Is 24 Capital Markets legit A question that many FX traders ask

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24 Capital Markets reviews: What the traders have to say

When it comes to picking the right Forex broker, you need to browse the broker’s website and read some objectively written reviews. 24CM Forex broker is the broker we take a look at today. The firm opened its doors in mid-2020. It is owned and operated by F1Markets Limited which is based in Cyprus. F1Markets Ltd is located along Kolonakiou Avenue 43, 4103 Agios Athanasios Limassol. In our 24CM Forex broker review, we take a look at some key features of this broker.

24 Capital Markets Review

The license and regulation details of 24CM broker

As noted earlier, F1Markets owns and operates 24CM. F1Markets is an investment firm and is licensed by Cyprus Securities and Exchange Commission (CySEC). The license number of the firm is 267/15. Upon perusing further, you will find out that there is another firm by the name IOS Investment Limited which uses the 24CM brand. According to 24CM, IOS Investment operates the Forex trading business for clients based outside the European Economic Area. IOS is licensed by International Financial Services of Belize. But as you may be aware, Belize is not the most ideal regulator when it comes to financial matters. In fact, Belize is known for being a host of many shell corporations which are used to evade tax and swindle people money among other things.

Trading at 24CM Forex broker

This 24CM scam review reveals how the firm has invested in a trading platform which is easy to understand and use. The platform is developed by Scipio. In addition to own web-based trading platform, 24CM uses MT4 platform which is popular amongst FX traders for its charting and analysis features. If you own an Android or an iOS mobile device, you will not have a hard time as the firm has invested in a Mobile App compatible with both operating systems.

The underlying assets that you can trade at 24CM are over 270. You can opt to trade in gold, currencies, wheat, Silver and so on. The broker also offers CFD trading as well as cryptocurrency trading which has become very popular in the recent months. Due to the MiFID II rules, the maximum leverage you can enjoy when trading popular currency pairs is 30:1. The leverage for cryptos is 2:1. These rules have been introduced to reduce the risk on newbie traders losing their money. It is worth noting that these rules are only applicable in EEA and IOS which is licensed in Belize is not obliged to follow them.

The accounts you get at 24CM

There are basically four different types of accounts at 24CM. There is Basic, Silver, Gold and Platinum account. All accounts come with a ‘dedicated account manager’, daily market brief and a demo account loaded with 100k virtual money. The one thing that is obvious when you visit the accounts page is the lack of any information on the initial deposit requirement. However, there are 24CM Forex broker reviews which say the minimum deposit if $250. This is a bit high considering there are brokers of good stature that require a deposit of only $50.

Is 24CM Forex broker legit?

In our 24CM scam review, we have looked at some of the features which are critical to consider when a trader is shopping for an FX broker. With 24CM, there are questions surrounding the licensing and the regulation of the firm. In addition to that, even though a trader in Europe and another in Asia may be accessing the 24CM website, the firms handling their trades are different.

There is also the issue of displaying the different accounts and not giving all the information regarding them. A trader will not automatically know how much s/he will need as the initial deposit because the firm has not displayed this information on its official website. This makes 24CM Forex broker look scammy in the eyes of some traders.

If you want to read our outdated research about 24 Capital Markets scam – you can find it below.

24 Capital Markets is one of the well-known FX brokers to have shifted from the binary options sector. The brokerage firm is registered and licensed by CySec of Cyprus. The brokerage firm has a global presence and it uses at least four different languages to reach its customers. The company is one of the oldest online FX firms. Among the key features that make 24CM stand out include an initial deposit of $250, having a withdrawal period of three days and having six different types of accounts. In this 24 Capital Markets review, we will look at the complaints leveled against the broker by traders from different parts of the world and over the years.

The complaints against 24 Capital Markets

24 Capital Markets has a pool of account managers who are supposed to help traders make the best trading decisions. Our 24 CM review reveals that these account managers are overly aggressive and have been accused by many traders of giving misleading trading tips. The managers constantly and persistently call customers urging them to deposit more money into their trading accounts. Some customers claim that their account managers at 24CM give misleading advice so that they can make loses and the managers are left to make profits through commissions. Many of the 24 Capital Markets reviews claim that the account managers at the firm give misleading advice on purpose especially when the firm was concentrating on binary options.

