Who is liable for a loss due to a software problem ?

New comment
 

do you agree that chart/order entry program authors, brokers' usually only ? account

software, and data feed providers including exchanges are liable for any and all losses

that are a direct result of a problem with Their software ?

 

Hi Ace

No I can not agree.

We are responsible for using that broker, that data feed and ultimately placing that order.

We unfortunately live in a world where, due to a certain profession, there is always someone else to blame for our mistakes, when really there is only one person to blame.

As traders we take on risk every day and if we are not prepared to risk something for our income, we may as well get a job working for some company with a pay check at the end of the week with no risk whatsoever.

Just my 2 cents Ace have a good one.

Swagman

 

It depends on the situation.

If you are part of forex community, and if the broker is the part of it too so everything is solved by tradition of this community. At least - it is what I see for many years in many forums for many brokers and so on.

If the broker took the client from outside from somewhere, and this client knows nothing and knows no one so it is responsibility of the broker about how the broker will solve this situation with his client (if client is unknown and broker is unknown). In this case - forex community will not be able to help.

It also depends on the software problem ... Metatrader 4 or Metatrader 5, or datafeed?

Same situation.

Usually the brokers are trying to fix those kind of situations internally with the client. But there are some cases when the client (trader or anyone) is asking to help from forex community (forum members or anyone) placing complaints in public. In this case, I as moderator - will tell to the broker that

the broker is responsible for the clients and I will ask the broker to fix it and report in public for example.

And there are some cases when the trader is calling for help. But according to my opinion, it is mostly (in 95% biological probability ) related to "broker wars". Because competition between the brokers are very high.

To make it shorter: it depends on "who is who".

I know one broker who had some issue with datafeed: metatrader was "frozen" and was not moved by ticks for 1 day for real accounts (not demo). They fixed this issue and next days after that - Technical Director apologized, Director apologized, main programmers apologized ... and they did it with their real photoes together with working address posted ... so everyone can go to their office to meet them on the street for example. After that - all losing positions were refunded. People forgot about those case after refunds ... but the management apologized few days more IN PUBLIC. It was many years ago on some forex forum (I had account with them too in that time). But there are some different cases - owners and management are on Bermudas for vacation, and their representative is apologizing ...

So, it depends on "who is who" (means: part of forex community, or not).

 

Swagman, if you jump on bus and after a couple of minutes a wheel falls off, the bus

crashes and you are injured, do you think you are to blame for the accident ? do you

believe that the bus company has no liability for the injuries you sustained ?

the question isn't about a trader's mistakes, but software problems

I've posted this question on other forums and as here, it's gotten a very low response

which makes me think that very few traders have complaints about the software causing

trading losses

with fx trading there's many complaints about brokers but for futures and stock etc

traders there's more complaints about the several trading platforms and several data

feeds rather than brokers

thanks for your '2 cents' ; )

newdigital: yes, there are some fx brokers who are 'good guys' and make good on any

losses clients receive as a result of the broker's system going down

as said above, my question came out of the futures trading systems rather than fx and

my experience with MetaTrader and fx brokers has for the most part been very good

plus my location in Canada means in part a pseudo regulation by the US regulators

because Canadian regulators follow the US lead, but the province I live in - British

Columbia (there's actually 13 different regulators in Canada) prevents me from opening

an fx account with brokers in the US or UK for instance

so there's better ? protection I think for North American traders than fx traders in other

parts of the world

(remember the NFA going after GAIN because they were using that MT sub-program

to control how clients' trades were being filled ? don't know how the NFA got onto

that, did a client make a complaint ???)

 

Hi ace,

In this case - I do not understand your question sorry:

who is liable for a loss due to a software problem ?

You asked, I replied ...

Are you providing your personal data to the broker to open account? And you are sending the money to them as a your deposit .... and if something happened with metatrader, datafeed, spread increased a lot for example or something related so you will complain about broker.

But as I say - it is very difficult to prove that it is broker did mistake (not you)

or some other software? What they promissed? if nothing so - nothing.

The software owner/producer/distributor is liable (in general).

Brokers (in Canada for example) are buying metatrader software from Moscow and those brokers are distribiting those software to you for free based on the fact that you open/wll open some account with them (read: you will send some money to their company) ... so - who is responsible? It is "who is who" question anyway

But as it is very difficult to prove that some issue/bug in the software made you losses so ... that is why I replied in this way:

it is most important to be inside forex community (for you and for broker/software distributor/owner). I mean - "who is who" is more important than regulations.

 

Ace here's another one cent,

I thought we were talking about trading not a bus tour but anyway the same still applies the bus company did not force me to get on their bus, it was entirely my decision.

There are no guarantees in life.

Say a tornado destroys my house do I sue God or do I just get on with life.

Also I was not talking about traders errors, the subject of risk covers many topics from trade risk($), broker risk, loss of power risk, to computer failure while trade is open and on and on I could go, but this should all be covered in your trading plan.

Besides it's totally a mute point as all the providers fine print say that they are not responsible for any losses incurred while using their product. You either accept all responsibility or dont use their product, simple.

 

hi Swagman, newdigital

the thread originates from a thread at another forum that was relating a disconnection

problem with the AMP/NinjaTrader/CQG setup

NT was sound alerting a disconnection with the CQG feed then re-connecting within a

second, repeating every half hour or so

one trader said he'd lost 10 NQ points due to the disconnection and believed the broker

AMP was liable because they knew about the disconnection problem but failed to notify

clients

I see the loss as a CQG liability rather than AMP's, tho they have some responsibility

to notify their clients there's a problem with the feed that could affect orders, not sure

if they could get a message sent via NT or would have to email

I've never had a problem with MT except for occasional disconnections but nothing

that resulted in a trading loss

I think newdigital like you say, and with FXCM as the example I think of, settling in

favor of the client is what fx brokers may do

 

Who is responsible for software error?

I think it would be hard to get around the fine print usually embedded in the client-broker agreement - this usually absolves the broker from having to shoulder such losses. Given this basic reality, I agree with other posts in this thread that it might be advisable to provide for such losses as a part of occupational risk. However, as traders we can reduce this by taking some actions such as (a) vetting the broker with small size transactions before entering a higher value relationship, and (b) being meticulous about record-keeping, taking screen shots about problems, and generally being able to substantiate the error that caused you a loss. When you throw (b) at the broker, he might be more amenable to settling your problem. Also, a forum like this is an invaluable resource and discussing the problem might give you whole new insights about dealing with it. Wishing you safe trading!

 

I think, in this situation both traders and software owner are responsible for it. Traders use software on the basis of their own requirements while software owner promise for best service through their software.

 

I think even if you blame the fault to the brokers nothing would happen. Mainly because those kind of flaws are most likely be stated in the contract and that they're not liable to that

New comment
Reason: