Agreed. — There is no rush here.
As regular participants in this thread log in over the next week, or so, I hope that we will get some useful comments and opinions.
I will be on the lookout for interlopers attempting to pad the voting results.
Happy Sunday to you, as well, FE.
As regards the “legality” of the offshore broker, it is not illegal, and you’re getting very good advice from Clint and others on that issue.
I’m more interested in your EA strategy, as you want to scale up to a serious trading business, so I’ll just comment on that. MAYBE IT’S BEST to move that discussion to another thread? Anyway, here are my questions and concerns. None of this is to “snoop” and steal your strategy but just to get some basis for evaluating, and giving some advice.
Is this a scalping strategy? Can you provide some more details of the approach. I can imagine that you might want “hedging” so that you could “attack” the market with Limit orders from either side buy/sell, and then when one or the other is “hit”, you could cancel opposite side orders, and take a small scalping targets profit on retracement. If it’s similar to that, then I could see why hedging (or the ability to take opposite side orders simultaneously in same symbol on brokerage) would make sense. Otherwise, intra-instrument hedging is just the same as exposure modulation, and it’s not necessary.
Very high leverage. Why do you want high leverages? Of course, if you have a legitimate reason for that, then you’ll be killed by the U.S. 50:1 limitations. But I’d like to know exactly why you need high leverage, as you pointed out. Also, does your intended trading strategy require a Small, Medium or Large account funding to operate efficiently?
A legitimate concern for a business would be limitations on offshore brokerage money transfer arrangements, so when you choose your offshore broker (perfectly LEGAL) you’ll want to have an in-depth PRIVATE discussion about transfer arrangements, and other things such as funds security; SOME OF WHICH should remain confidential with your broker, to fend off CFTC pressures should the methods be widely discoverable… 'nuff said. It’s a war anyway, between the U.S. agencies and the rest of the world, which is the rationale for this Amazing thread.
So if you want to put in a pointer to another thread to discuss the Strategy, and building a trading business in general, then that’s probably a good idea; leaving this CFTC thread to discuss purely the brokerage and business aspects, and availability of quality brokers for U.S. persons (or beneficiaries of your corporate entity).
Depending on your Strategy, you may be interested in the following topics, and I may be able to assist you in some of them: 1) Bid/Ask spreads (vary widely, as well as account types), 2) direct connection versus through a “service bureau” for your MT4 EA , etc. So if you need any advice on such issues, feel free to ask.
hyperscalper
Wow, this is awesome! So helpful… thanks Clint/Hyperscale. Not used to people being so willing to help I guess.
Hyperscale, you raise very good points, and as you guessed, my EA utilizes a hedging strategy for risk mitigation. The reason for needing leverage is simply to grow quicker :-). If I had to go with 50:1, my EA would still work… it simply would not give me the returns I have come accustomed to in my forward testing over the past months. Money Transfer arrangements are a concern… I believe with my current brokerage, I can deposit/withdraw $10k via credit card at most in one day, so when my profits grow, it could be an issue. I certainly would be interested in knowing how others deal with this. Also, I would love to hear your thoughts on bid/ask spreads and direction connection versus going through a service bureau. I would try to message you directly, but it seems that I need to have more posts on the board to have the authority to do so. Could you message me?
Can’t tell you how thankful I am for the help…
I have a live account with LMFX, been a little over a month. I started with a very small account and have been growing it steadily. Execution of trades has been quick. No requotes or lags. Opening the account and verification of documents was very quick, Instant 1:1000 leverage. Funding via credit card took about an hour to show up in wallet from which you have to transfer into the live account using funds management. I have not withdrawn any money from them yet. Overall, I have no complaints so far and vote for LMFX to be a trusted broker and if I do come across any problems I will report and update the thread promptly. Thank you to everyone that continues to contribute to this thread, it’s very easy to take the work of others for granted, and special thanks to Clint for managing the thread in a truly professional manner.
Thanks, Mindoverbull. Please stay in touch, and keep us updated.
[B]Some general thoughts on what “trusted broker” means:[/B]
In my opinion, a trusted broker is one who has demonstrated honesty and transparency in (1) advertising their services, (2) handling the funds of their clients, (3) executing the trades of their clients, and (4) complying with the laws and regulations of the country in which they are domiciled.
In my opinion, “trusted broker” [I][U]does not mean[/U][/I] low spreads, high leverage, sign-up bonuses, trading platforms with bells and whistles, or slick websites.
A broker who offers disappointingly high spreads and low leverage — but, nevertheless, adheres to the highest ethical standards in the conduct of their business — is a prime candidate for the [B]trusted broker[/B] designation.
On the other hand, a broker who offers rock-bottom spreads, sky-high leverage, sign-up bonuses, contests, and lots of other fun stuff — but, subjects clients to re-quotes, slippage, non-responsive customer service, and withdrawal delays — deserves to be identified as an [B]un-trusted broker.[/B]
You might have a different point of view on what it means to be a trusted broker, and your comments and opinions are welcome here. Please join in.
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TRADERSWAY and FINPROTRADING pricing.
I promised some Bid/Ask (pricing) spreads earlier, and so here’s
a preliminary result. Firstly, let’s put this into context. The Bid/Ask
spread is not the only factor in choosing a brokerage partner.
If you are a scalper, sensitive to costs, then the spread could be a
significant factor in your decisions.
The brokerage business is a tough one, no doubt, with fairly thin
margins so it’s understandable if a broker may use the spread as
an additional, but “hidden” cost of doing business which is
paid by the trader, just as traders pay commission.
My personal advice to traders is not to use account types which
build commissions into the spread. Get a VARIABLE spread account,
with Commissions for your best pricing. Accordingly, the tables
that follow show an Average, Minimum and Maximum Bid/Ask
spread in PIPs for each of 28 major Forex symbols. The spread
is expected to be “variable”, and that should be the choice of
serious traders.
This data is from LIVE MT4 ECN variable spread accounts at
Tradersway.com and FinProTrading.com and we’ll
just let the data speak for itself. Data is from a sample of
150 successive recent price ticks, taken on the hour.
Both of these brokerages have excellent pricing.
I can provide data 24 hours per day, but this is preliminary.
I don’t want to get into the business of doing this, but if anyone
needs an evaluation and has a standard MT4 brokerage, then I
could run that data, by special arrangement. I use the NJ4X.com
framework which handles almost any MT4 brokerage. The key is
whether Generic MT4 can be used on your brokerage, and this
excludes most U.S. MT4 brokerages, but includes most offshore
brokerages.
These brokerages have “tenths of a pip” pricing resolution and
also offer very small 0.01 (1000 Currency Units) lot sizes as well,
which is not usually associated with a narrow spread, but much
appreciated by smaller traders.
SUMMARY: As you won’t want to comb through this data, here
is a representative summary of certain common Forex pairs.
A sample for all the pairs, for the same time of day, will be
posted below. As retail spreads go, these are fairly tight, and
they are my two current favorite brokerages because of the
excellent retail pricing.
NOTE: 1.0 is one PIP. These spreads are fractional PIPs.
The timestamp is GMT or UTC time.
MINIMUM AVERAGE MAXIMUM PIPS
TRADERSWAY
EUR/USD 0.1 0.3 0.5
USD/JPY 0.2 0.5 0.7
AUD/USD 0.3 0.7 0.9
FINPROTRADING
EUR/USD 0.1 0.3 0.5
USD/JPY 0.1 0.3 0.6
AUD/USD 0.2 0.6 0.9
TRADERSWAY DATA:
timestamp,2016-03-21 13:00:28,1458565228429, symbol min|avg|max spread pips
AUDCAD,1.1,1.5,1.8
AUDCHF,1.6,1.9,2.2
AUDJPY,1.0,1.2,1.4
AUDNZD,2.2,2.6,3.0
AUDUSD,0.3,0.7,0.9
CADCHF,1.5,1.8,2.0
CADJPY,0.7,1.2,1.4
CHFJPY,1.1,1.4,1.7
EURAUD,1.2,1.7,2.2
EURCAD,1.6,2.0,2.4
EURCHF,0.8,1.0,1.5
EURGBP,0.6,0.8,1.0
EURJPY,0.8,1.1,1.3
EURNZD,2.3,3.0,3.5
EURUSD,0.1,0.3,0.5
GBPAUD,1.5,2.4,2.8
GBPCAD,2.5,3.3,3.8
GBPCHF,1.2,1.9,2.4
GBPJPY,0.9,1.4,1.8
GBPNZD,5.9,6.5,7.2
GBPUSD,0.6,0.8,1.2
NZDCAD,3.4,3.7,4.0
NZDCHF,2.7,3.2,3.4
NZDJPY,1.9,2.4,2.7
NZDUSD,0.8,1.2,1.5
USDCAD,0.7,1.0,1.3
USDCHF,0.5,0.8,1.2
USDJPY,0.2,0.5,0.7
FINPRO DATA:
timestamp,2016-03-21 13:00:22,1458565222969, symbol min|avg|max spread pips
AUDCAD,0.4,1.2,1.6
AUDCHF,0.6,1.0,1.2
AUDJPY,0.4,0.9,1.1
AUDUSD,0.2,0.6,0.9
CADCHF,0.8,1.3,1.8
CADJPY,0.5,1.1,1.2
CHFJPY,0.3,1.2,1.4
EURAUD,0.8,1.4,1.8
EURCAD,0.6,1.4,1.8
EURCHF,0.3,0.6,1.1
EURGBP,0.3,0.6,0.8
EURJPY,0.6,0.8,1.1
EURNZD,1.7,3.0,3.7
EURUSD,0.1,0.3,0.5
GBPAUD,1.3,2.3,3.1
GBPCAD,1.1,2.2,2.8
GBPCHF,1.2,2.1,2.6
GBPJPY,0.6,1.4,1.7
GBPNZD,1.0,3.2,4.2
GBPUSD,0.2,1.0,1.4
NZDCAD,0.3,1.1,1.7
NZDCHF,0.6,1.0,1.4
NZDJPY,0.8,1.3,1.5
NZDUSD,0.2,0.8,1.0
USDCAD,0.4,0.7,1.0
USDCHF,0.5,0.7,1.0
USDJPY,0.1,0.3,0.6
Good Trading !
hyperscalper
Hi Clint/Others thanks so much for all the help.
Is there a “trusted offshore tax attorney” list somewhere too that I can access? I tried looking through the thread a bit and searched the board, but could not find anyone. Not sure if it’s an issue to list names on the thread, but if that’s the case if someone could send me a message with info, that would be great too. Thx!
I’m not sure why you need anyone with offshore specialization… After all, revenues
are simply reported to the IRS and once you set up your “corporate entity”, depending
upon its status… then wouldn’t the focus be on properly setting up a "trading entity status"
for that, for tax advantage ?? I just don’t see how there’s any relevance to the fact that some or all
of your brokerages might (or might not) be offshore… I could be wrong. Just my 2 cents.
When are you quitting your “day job” ?? 
hyperscalper
Clint & HyperScalper,
I really appreciate all the info you guys have added to this thread over the years. I’ve been trading a couple of years and still find I’m green behind the ears in areas I thought I had learned everything I needed.
Over the past several weeks I’ve been going through old posts, and found what I had been told about taxes seems to be wrong. In fact a prominent east coast tax business told me several months ago it was illegal to trade offshore, and then I came across this thread.
This same tax specialist told me I had to split majors into a separate trading account in order to get the 60/40 tax treatment. Is there any truth to that? Is there another thread to speaks to these subjects?