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Is 24 Capital Markets legit?

One online trader says that he had an account with 24CM and while talking to his account manager, he brought up the issue of difficulty withdrawing funds through skrill. The manager suddenly suggested that when the trader gets to withdraw their money, they should also close their account. The manager went on and told the trader that he would no longer serve him because while the trader withdrew his cash, the manager would no longer make any money.

When signing up with the 24CM, you will be guided by robots which are quite good and accurate. But once you have deposited cash into your account, the robots disappear and you are allocated an account manager. The account managers are quite aggressive especially for a novice trader who needs to take things slowly. It is in the melee that beginner traders find themselves making huge losses on their accounts. The other common complaint which makes many wonder of 24 Capital Markets scam possibility is the comparatively low returns that the broker offers. Sometimes the account managers even tell traders that for them to get access to a demo account they will need to deposit funds in their accounts first.

Should you consider 24 Capital Markets broker?

There are many complaints about 24 Capital Markets but there are also a good number of positive reviews. A trader should do their own research and establish whether they want to go with the broker or not. One of the things that stands out though about 24 Capital Markets broker is that while the minimum deposit is set as $250, the minimum investment per trade should be $24. This then means that if you were to make a few losses (which is often the case), you are likely to lose your entire investment in a matter of a few trades.

It might a bit harsh to brand 24 CM scam since it is registered and licensed by CySec and other well-established regulatory bodies. However, the unethical behavior towards customers makes the otherwise good name be scarred. The best advice to consider taking when you consider trading using the 24 CM platform is to just not listen to the signals they give you.

Why do Forex brokers not accept US clients?

It is a common known fact that the Forex market trading goes on 24 hours a day, 5 days a week. This happens due to the fact that there are multiple centers all over the world where the currencies are traded. Yet, even though the New York session tends to have the most significant impact on currency rate fluctuations, the amount of US based retail traders tends to be quite small.

If you are from the US you can be quite puzzled by the amount of brokers that are offering the services throughout the world, but are still not present in the States. Even though the US is the major market for various goods and services, for some reason FX trading for individual investors is not so common.

US residents can trade Forex

Before we move on any further, it is vital to state that Forex trading in the US is not prohibited. A trader from the US can trade FX online as easily as a person living in Europe or Australia. However, the main difference lays in the variety of brokers a trader can choose from.

There are a few reasons why the amount of FX brokers is very low, let’s examine each of them below.

Licenses and Regulations

When it comes to the brokers that operate in Europe, the regulatory environment is rather simple. Once a broker has obtained a license from one of the European regulators, it can easily accept traders from all EU countries. In other words, a UK Financial Conduct Authority regulated broker can accept traders from Germany, the Netherlands, Bulgaria and other EU member states.

However, when it comes to the US, European licenses simply do not work. A broker that wants to have traders onboard from the US has to be regulated by the NFA, National Futures Association. At this point you may ask, there are brokers that have multiple licenses, like CySEC, FCA, ASIC and more, why would they not get another one to provide services in the US? The reason for this is quite simple – capital requirements. While a broker has to have around $100,000 – $500,000 of locked capital to obtain one of the European licenses, NFA requires quite an enormous amount of capital to be able to operate in the US – 20 million dollars.

This amount of money only corresponds to a deposit that a broker has to make and does not include any legal fees associated with obtaining the licenses, employment of lawyers to be placed on the register and executives. In other words, the US market is an expensive market to operate on.

Even though some brokers make profit enough to afford it, 20 million dollars is quite a large sum to allocate just for a license. On average, the world’s 15th largest broker would hardly earn 10 million USD in profit annually, hence allocating a profit of 2 years for the privilege to work in one country is an extremely serious investment.

The situation with capital requirements was quite different back in 2008 and at that time there were quite a few brokers that accepted US clients. However, today the amount of US friendly brokers is just less than five.

