Many dealing centres are eager to give an interview. Yet, after 2-3 tricky questions representatives of dealing centres tend to take offence and leave. It probably happens bacause there is a very fine line between advertising and adverse publicity when you ask questions which are interesting for traders, not dealing centres. I would like to introduce you to a person who firmly and honestly stood this "pressure".
In the opinion of Stock Leader Magazine, InstaForex broker is one of the most dynamically developing companies not only in the Russian Federation, but all over the world. Today we will try to sort out the intricacies of brokerage mysteries with representative of InstaForex international broker Dmitriy Savchenko.
Forex brokers are casinos, and MT4 is a new type of roulette?
J: The number of dealing centres comes in tens and constantly growing. It is not a secret that traders think about dealing centres as groups of businessmen who bought trading terminal MT4 ("lossless roulette") and collect money from traders with the only aim ― share it among them. Just collect ... and share it (97% of traders lose money themselves, 3% of traders lose it with the "help" of a dealing centre, those who take profit will not be allowed to withdraw it. There have already been five cases among listeners of the Academy whom dealing centres or brokerage companies have not paid). Is traders’ vision of dealing centres and Forex brokers correct or not?
InstaForex: This opinion is partly correct. Forex brokers are reflection of our life: you can see whatever, and it is important to distinguish one from the other. Indeed, there are dealing centres and brokerage companies in the Russian Federation and abroad which fall under the described scheme. Every Forex trader should pay attention to the subtleties which can really help him/her to distinguish between a reliable Forex broker and a "bucketshop".
J: How can the trader distinguish between a reliable broker and a "bucketshop"?
InstaForex: All criteria which you can find in the Internet (paid hosting, analytics, etc.) became obsolete long time ago ― everyone has websites, almost everyone provides analytics. Search for an answer for this question in two directions: who, when and why established a dealing centre; what investments were made. An advertisement promoting "a group of experienced traders" that gave up trading by unclear reasons and decided to make the world happy with their own brokerage company or a brand-new dealing centre with unprecedented trading conditions simply cannot be something serious. By the way, there are so many bricks that you never remember which one has not dropped yet.
J: Well, let us consider a concrete example. Assume that I am a trader who opened an account with you for 1000 USD. What will happen to my money, especially if I start making profit?
InstaForex: Nothing will happen to your money. It will be in your account and it will decrease or increase depending on the efficiency of your trading. InstaForex is a large international Forex broker with more than significant investments. We earn from spreads only. We entered this market to stay here not for a month or a year: we are going to stay here as long as possible. So it is inappropriate for us to apply some grey schemes or "play" with trust management. We have already formed a substantial customer base, so we successfully develop at the expense of the only and absolutely transparent source of income – spread. So, one more time I would like to call for all present and potential clients to separate the wheat from the tares.
J: Who and for what reason established InstaForex brokerage company? I have been watching you for a long time. At first, good prizes in the contests among demo accounts, then outstanding campaign Hummer H3 to a Jammy Fellow. Do expenses pay off under the conditions of the world economic crisis?
InstaForex: You pointed out the essence of our company and its principal difference from other brokerage companies ― we are commited to working for the future. InstaForex Group is a group of investment companies from all over the world, which finely understand that unlike currency speculations investments are LONG-term projects. Why did we enter the market of brokerage services and start occupying it? Because we saw who and why establishes brokerage companies and what service they provide. It looks terrible from the inside. Our way is unique — we were the first to start investing in traders who need to be brought up... Most dealing centres (as distinct from investors) do not care about it.
J: We have noticed this by InstaForex relation to Masterforex-V Academy. While some companies prohibit any mentioning of MF, your staff even send traders to us for education.
InstaForex: Relation to your Academy is also an evaluating criterion for Forex broker — it reveals which brokers need experienced traders and which do not. We do not only recommend Masterforex-V most talented traders: in the near time we will make the next step within our strategy of trader and investor interests’ combination. We have been negotiating with MF regarding organization of a large-scale contest among the Academy members that would last for 1 – 2 months and result in big prizes.
For example, the first prize-taker in the demo contest among the MF Academy audience will get 3000 USD in cash and 30 thousands USD as initial deposit to trust management account. If trading is profitable, an investor account will not be limited by volume. There are no investment problems in the world even under the conditions of the global financial crisis, but there are other headwinds related to traders and investors. We are planning to hold such contests (with checking stop-out and other criteria by our investment department) on a regular basis.
J: Describe the main steps of your company’s development. What has already been done, and what do you still have to do?
InstaForex: Our first step as respectable company — creating the world's biggest network of branches providing services from micro-accounts to the highest investors’ deposits — is already made. Our offices have been opened in 30 countries of the world and their number will be increasing. Moreover, an important constituent of the company’s growth is providing micro-real accounts services. 1 InstaForex lot can be diminished to 10000 units of the account, which, in its turn, allows a client to have several accounts in one at once. In addition, a trader can easily trade using different volumes starting from 0.01 lot. Therein lies an advantage and the reason for popularity of micro-accounts. Our company has been working with micro-accounts for a long period, and it can safely be said that the company’s micro-real accounts are much sought after, and it makes us one of the leaders in this area.
The second InstaForex step is our own investment in successful traders. Serious investors require experienced traders, who need to be brought up, selected and combined with investors, then to sign a contract with severe conditions and control finance. It is not necessary to convince investors of putting up money like government officials do, unaware of the investors’ logic. You should better demonstrate them benefit by an example of profit making traders results. In our turn, we guarantee high quality service for the investor to be able to choose a trustful manager within the system of PAMM accounts.
The third InstaForex step is going to be even more surprising. The only way to take and keep the leading position in the brokerage service niche is to offer services that no one could or did not want to provide before you.
J: Thank you. It is a pleasure to see the brokerage company of a new type trying to combine the interests of traders and investors, as well as to write in short time that InstaForex Company is an unquestionable world leader of micro-accounts. What would you like to wish beginning traders?
InstaForex: Thank you. Above all, "learn, learn and learn again". Funds to invest are plenty, but there is a lack of experienced traders making stable profit.
Stock Leader Magazine, October 2009