Thanks,
Jerry
Hyperscale,
This is actually my point of wanting to find a tax attorney. Now that I know that I am “legal” thanks to this board, I am looking for advice on how to structure my business and report to the IRS in the most efficient manner. Do I setup an LLC? Do I setup an S Corp? If I am only reporting the bottom line profit and loss in the tax return (as was mentioned previously in this thread), then how can the IRS tax differently for the majors and minors? And regarding quitting my day job… latest by Christmas 2017 :53: (Apologies if I am taking this thread off topic and I will be happy to take it elsewhere if need be.)
■ Later today, I will clean up the List (remove all the previous red ink).
■ Also today, I will add [B]Finpro[/B] to our List, in the Europe category. Finpro’s listing will look like this:
• [B]FinproTrading[/B] (UK)
Type: STP/ECN. – Regulator: not regulated. – Segregated customer funds. — Accounts: standard, Islamic, and PAMM.
Other products: commodities, stock indices, shares, ETFs, and bonds.
Platforms: FinPro Station (including Web and Mobile), MT4, Zulu Trader (Web and Mobile).
Min. initial deposit: 100 USD (STP accounts), 200 USD (ECN accounts). – Max. leverage: 200:1.
Min. position size: micro-lot (0.01 std. lot).
Spreads: EUR/USD: 0.3 pip (average), GBP/JPY: 1.4 pips (average).
Website: Finpro Trading | A Leading Broker for Forex and CFD with over 1000 instruments
Email: <[email protected]>
Telephone: +44 79 6137 9058, or +44 20 3289 3467 (UK)
Note regarding Finpro spreads:
In the Finpro listing, above, I have shown the spreads posted by HyperScalper in his very detailed comparison of Finpro and Trader’s Way. But, I’m confused by the table of live ECN spreads shown on Finpro’s website — 4 pips for EUR/USD? Really?
Here is a screen-shot, taken this morning —
■ Regarding [B]LMFX (Macedonia)[/B]
This is my second request for information/comments/votes on the question of designating LMFX as a Trusted Broker. So far, we have gotten comments from two members, one of whom trades live with LMFX.
If you have something to say on this question, please speak up. Thanks.
More, later.
.
Clint- I’m glad you pointed out that a trusted broker doesn’t necessarily need to have the best spreads and etc.
I do believe as far as we’re concerned accountibility, as in they participate in this tread answering any questions and issues we may have seems much more valuable to me.
I have an account with Tradersway, Tallinex, FXchoice, ForexBrokerInc, and had not considered LMFX until after the recommendation from Jack72 and also until after I saw LMFX start to actively address issues some of our readers were having.
I do have a live account with LMFX and have been using them daily without any issues and I believe they should be given trusted broker status as long as they continue to address issues our readers bring forward. (As Paul with Tallinex has done)
I really appreciate this thread. I’m in Canada and surprised to see a bit of talk about moving here because the situation is even worse here, at least for smaller retail investors. In the province of Alberta and maybe some other provinces (I think BC is bad too), unless you have income of $200,000 and financial assets of $1 mil or net worth of $5mil, you cannot trade Forex at all with local brokers. Thanks, nanny state. So I signed up for FxPro for a while, but they just dumped Canadian residents Mar 21, and are giving us until Apr 21 to close our positions. They gave some vague handwaving reasoning about focusing on their core markets but I suspect it might be government regulation garbage. So I plan to try the trusted brokers here. I value this thread but wish there was a larger pool of traders vetting brokers. Maybe this should be turned into a full website “offshore broker review” or something.
Q: How the heck in our western “free” world do we let our nanny and/or corrupt governments control us like this when doing legitimate activity, forcing us to scurry like criminal tax evaders to companies in postage stamp sized countries with shady maildrop addresses? A: We do not value freedom enough. A2: We need to have a Braveheart moment and petition and find some way to help our governments see the light CTFC and all of its similar tentacles in other countries. I am a polite Canadian so I suggest petition. I will leave it to the Americans to suggest more literal interpretations of Braveheart.