Profitability

Now you may wonder, if there are only a few brokers in the US, why are more brokers not trying to penetrate the market? There are over 300 million people living in the US and it is quite hard to believe that there are no more brokers that could actually afford the NFA licensing. Well, the truth is that, although more brokers could deposit 20 million to operate, not every broker will find it profitable.

As you know, FX brokers earn from the volume traded, hence the higher the trader’s volume is, the more profit a broker makes. However, unlike European countries where a trader has access to the leverage of 500:1, in the US it is only possible to supply 50:1 leverage on majors and 20:1 leverage on minors. This means that a broker can expect to receive some 10 times smaller profit in the US than in Europe, provided that it has the same amount of traders with the same amount of deposits in the two regions.

Furthermore, yet needless to say, wages in the US tend to be quite high, so the whole process of financing the US-based operations is not cheap at all.

Regulator’s attitude

Even though it is already quite hard for some brokers to start operating legally in the US and then to become profitable, historically US authorities have also been seen as a hindrance.

Quite a few brokers have been heavily fined by the NFA for malpractice. While the impact of the reasons behind the fines could be quite insignificant, the fines tend to be heavy: ranging from $200,000 to $2 million.

In other words, a broker may spend a year working hard, and by the end of the year its profits (or even more) can be simply taken by the regulator as a result of certain misconduct.

Indirect competition

US traders have also been much more inclined to stock trading, this is why they often choose to acquire shares over currencies. In most cases, trading stocks is actually more expensive for traders (or more profitable for brokers) than Forex. This is why US based brokers not only have to compete against each other, but also in order to take a slice of the stock brokers’ pie by increasing the awareness about online currency trading.

Conclusion

The limited amount of FX brokers in the US is certainly caused by the heavily regulated environment that requires brokers to deposit a substantial amount of funds and, at the same time, decreases brokers’ profitability by limiting leverage.

This also results in a few unregulated brokers offering their services in the US as they can better meet the needs of the traders, while their legal and operational costs are minimal. However, unregulated brokers that accept US traders should never be your choice.

How Much Trading Capital Do Forex Traders Need?

Accessibility in the forms of leverage accounts, global brokers within your reach, and the proliferation of trading systems are all promoting forex trading for a wider audience. However, it is important to keep in mind that the amount of capital traders have at their disposal will greatly affect their ability to make a living. In fact, the role of capital in trading is so important that even a slight edge can provide great returns, assuming that a more money means exploiting a position for larger monetary gains. A trader’s ability to put more capital to work and replicate advantageous trades when conditions are right separates professional traders from novices.

So just how much capital is required to be a successful forex trader? Take a closer look at performance, fees, and leverage to gain a greater perspective on your trading goals.

What Is Respectable Performance for Forex Traders?

Every trader dreams of becoming a millionaire by making intelligent bets off of a small amount of capital. The reality of forex trading is that it is unlikely to make millions in a short timeframe from trading a small account. While profits can accumulate and compound over time, traders with small accounts often feel pressured to use large amounts of leverage or take on excessive risk in order to build up their accounts quickly. To put it into perspective, professional fund managers with millions of dollars at their disposal often make less than 10% to 15% per year, which means that the idea traders with small accounts could make double, triple or even 10 times their money in a single year is fairly misguided.

The reality is that when factoring fees, commissions and/or spreads into return expectations, a trader must exhibit skill just to break even. Take for example an S&P E-mini contract. Let’s assume fees of $5 per round trip trading one contract and that a trader makes 10 round trip trades per day. In a month with 21 trading days, $1,050 will be spent on commissions alone, not to mention other fees such as internet, entitlements, charting or any other expenses a trader may incur in the course of trading. If the trader started with a $50,000 account based on this example, they would have lost 2% of that balance in commissions alone.

If we assume that at least half of the trades crossed the bid or offer and/or factoring slippage, 105 of the transactions will put the trader offside $12.50 immediately. That is an additional $1,312.50 cost for entering trades. By that calculation, our trader is now down $2,362.50 (close to 5% of their initial balance). This amount will have to be recouped through the profits on the investment before the trader can even start making money.

