Structured and well-planned, this is the beginning of the specification list an ideal broker should have. But the broker TenkoFx is alien to both. The website of the broker lags and provides unclear information, leaving the first time visitor and a potential trader, clueless. Let us look at TenkoFX in detail and decide whether the broker is a scam broker or not.
Summary:
In terms of staying on the field, TenkoFX is far from its competitors. The market first saw the broker in 2012, and the market is also a witness to its inconsistent performance throughout the years. The broker claims to be regulated by the IFSC, offshore. Offshore regulations are not to be trusted as it is easy to gain them.
The broker barrs the residents of the USA and several other countries to trade. Contrarily, more than 48% of the Americans are active traders, barring the residents of such a country and several others shows that the broker is insecure as these people know a lot about the market.
The broker charges ECN fees on most of its trades. We will read about this condition further in the review.
TenkoFX: Scam or safe?
As we read the website and moved further by researching the regulations section, the “scam vibe” got more prevalent. Under the regulation announcement, the broker shows a complaint registration process button, which was last updated more than five years ago.
On top of it, it’s an actual form where the trader has to first know what he can complain about and then make the complaints accordingly. Even those specifications are not displayed properly and are a mere PDF document. Since it is an offshore regulated broker, there is a goliath probability that it fails to offer any more protection.
TenkoFX account types:
The broker offers three chief accounts. The major differences in these accounts happen only when the trader is at a chance of making money. Apart from this, there is nothing new in any of the accounts.
The three offered accounts are STP, ECN and crypto. Each account has a possible slippage situation.
The maximum leverage offered in the account is which minimum balance is the highest that is, $100. This simply means that the broker wants the traders to use greater capital and enter trades with high leverage. The broker also gives an option to go a little easy with leverage and at the same time, makes sure that the value of such a trade compensates for the leverage that is being missed out.
Leveraged trading is a dangerous practice and should be used very carefully. The broker TenkoFx, however, despite knowing this, offers the maximum leverage with first trading capital itself.
When it comes to spreads, the broker asks different spreads, in addition to different commissions on trades.
The broker makes the margin call at 50% for the STP account, at 100% in the ECN and at 30% for the crypto account. This means that the broker will start making the trader uncomfortable when just 30% of his equity is at stake, at the same time it will make the same call when all of the equity is at stake but is linked with the ECN account. These are very clear indicators of the money being at risk no matter how much safe the trader tries to play.
The crypto account offers scalping with restrictions at the stop loss and limit- profit orders, keeping the fact in mind that it charges spreads too, which are again variable. Variable spreads are generally subject to market conditions and brokers like TenkoFX move them at their will.
ECN fee:
The broker asks for an ECN fee for each of its accounts. Let us understand what ECN fees are and how it can negatively affect the profit of a correct trade.
Think of a riverside, with multiple bridges leading to the other side of the river. You have a guide with you, who will take you through one of these bridges. The bridges in return will ask the guide to pay some fee as it uses their services. The guide will now have to pay and at the same time, make up for the paid money. Where does that come from? Out of the traveller’s pocket of course.
The point of this analogy is that the bridge is the Electronic and communications market and it always asks for some money to the broker as it helps when the buyer and the seller meet, as a middleman’s fees.
Brokers like TenkoFx make sure that the ECN price, as well as some more money, is taken out of the traders pocket.
Generally, high ECN services are charged when the trader tries to take the liquidity off of the market.
Scam brokers make the traders pay just for the fact that they opened a position or closed one. Closing a position would take the money away from the hand of scam brokers, and brokers like TenkoFX won’t let it happen without earning a profit for themselves.
Trading platform:
The only trading platform that the broker provides for trading is the Metatrader4, despite it being succeeded by the mighty MT5. the trading platform restrictions are major hurdles for profit-making trades. Older platforms have some things missing, because of which a newer version is made available. Generally, new indicators and mathematical tools are added in updates.
TenkoFx forces an older platform to its users so that they are not well versed with the latest technological advancements in trading and can not make more money.
The broker also does not provide the users with any specialised trading platform from within the firm. It looks like, due to some unknown reason, the broker is obsessed with MT4.
Tradeable instruments:
The tradable assets are nowhere clearly mentioned on the website, at least not under the same heading. The trader has to look for contract specifications. Even there, metals and forex can be seen. None of the words in the list spell stocks, the most common tradable instrument. The only contract specification mentioned is for forex and metals, with forex being highlighted so much that the trader subconsciously gets attracted to forex trading and pairs.
TenkoFX account opening process:
The first pop a potential trader will see here will be for the crypto trading account. A potential and smart trader will look for a demo account first which she won’t find when she first looks for it. By the time she has visited the demo account button, the broker exposes the trader too much more appealing areas of the page.
The accounts can be accessed under the account types option. On the same page, lies twisted information about each account, we recommend our traders to properly interpret each sentence that the broker claims. Such indirect statements are logically correct, but most of them have an underlying agenda.
Commission and fees:
The broker asks four units of the base currency as the commission for each lot. The commissions can also increase by a number or two just in case the volume of trade is higher, or in simpler terms, the trade is favouring the broker from each side of the game.
The spreads are kept variable for each account. This again means that the broker will start asking for more money as soon as the trade starts favouring the trader, where the broker is in a forever win-win loop.
Research and analysis:
The latest information which the broker supposedly claims to have, is in fact, not latest in any sense. There are different readable items posted on the website that are days old. Besides, the broker makes sure that the trader can see the news that involves only forex and cryptos.
The broker goes to the limits of adding a technical blog, with appealing different charts for different time frames. A time frame less than a 15-minute span can not be viewed by the trader. Day traders and swing traders, in particular, are in immense need of such charts as smaller time frames can be made profitable by increased trading volume. TenkoFx provides the users with indicators but misses out on crucial indicators like the Bollinger bands, and the Donchian channels. These are important trend indicators that clearly depict the rise and fall of an asset. These indicators are also the backbones of major trading strategies like trend trading. Indirectly, the broker stops the traders to trade in profitable ways by restricting their access to correct indicators.
Final verdict:
The broker TenkoFX is a scam, and no trader should be involved with such a broker. Indirectly the broker asks for money, and the innocent trader has to unknowingly pay for it. The broker also doesn’t mention stock or stock trading anywhere close to the home screen.
We recommend our traders to more experienced brokers like HFTrading, brokers who are more versatile in terms of performance, PrimeFin, for example. There are brokers who are factually backed, like TradeATF, being the sponsor of the football team of Argentina.
