimately a platform for safer markets. Automation technology is also becoming part of forex trading, the result of which has been robot-driven algorithms that offer traders higher volumes of trades with much less risk involved.

Fintech also offers associated attributes like machine learning and risk prediction software which in turn assists traders with programs that make near future predictions such as a market crash. The amalgamation of Fintech and forex is such that the relationship can be likened to what scientists call mutual symbiosis. Demo accounts, a key feature for those looking to learn before attempting to earn, are also the by-product of Fintech as these accounts emulate the actual machinations of the forex market thus allowing all interested parties to gain a foothold in the field of familiarity.

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CapitalOneMarket – Are They a Scam? - ChainBits

Posted: 30 May 2021 10:19 AM PDT

Website URL: https://capitalonemarket.com

Founded:2020

Regulations:Unlicensed

Languages:English

Deposit Methods: Wire Transfer, Debit Card, Credit Card, AliPay, OkPay

Minimum Deposit:$250

Free Demo Account:Not Available

Number of Assets:Unknown

Types of Assets: Forex, Crypto Coins, CFDs (Shares, Government Bonds, Stock Indices, Commodities, Precious Metals)

Trading Accounts and Conditions

CapitalOneMarket offers you the following types of trading accounts:

Mini Account:The deposit amount is from $250 to $5,000. The broker charges a 1.5% commission on all trades, leverage is up to 1:100.
Standard Account:The deposit amount is from $5,000 to $25,000. The leverage is up to 1:200.
Bronze Account: The deposit amount is from $25,000 to $50,000. The leverage is up to 1:350.
Silver Account: The deposit amount is from $50,000 to $100,000. The leverage is up to 1:500.
Gold Account: The deposit amount is from $100,000 to $250,000. The leverage is up to 1:750.
Platinum Account: The deposit range is from $250,000 to $500,000. The leverage is up to 1:1000.
Black Account: The deposit range starts from $500,000. Leverage is up to 1:1000.
VIP Account: You can open this type of account by invitation only. The leverage is up to 1:1000.

The EURUSD pair's spread is at 2 pips on this broker's platform, however, we cannot say for certain that this is a true spread since CapitalOneMarket's platform is fraudulent.

CapitalOneMarket – Advantages

We could find any advantages that we could list when we reviewed this broker.

CapitalOneMarket – Disadvantages

Here we have listed all the disadvantages we found with CapitalOneMarket:

Unregulated Broker

CapitalOneMarket states on its website that it is owned and operated by Capital One Market Limited, a company that it claims is based in London, England. The broker also claims that it is regulated by the CySEC (Cyprus Securities and Exchange Commission) and by the European Union.

Now, there are multiple things wrong with these claims. First, if a broker is located in London, then it needs to be regulated by the UK's Financial Conduct Authority – otherwise it cannot operate out of that country. We checked the FCA's online register; there is no company by the that name listed there.

Second, we checked the online register of the CySEC, and came up blank too. There is no company or brokerage by the name of Capital One Market listed on that authority's register either. So, that's another lie.

We also checked a couple of the online registers of EU member nations – the Italian CONSOB, the Spanish CNMV – but once again, we came up with nothing.

All of this simply proves that this broker has lied about its regulatory status, which is the first sign of a scam.

$100

Minimum Deposit

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

$100

Minimum Deposit

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.

False Claims About Its Customer Base

Another lie that this broker has told is that it has a customer base of more than 14 million traders. The broker goes on to state that for more than half of these 14 million traders, CapitalOneMarket is their primary income source! These claims are simply lies meant to attract unwary novice traders into their trap.

No trader can claim that a single brokerage gives them their income. This is because of the very nature of the forex market – it is speculative, risk-ridden and people are more prone to losing money than making money on the market. In fact, more than 80% of traders end up with losses rather than gains when they trade in this market. And this is something that regulated brokers are law-bound to publicize on their websites.

Issues with Withdrawals

Another massive red flag that tells us that this broker is a scammer is the time-frame around withdrawals – and the fine print of the withdrawal policy in the broker's legal documents.