A Realistic Look at Forex Trading Fees

As we discussed in the above example, being profitable is an admirable outcome when fees are taken into account. However, if an edge can be found, those fees can be covered and a profit will be realized. Let’s assume that a trader can establish a one-tick edge, meaning that on average they make only a one-tick profit per round trip. Under those conditions, that trader will make:

210 trades x $12.50 = $2,625

Now we’ll subtract the $5 commissions the trader comes out ahead by:

$2625 – $1050 = $1,575, or a 3% return on the account per month

This calculation shows that while the trader has winning and losing trades, when the trades are averaged out, the resulting profit is one tick or higher. A trader that averages one tick per trade erases fees, covers slippage and produces a profit that would beat most benchmarks.

Are You Undercapitalized for Making a Living in Forex Trading?

The high failure rate of making one tick on average shows that trading is quite difficult. Otherwise, a trader could simply increase their bets to five lots per trade and make 15% per month on a $50,000 account. Unfortunately, a small account is significantly impacted by the commissions and potential costs mentioned in the section above. In contrast, a larger account is not as significantly affected and has the advantage of taking larger positions to magnify the benefits of day trading. A small account by definition cannot make such big trades, and even taking on a larger position than the account can withstand is a risky proposition due to margin calls.

If the goal of day traders is to make a living off their activities, trading one contract 10 times per day while averaging a one-tick profit (which as we saw is a very high rate of return) may provide an income, but is not a livable wage when factoring other expenses.

There are no set rules on forex trading – each trader must look at their average profit per contract or trade to understand how many are needed to meet a given income expectation, and take a proportional amount of risk to curb significant losses.

Considering Leverage in Forex Trading

Leverage offers a high level of both reward and risk. Unfortunately, the benefits of leverage are rarely seen. Leverage allows the trader to take on larger positions than they could with their own capital alone, but impose additional risk for traders that do not properly consider its role in the context of their overall trading strategy.

Best practices would indicate that traders should not risk more than 1% of their own money on a given trade. While leverage can magnify returns, it’s prudent for less-experienced traders to adhere to the 1% rule. Leverage can be used recklessly by traders who are undercapitalized, and in no place is this more prevalent than the foreign exchange market, where traders can be leveraged by 50 to 400 times their invested capital.

A trader who deposits $1,000 can use $100,000 (with 100 to 1 leverage) in the market, which can greatly magnify returns and losses. This is considered acceptable as long as only 1% (or less) of the trader’s capital is risked on each trade. This means that with an account size of $1,000, only $10 (1% of $1,000) should be risked on each trade. In the volatile forex market, most traders will be continually stopped out with an amount this size. Therefore, traders can trade micro lots, which will allow them more flexibility even with only a $10 stop. The allure of these products is to increase the stop, yet this will likely result in lackluster returns, as any trading system can go through a series of consecutive losing trades.

While difficult in practice, traders should avoid the temptation of trying to turn their $1,000 into $2,000 quickly. It may happen, but in the long run, the trader is better off building the account slowly by properly managing risk.

For example, with an average five-pip profit and 10 trades per day with a micro lot of $1,000, the trader will make $5 (Note: this is an estimate and will depend on the currency pair traded). This does not seem significant in monetary terms, but a 0.5% return on a $1,000 account in a single day is notable.

The Bottom Line

Traders often fail to realize that even a slight edge, such as averaging a one-tick profit in the futures market or a small average pip profit in the forex market, can translate to substantial returns. Traders often enter the market undercapitalized, which means they take on excessive risk by not adhering to the 1% rule outlined above. Leverage can provide a trader with a means to participate in an otherwise high capital requirement market, yet the 1% rule should still be used in relation to the trader’s personal capital.

This is where having an edge comes into play. Even though combining an edge with sound trading principles means that profits will come as the account grows, the account must be large enough to provide enough monetary returns to support a livable wage. The edge is exploited by repeatedly putting enough capital into play (without excessive risk) to turn the edge into a livable income

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