Forex.com Japan seeks to distance itself from EA sellers
The broker notes that it will not respond to enquiries and complaints concerning EAs and other related products used on MT4.
Forex.com Japan, the retail FX brand of GAIN Capital Japan Co., Ltd., has sought to distance itself from sellers of expert advisers (EAs) and related products for MetaTrader 4 (MT4). In an announcement to traders, out today, the FX broker notes that it is not responsible for any losses suffered due to the deployment of such products by its clients and that it will not respond to any complaints with relation to these products.
Although in its essence the message sent by this announcement is trivial – “we are not responsible for what results from the use of third-party software”, it also highlights some continuing problems for the online trading industry.
The first of them are misleading marketing slogans. Forex.com Japan notes that often EA sellers fail to warn about the risk of losses associated with the use of the advertised products.
Misleading marketing is something that has been accompanying EA sales for ages. The fraudulent practices include fake account statements touting extremely high profits generated by automated systems. Claims about artificial intelligence and neural networks supposedly being used in the development and work of an EA are also common (I once spotted the word “backpropagation” in one such advertisement – Ed.) Such claims should immediately raise a red flag for you, as, typically, an EA is just a normal symbolically programmed piece of software that needs regular updates and tweaking.
Then, of course, there is the issue of payments. Traders may not get what they were promised, their refunds may get stuck, etc.
Another prominent problem is that of the dream & the greed. Many traders would like a cheap piece of software to replace the need of them monitoring the markets and making trade decisions. Although advanced algorithms used by professional traders partially hit this target, expectations of an EA cannot be and should not be so high. But traders are tempted to confound the concept of “quality of software” with “profit claims” and so they fall for promises made about trading robots using Martingale and aggressive scalping strategies. When the money is gone, and gone it will be due to the use of such gambling strategies, traders often blame it on the broker.
So, that is why it is not surprising that Forex.com Japan had to issue such a warning. What is worrisome is that traders still fall for misleading marketing promises.