[B]LMFX (Macedonia)[/B]
Thanks Bpr. I appreciate your input.
Regarding your last statement, I tend to disagree slightly. It’s great that Paul Cullen (representing Tallinex) is an active participant in this thread. But, I don’t consider his participation a [I]necessary condition[/I] for Trusted Broker status for Tallinex.
Likewise, it’s great that Maria and Mr. Videnov have introduced themselves here, and offered to answer any questions we might have regarding LMFX. But ultimately, we will have to judge LMFX for Trusted Broker status based on a cold, hard look at how the brokerage operates, not on the friendly conversations we have had with LMFX personnel.
We have two other Trusted Brokers (FX Choice and Trader’s Way) which do not participate in this thread, at all — although they both participate elsewhere on the Babypips forum. I hope that reps from those brokers will consider participating here in our thread, at some point in the future — but, their Trusted Broker status is not in jeopardy, if they choose not to.
[B]Berndale Capital (Australia)[/B]
The Berndale website is down. Is this just routine maintenance and updating — or is something else going on? Does anyone have any information?
[B]The Offshore Broker List[/B]
The List has been updated.
.
Hello Jared. Welcome to this thread, and welcome to the Babypips forum.
I agree with you on the situation in Canada. I have some connections in Canada, and I know what you are talking about.
I don’t think you’ll go wrong with any of the Trusted Brokers in our thread.
I’m glad that you find value here.
As for a bigger internet presence, I disagree. We are right where we belong, in my opinion. Babypips runs a tight ship, and doesn’t tolerate trolls, advertisers, or scammers. Those reprobates can be found disrupting and polluting less “regulated” sites. (Can you believe that I’m speaking highly of regulation?)
Anyway, my point is this: The relatively small group of active (voting) participants we have on this thread comprise a group worth listening to. I’d rather hear from a few of the guys and gals on this thread — rather than from a larger, more anonymous, less-well-known group of people, who may be joining our conversation with their own agendas.
Size matters is some things, but not necessarily in a broker’s country of domicile. An honest broker, operating with the highest ethical standards in a tiny country like Dominica, where forex brokers are not regulated, is a safer place for your money than with a wheeler-dealer in a big headquarters building in Manhattan.
There is a seething undercurrent of contempt for the Ruling Class in the U.S., and it runs wider and deeper than the Ruling Class can even imagine. That contempt explains the Donald Trump phenomenon. The Ruling Class keeps asking, 'How can dumb American voters support an obnoxious bully like Donald Trump? And the answer is, ‘He’s [I]our[/I] obnoxious bully — and he’s going to dismantle your dictatorial Ruling Class.’
Even when this is explained to the Ruling Class, they can’t comprehend it. The next 9 or 10 months are going to be very unruly in this country.
See there? — Your post made me get on my soapbox.
But, I’m going to quit now.
Thanks for your post. And welcome.
.
I could very well be wrong, but my “gut feeling” is that no Trusted Broker vote for any offshore broker should be accepted yet until the voter has had at least 6 months of live trading experience with the broker. That includes LMFX. If the broker really is good, they can wait to be approved.
[B]TradeWiseFX[/B] (SVG) — accepts U.S. clients.
TradeWiseFX | ECN/STP Forex Broker | Trade Forex Wiser
Their rep has been posting in the [I]Broker Aid Station[/I] forum for a little more than a month.
I haven’t looked at this broker, and know nothing about them.
.
Thank you for the mention Clint and as you noted yes we accept U.S. clients. For more information you can contact us directly or go to our web page.
Welcome to this thread, TradeWiseFX.
Are you Nasir Lakhany? (We like to address people by name, whenever possible.)
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The Berndale Capital website is still down.
I have sent an email to Berndale, asking for information.
Are there any Berndale clients currently reading this thread who can tell us what’s going on?
.