BluFX is a prop trading firm which means their business model involves “funding” traders at a fee.
Blu FX claims that they’re providing traders with zero liability and no hidden cost at all. I doubt if this is the case.
They also claim that Blu FX is the “first innovative and subscription-based trading platform” which allows the best traders to arise to the top in the Forex marketplace.
On the other hand, we see that BluFX is trying to strike a healthy balance between a Forex broker’s operations and a traditional proprietary trading firm.
At some point, Blu FX will need a license due to the fact that they’re offering a fully-fledged trading platform like any other broker out there.
In fact, they’re offering MT4 software for download.
Their website is professionally-designed but at the same time, their brokerage operations are never clear at first sight.
Their About us page discloses that their CEO as Yu Song.
Yu Song claims that he has been backing traders and that coming up with a trading platform that minimizes costs while maximizing access to real trading is the driving force behind BluFX Ltd.
Having read the companies terms and conditions, I don’t see any truth in the above statement.
Some of the company’s terms and conditions states the following:
- Compensation is done on a profit split basis where traders take 50% of the profit only if there is a profit of 5%.
- Withdrawal requests can be made when subscription is active and the account has reached the 5% profit target.
- In case of refund, any losses made during subscription period will be deducted from the trader’s subscription money.
- Only a maximum draw down of 10% is allowed; traders must stop trading if draw down exceeds 10%
These are other several statements in their terms and conditions which restrict traders from having the freedom they would enjoy if they chose a regular MT4 broker.
Their method of operation is also quite interesting since their website states that there are no expensive training costs, complicated exams or trials.
Students are simply required to sign up, start trading to earn.
Is it that easy to make money trading the Forex market? The answer is Yes and No.
It’s a Yes if you are trained and have enough experience to trade the market without suffering a significant draw down.
On the other hand, majority of traders (95% lose all their money) to trading because they’re always falling into traps of companies that claim people can make money trading the Forex market even with no experience.
We see a similar pattern on Blu FX website. The fact that they’re opening their doors to amateurs means they’re setting them up for loses.
They claim that no exams, trials or hidden costs are involved.
This automatically works against the financially unsophisticated who may believe that the simple act of paying €99 monthly will mean profits are guaranteed.
They even claim that no deposits are required yet a subscription to one of their packages costs £249..
This subscription is paid out of the trader’s pockets and until this payment is done, traders cannot access the so-called funded accounts.
If they’re seriously looking for potentially good traders to share profits with, this service should cost nothing. That’s how we know whether a prop trading firm is legit or not with regards to recruiting traders.
Why BluFX Ltd is a scam
Generally speaking, funded trading account concept is a scam. Think about it:
You pay £99 or £249 (billed monthly) in order to get funded to start trading.
You are an amateur at this point, so you’re definitely going to kill the firm’s simulator account plus lose your subscription money in the process.
Blu FX management are not a bunch of idiots to let you gamble their money on a real account.
The fact is if you’re good at trading, you can grow any account regardless of the size of your deposit. On the other hand, poor traders (the ones that Blu FX Ltd are looking for) will always lose money whether they’re trading a £100 or a £100,000 account.
Therefore, if you’re up to the game, how about starting with whatever you have and growing your account gradually?
Unrealistic trading conditions
There are two subscription packs which come with numerous conditions that may limit traders in many ways.
For instance, hedging is not allowed, draw down is restricted to 10% plus the company Blu FX is making vague statements such as “unauthorized pattern of trading”, “unauthorized trades”, “unauthorized trading activity” etc.
There is no clear definition of what “unauthorized trading means” in their context.
Blu FX also reserves the right to terminate a trader’s account when they detect “unauthorized pattern of trading”.
No one knows whether these excuses for closing down a trader’s account are authentic.
Also, it’s not clear whether a trader will recover their original deposit which they paid for the subscription if their account is terminated.
We’re also concerned with the fact that despite BluFX offering brokerage services where they give access to MT4 trading software, nowhere did they mention their regulatory status.
This is quite disturbing because trading with a broker who is not regulated is not really safe.
Since their website’s domain is blufx.co.uk, we believe the jurisdiction of this firm is in the UK. If that is the case, they need to have a license from the FCA which is the main financial regulator in that jurisdiction.
Blu FX is probably using funded accounts business concept to circumvent these regulatory requirements.
By simply looking at their website, you will think their primary business model is to fund traders. When you dig deeper, you realize that BluFX is also a Forex broker.
Both professional and amateur traders are likely to lose their money to BluFX because of how funded trading business model operates.
The owner of Blu FX knows that you can’t beat the casino but they will definitely be on the advantageous side after the 14 day refund period has elapsed.
This business model favors the owner and not the trader. Even if there are traders using funded accounts to earn a living, they must be very few (if any).
Thanks for reading BluFX review. I’m looking forward to your comments.
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