MogaFX has a licence to operate but is based in an offshore region. The trading conditions of MogaFX seem very suspicious as well. You see, having a license isn’t enough to gain the trust of traders. There are plenty of other things you should look out for while looking for a broker.
In my MogaFX review, I’ll discuss whether this broker is reliable or not. So far, I found this much:
“MogaFX is based in an offshore area and has very suspicious trading conditions. It would be unsafe to trade with them. Please avoid them.
MogaFX License and Regulation
The parent company of MogaFX is based in St. Vincent and Grenadines, which is an offshore region. That’s not all however, MogaFX claims to hold a license from SVGFSA which is a clear lie because the SVG financial regulatory authority doesn’t give any licenses nor do they regulate forex brokers. So MogaFX is lying to its clients about its regulation. It makes them appear very suspicious.
The first thing you should always look for is the broker’s address. The address of a broker would determine which jurisdiction it would fall into. In case the broker belongs to an offshore area such as Marshall Islands or St. Vincent and the Grenadines, you should stay away from them and as you would have noticed, MogaFX is one such broker.
Apart from the location, you should always check whether a broker is licensed or not. Unregulated and unlicensed brokers are very dangerous as they can steal your funds (through hidden charges) and even your private data!
Fortunately, MogaFX has a license from ASIC. I verified this claim with the ASIC register and it turned out to be true.
However, the ASIC doesn’t provide much facilities to the traders, which is why I don’t recommend ASIC-regulated brokers.
Prominent regulatory authorities such as CySEC (Cyprus Securities and Exchange Commission) or FCA (Financial Conduct Authority) have many rules and regulations. These regulations make sure the broker doesn’t harm the interests of their users, and doesn’t deceive them.
Moreover, these regulatory authorities have insurance policies in case one of their licensed brokers breaks a regulation or steals their users’ funds. The Australian regulator doesn’t offer these advantages so trading with their brokers is quite a risky affair.
MogaFX Trading Conditions
Even though the license of a broker can tell you a lot about its reliability, the second-most important factor is its trading conditions. What trading platform does it offer? What’s the minimum deposit limit? We’ll discuss these factors in detail to determine whether MogaFX is a reliable broker or not:
MogaFX offers the MetaTrader 4 and 5 trading platforms to its clients which are also the most popular trading platforms in the industry. They pack a lot of features and benefits while providing excellent customer support. That’s why around 80% of the industry uses these platforms.
However, many shady brokers try to use the excellent reputation of MetaTrader trading platforms to appear trustworthy. In this case, it seems MogaFX is using the same tactic.
MogaFX requires a minimum deposit of $1000 to start trading with them. This is around ten times higher than the industry norm. Usually regulated brokers don’t keep their minimum deposit requirement so high.
A high minimum deposit usually indicates that the broker is a scam. Most regulated brokers keep their minimum deposit requirements around $100 or $50. That’s because they want to give their new users a chance to experience their services without making a big financial commitment.
On the other hand, shady brokers don’t want you to test out their services, usually because they are terrible. They force you to invest a heavy amount at the start so they can steal at least that amount from you. You should stay away from brokers that have high minimum deposits.
MogaFX has a very excessive minimum deposit. They require you to deposit $1000 while the industry average is $100.
Leverage and Spreads
The leverage ratios this broker offers are very risky. The minimum leverage you can get with MogaFX is 1:100 while the maximum is 1:500. Even the minimum is substantially higher than the industry average.
If a broker offers a very high leverage, you should be wary of them. Many financial regulators in different regions have imposed restrictions on how much leverage brokers can offer to their clients.
For example, in the US, a broker can offer a maximum leverage ratio of 1:50.
They have these restrictions because a high leverage ratio can cause you huge losses very quickly. Such leverage ratios are dangerous for new traders particularly.
The spreads are the prices you must pay for executing a trade. That’s why I recommend trading with brokers which offer lower spreads. MogaFX offers 1.5 pips spread on the EUR/USD currency pair, which is quite higher than the industry norms.
MogaFX Payment Methods and Charges
MogaFX offers several funding options to its clients: credit or debit cards, FasaPay, Wire Transfers, Bitcoin, and Sticpay. It’s best to deposit funds in your trading account through bank cards as they let you chargeback within 540 days of the transactions.
MogaFX doesn’t have any minimum withdrawal requirements and claim to process withdrawal requests within 48 hours of getting the request, which was quite impressive.
MogaFX has different charges for different transaction methods. For example, they charge $25 if you withdraw your funds through Wire Transfers.
This broker doesn’t specify its maintenance fee or inactivity fee, which is very shady. When brokers don’t specify certain charges, it allows them to levy unfair charges and steal their clients’ funds.
Reliable brokers keep things transparent but MogaFX doesn’t making it very difficult to trust them.
MogaFX offers plenty of bonuses to its clients. However, the conditions that come with those bonuses ruin everything. To withdraw your funds after accepting the bonus, you must execute 20% of the sum in lots. Suppose you get a $100 bonus. You’d need to trade 20 lots, which is $2,000,000 USD in turnover, which is a preposterous amount.
You shouldn’t trust a broker simply because it offers bonuses. Bonuses can be quite dangerous as they allow the broker to impose certain restrictions on withdrawal without the user knowing about them. Forex scams use bonuses to lure people into signing up on their platforms too.
This is why the UK’s financial regulator, FCA, prevents its brokers to offer bonuses to their clients.
Is MogaFX a Scam? Yes!
The forex industry has expanded exponentially in the last few years. Because of that, many kinds of scams have entered this sector as well. Usually, a scammer would target novice traders through bonus offers and bogus claims so they would sign up on their platform. Such brokers usually have unfair terms and conditions but people rarely read them before accepting the same.
When a person finally signs up and makes a deposit on their account, the broker can do whatever they desire. They can steal the user’s funds through hidden fees or even steal their private data.
Usually these brokers operate from offshore areas such as St. Vincent. These regions don’t have financial regulators like the US or the EU so they have become havens for shady forex brokers.
MogaFX Review: Conclusion
Even though MogaFX holds a legitimate license, it has very shady trading conditions and the broker has hidden some very vital pieces of information. You should avoid trading with such a shady broker.
I hope my MogaFX review helped you make an informed decision regarding this broker. There are many scams in the forex industry similar to this one. It’s best to stay alert and do some research before signing up with a new broker.This review has been syndicated from The Skeptic Tank To read the full review, go to – www.skeptictank.org/mogafx/