After several persuasive calls, Mrs. Rose Guion, Head of VIP Sales and Services - CFD1000, convinced me to invest in their Algo Trading solution (CFD1000 Algo Trading) which would give good returns. I was skeptical about investment because which I checked their website on scamadviser.com, the report said "Site is Russian Federation based and one needs to take caution when dealing with them as the indicator was inclined toward high risk. Also I was told that they were regulated by New Zealand however when I wrote to Financial Service Providers Register (FSPR), I was informed there is no such company registered with them.
In-spite of these two warnings I decided to trust on them and invest $1,000 to test the platform. I was informed by Rose that the company is in process of seeking regulation and that it would take time and I must not worry about it being regulated or not. I must say for some time I did see some profits in the account and then almost every few weeks I would receive a call from them stating we are running promotion and that I must invest more funds as they can double it up with their bonus. I decided to invest further $3,000 in it. Hence total equity from me was $4,000 and the total bonus on this account was $1,300.
During the initial few weeks the fund manager would take position and close it max in a day or two with profit or loss. However as the market started to become unfavorable the fund manager decided to allow the loss to continue and did not bother closing the loosing trade. Not only did he allow loosing trade to become even bigger loss but he continued to open new positions in the unfavorable direction. When I asked Rose Guion about this she told me don't worry about it, they are golden trades. Due to complete lack of money management and position sizing the losses continued to grow and eventually they caused a margin call to my account. When I asked them about why did they have to open so many positions in such a small account and why so big size positions, I was told the traders have done their best to manage the account. Surely by no means giving a margin call to client is in the profile of a fund manager.
I am not guru in investing but as per my knowledge most of the fund managers do not allocate more than 2% of the account size for any given trade and it would send shiver down the spine if any single trade exposes risk more than 5% of the account size. For my account, the average risk of the loosing trade was 20% and the highest risk was at 34%. Also there was simply no control in the number of open positions at any given single point of time. Keeping six positions of 0.20 lot and then hedging it with a mighty 1.20 lot size was certainly not a professional decision.
When I asked Rose Guion if the Fund manager have been right on their part of giving me a margin call, I was told they have done their best. Also when I asked how would CFD1000.com help me to recover the losses, I was told to invest more money with them and they will provide maximum bonus to me to help in recover the losses in next 12 - 24 months. Surely my confidence in them is at rock bottom.
I am not interested in profits and would like to get my investment back. Would you have any suggestions on how I go about dealing with CFD1000.com to seek justice. This will serve as a warning to their potential as well as existing clients. I am happy to provide further details if this would be required.