For the Basic account, it can take up to 14 business days before your withdrawal request will be processed. The Standard account takes 7 business days, the Bronze account takes 5 business days, the Silver and Gold accounts take up to 3 business days. Firstly, these timelines are ridiculously long compared to the instant withdrawals that numerous regulated brokers offer.

In the withdrawal policy, then the broker states that it actually will notcommit to a timeline to process your request. What this means is that they can sit on your money indefinitely and there is nothing you can do about it – because it there in their terms and conditions!

Added to that, if you accept their bonus, then you will need to trade a volume that is 30 times your deposit and bonus amount before your withdrawal request will be accepted. Basically, you will never get to see your money again!

Extremely High Leverage

The maximum leverage that you can get from this broker is 1:1000, which is ridiculously high and risky in the extreme. Such leverage can render traders bankrupt, which is why authorities have imposed limits on how much leverage can be used. Thus, in the UK, EU and Australia, leverage ratios cannot be more than 1:30. Canada and the US allow slightly higher leverage ratios at 1:50.

Thus, this 1:1000 ratio is illegal – something only a scam would offer.

Lies About Trading Platform

CapitalOneMarket claims that it offers its clients the MT4 andMT5 trading platforms. These are the top two trading platforms in the world today, and they offer a range of features that make trading so much easier.

If this broker actually did offer these two platforms, it would have been a huge advantage. The reality is that what traders actually get here is a basic web-based trading platform that doesn't really do anything.

Conclusion

Even though this broker has put in some effort to present traders with a really nice-looking website, at the end of the day, CapitalOneMarket is a scammer. Everything about this broker's website is designed to fool people into investing their money with them. We strongly advise all traders to keep away from this broker.

CapitalOneMarket

User Experience

2.2/10

Payment Options

2.5/10

Security

2.0/10

Support

2.0/10

Reputation

2.2/10

Cons

Unregulated Broker
False Claims About Its Customer Base
Issues with Withdrawals
Extremely High Leverage
Lies About Trading Platform

What are the Differences Between Forex Demos and Real Accounts? - DailyForex.com

Posted: 04 Nov 2020 12:00 AM PST

Demo accounts are developed as training platforms where users can test themselves, identify their skills, weakness, and try new strategies. Are demo trading accounts "real"? Yes, and no: prices are accurate, with live market quotes - but delayed. Executions are easier and faster, but traders usually perform better than in real trading accounts as there is no real risk involved, with all the associated psychological implications.

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It is essential to understand the difference between Forex demo and real accounts so you can understand exactly what you are gaining, and what you are still missing, when you start to practice trading in a demo account.

You do not want to be surprised at what you find when you make the switch from a Forex demo account to a live real money account. Brokers usually work with two separate data feeds, one for the demo account and the other for the real account.

The major differences between Forex demo and real accounts are:

Your Demo Orders are Always Executed

You do not have liquidity problems, and Forex brokers rarely requote prices, in demo accounts. However, live trading answers to real counterparties and if you want to sell a position, there must be a buyer. Sometimes, liquidity is tight, and brokers are forced to requote prices.

Execution Speed

As demo accounts just mirrors of what is going on in the real trading world, traders do not have to deal with counterparts or broker liquidity or volume differentials. In that way, orders made in demo accounts are usually executed almost instantly. You click it, and you get it.

However, when it comes to real trading accounts, retail traders are competing with thousands of other traders who want to make money. In that framework, execution can be slow depending upon market conditions and your Forex broker's operations.

Slippage

Demo accounts respect your orders; you enter and exit at the exact price you see when you click the button, because why not? The broker has nothing to lose. However, in real money live accounts, slippage can happen. Sometimes you can get a different entry or exit price than the one you actually see when entering a market order or from a stop or limit order you have already input at a specific price. This can happen because brokers have to deal with liquidity and third parties to fill your trade order.

Stop Loss Orders

Real accounts can experience problems executing stop loss orders as sometimes prices available will not match the prices traders want in fast-moving markets. That does not happen in demo accounts as it is a controlled environment.

