InstaForex is an online forex broker that offers “instant forex trading” and online trading services to its customers worldwide.
According to its website, the relatively new company has been in business since 2007, and it also claims that 300 new traders open accounts with them every day.
The InstaForex Website
The InstaForex website consists of a comprehensive site with a wide variety of features for a forex broker and gives a quite impressive initial visual appearance.
The website has extensive pull down menus for all types of forex participants from beginners to seasoned traders, and it has an area for Partners where you can register as a referral partner with the company. They offer four different partnership arrangements such as an Introducing Broker or a “Trade-partner” where you recommend InstaForex to your friends and family.
The website gives the overall impression of a foreign, yet professional, forex brokerage that provides many incentives for new traders to join up. One such incentive is the opportunity to win a Lotus Elise sports car and a cash bonus when opening a new account.
Also, the trading platform offered is apparently “the most dynamically developing trading platform based on MetaTrader 4 terminal.” In addition, the Mobile version for Windows Mobile and MultiTerminal are offered by the broker.
InstaForex Website Contains Non Native English Text
Despite its attractive visual appearance, the English text on the InstaForex website is clearly non-native with glaring grammatical errors. For example, this is one of the first lines that gets your attention from the website:
“InstaForex trading conditions are universal tools for funds management at Forex market.”
While this language flaw will admittedly not be likely to affect your forex trading much, it is a forex fraud red flag for the company. Basically, if the company can afford to pay for a fancy website, the least they can do is have the text presented on it written in proper English.
On the surface, if you can get past the poor English, the website seems to be a legitimate forex broker, even claiming to be the “best broker of Asia”. Yet even this claim is worrisome since the verb “to broke” in forex market terminology implies the act of manipulating two parties into trading.
Apparently, the company did actually win an award from World Finance Magazine in 2009 naming them the “Best Broker Asia”. Nevertheless, Instatrader claims to be based in Russia and the “Best Broker Russia” was awarded to MasterForex by the same magazine, which has also been accused of being a scam.
Basically, the website does not give any overt indications of impropriety, although several items stand out. For example, raffling a fancy sports car does not seem to be necessary if you provide clients with an excellent forex broking service.
Also, if the company claims to be getting 300 new accounts a day, this begs the question as to why they would need to raffle off a sports car to attract new clients.
InstaForex: Who They Are and Who Regulates Them
In the “About InstaForex” section of the company’s website, InstaForex claims it is an ECN broker, meaning it is a member of an Electronic Communications Network through which it executes trades. The company also states that it is a part of the InstaTrade Investment Company.
With respect to regulation, the company maintains that it holds licenses in Brokerage, Dealing and Capital Management Services from the Russian Federation where it is regulated by the Russian Federation Federal Financial Markets Service. The website also lists four long numbers corresponding to their licenses.
What Former Customers Say
According to the InstaForex website, the broker has garnered a number of awards for best broker. Nevertheless, the list of accolades and the website’s boasting about InstaForex’s services and the attention afforded to their clients contrasts considerably with numerous online forum posts about the poor service they actually provide.
The two terms which come up most often in online forums in reference to this company are “bucket shop” and “re-quote”, two clear forex fraud red flags. Furthermore, the overwhelming majority of forum posts are complaints from customers sprinkled with an occasional five star review written in broken English and most likely coming from a correspondent or “partner” of the broker.
According to one forum poster, InstaForex’s service was “the worst broker I ever experienced.” The post continues by saying that the company always quotes wide spreads and their fills are consistently 5-6 pips away from the market. In addition, many people complained online of constantly getting re-quotes, especially when the market was active.
Having the broker need to re-quote the market repeatedly when the market is moving is a recipe for disaster when trading forex and it usually costs traders money since the broker will generally fill an order if the market goes against the trader. Basically, having all the nice bells and whistles on a forex trading platform will do a trader no good if the underlying pricing service that the broker provides is fundamentally deficient.
Bonus Scam Reported
The company also offers a $200 welcome bonus to new customers. Many online posters say they either did not receive this bonus or they claim that it was used in a scam by the company.
Apparently, the InstaForex bonus scam worked something like this:
- The bonus would be awarded and would appear in the account;
- The trader would then make some successful trades with the bonus resulting in a profit.
- The bonus and the profit would then disappear from the account.
- InstaForex would accuse the trader of obtaining the bonus fraudulently, thus justifying InstaForex in rescinding the bonus and keeping all of the profits the trader had made with the money.
Conclusion – Avoid InstaForex
Apparently, InstaForex is just one more highly questionable forex broker which takes advantage of the lack of regulation in the forex market, as well as people’s reluctance to go to the trouble of getting their money back.
Unless you have a burning desire to get into hassles with your money, or are a glutton for other forms of possible forex fraud punishment, avoid opening a live account with this company. Many other more reputable online forex brokers offer better service and more effective regulation, and so you would be much better off dealing forex through them instead.
Also, the old “if it’s too good to be true” line comes to mind when considering the tempting “Welcome Bonus” that InstaForex offers, in addition to the supposed opportunity to win a pretty sports car.
Really, what reputable online forex broker needs to raffle off a fancy car to get business anyway?