Prices are Different

Most brokers offer real-time prices in live accounts, but when it comes to demo accounts, prices can be delayed by a few minutes. Even though a different price feed is used, the demo feed is still based on the live feed but is sometimes delayed in its reflection of prevailing market prices. Although major banks have their own Forex price feeds, with no central price feed, they typically cannot deviate by too much, or would be arbitraged away.

Differential Spreads

Demo accounts usually offer smaller and lower spreads that do not vary at all. Most brokers use standard spreads in demos so as not to be too misleading with their marketing. However, the same broker might use variable spreads in real money live accounts which widen at moments of high volatility or decrease in extremely liquid markets, while spreads in demo accounts tend to stay the same regardless of real market conditions.

Spreads in live accounts are created through the interaction of different variables such as volume, volatility, time of trading, between buyers and sellers. It fluctuates every moment. In demos, this does not happen as quoted prices are simply replicated, not generated by any real dynamic or interactive processes.

Even when both platforms work with the same spread conventions, sometimes demo accounts fail to replicate real accounts' spread structures. Remember that demo and real accounts tend to have separate data feeds at most Forex brokers.

Hidden Fees

Demo accounts do not have the same price structure that the brokers have in their real accounts. These include deposit, withdrawal, overnight fees, rollover, margin fees, etc. so the overall fee experience is different.

For example, if you fund your portfolio with $10,000, your broker or even your bank may deduct a deposit fee. So, you would start trading with less money than what you actually deposit, perhaps $9,900. In addition, brokers charge rollover / overnight fees, which means you will have to pay to hold your position for more than one day. This is often not applied realistically in demo accounts. For example, rollover fees are typically skewed against the trader, but demo accounts often charge rollover fees which do not reflect honestly on the real rollover fees being charged by that same broker that day in their demo accounts. Of course, rollover fees can fluctuate from day to day.

Another important topic to keep in mind is that all profits in your demo accounts are gross. You will not have to deal with withdrawal costs or currency exchanges from the money you deposit into your account and the base currency you will use in your real account – not to mention taxation.

Psychology

There is a huge difference between trading successfully in a demo account and a real live money account. Even if the prices are basically the same, and you should be able to trade profitably just the same in one as in the other, psychological factors make the two experiences feel completely different for the vast majority of human beings. The difference is perhaps best illustrated by the old trading joke about a trader who boasts he can hit a wine glass with a gun from one hundred yards away. Another trader replies, yes, but can you do it while the wine glass is aiming a bullet at your heart? In trading terms, the bullet at your heart is represented by the prospect of losing real money – a real prospect in live accounts, but something that cannot happen in a demo account.

Bottom Line

It is definitely a good idea to start your trading career by opening a Forex demo account. If you take it seriously, you will begin the process of learning how to trade, and you will benefit from it. It is not hard to find reputable Forex brokers offering free demo accounts. However, it is important that you understand that there are skills you will not develop until you trade a real, live account, with your own money at risk – because of the differences between Forex demo and real accounts. You can compare starting Forex with a demo account to learning to ride a bicycle with training wheels. You need the training wheels when you start, but you still have a little to learn even after you take the training wheels off.

FAQs

Are Forex demo accounts accurate?

Yes, Forex demo accounts are accurate, but they come with small differences regarding live platforms. Prices are real, but usually delayed by a few minutes, and price executions can vary from live trading.

What is the difference between a demo and live trading account?

Significant differences between Forex demos and real accounts are executions such as price requotes, slippage, and order activations presented in live versions but not in demos. Also, chart details like quotes delays, spreads, and fees are different.

Is MetaTrader 4 demo real?

MetaTrader 4 demo accounts are real, but they can have delays in prices. Also, spreads and fees work differently in MT4 demos than real platforms.

How does a Forex demo account work?

Also known as paper trading, Forex demo accounts are provided by brokers who want to offer educational tools to customers and gain new clients. They use different data fees to provide no risk-associated trading where customers can try platform features, understand market behavior, and test new strategies.