Account Funding

Trading Discussion
1

As difficult as it is to become a consistently profitable trader, one of the hardest parts of starting live trading, for me, has been funding the initial account.

I’m hoping to hear from anyone (but especially Canadians) about what they do to fund their account if they choose to trade in USD.

I’m Canadian, and I have a USD bank account with a bank located in the USA.

I have no trouble signing up with brokers who accept Canadians, but I have yet to figure out how to get a single USD into my account without first moving it into a Canadian account first and then back to the broker in USD - two conversion processes with all its attendant fees.

There has to be a better way. The US bank has given me a credit/debit card to use with it, but I need a US mailing address to use that card. I jumped through that hoop, but when I go to pay for anything with my US card the transaction either fails outright, or it gets rejected because they won’t accept anything with a US address.

I could open a USD account with a bank here in Canada, but most of them charge monthly fees, or they don’t have a method of sending money to my broker, for example, no wire transfers or credit/debit card.

I thought about using my equities brokerage to convert the USD into CAD using Norbert’s gambit but they charge $150 for any transfers out. Then I would still have to convert it back to USD upon depositing with the broker.

Some brokers will let you open accounts in CAD, but they are rare and I think I would prefer to keep things in USD, as it’s easier to do calculations in one currency.

I’ve tried using Skrill - it’s absolutely horrible. Least responsive business I’ve ever dealt with. Nothing worked to add a credit card or a bank account.

Any ideas much appreciated.

2

What am I missing, here, Clemmo? I don’t quite understand the problem … :8:

You already have, presumably, a Canadian bank account in Canadian dollars? Why not just open a forex-trading account (in USD) with any well-known, well regulated, standard forex broker (such as Oanda, for example, who are licensed in Canada), transfer funds into it in Canadian dollars from your normal bank account, let them convert it into USD as they routinely do for all their Canadian clients, and when you want to withdraw, withdraw in USD and let your bank convert it back into Canadian dollars as [I]they[/I] routinely do for all their clients who receive bank-deposits in foreign currencies?

You’re [U]clearly[/U] right not to use Skrill or any other such intermediary and unnecessary services that can cause additional expenses and delays: transfers directly in and out of bank accounts are far more sensible and convenient.

Excuse me if I’ve missed something obvious, or misunderstood your question, and/or if my comments are completely unhelpful, but I’m confused about why you seem to have a problem, here, that other forex traders in Canada (of whom there are many) seem not to have?

3

That’s Ok, I wasn’t clear in my explanation. I do have a Canadian account with CAD but would rather keep that account for day-to-day (home) use and trade using USD. I have a bank account with USD, that I would like to use for my trading.

I would like to avoid the conversion between currencies because the broker and the bank will add a hefty margin to the actual exchange rate, making for at least a few percent loss.

It seems like it should be an easy thing to just send USD to my broker using my USD bank’s debit card, but it isn’t. Services like Transferwise are great but they require you to exchange the currency before you send it. Western Union is a ripoff and my local bank is probably the only other way to SWIFT transfer money, and they charge about 0.5% of the total amount plus $25.00.

4

I see what you mean … yes, this is where your position is different from that of other Canadian forex-traders. Makes sense (as does trying to save a buck or two on the conversion-fees, of course).

I’m also surprised it’s hard to do what you need to do, here - but that doesn’t help you. (Western Union is an [I]incredibly[/I] expensive way to send money - definitely not one to use!).

I suppose it boils down to SWIFT or some equivalent. (Our banks now use a thing called “Faster Payments”, which I think is similar, but I don’t know how common/widespread it is. I don’t [I]think[/I] there are any fees attached to it, but that’s easy for me to say when I’ve only ever done it inside the UK and in £’s :8: ). Sorry - I am [I][U]no[/U][/I] help to you at all, here. :8:

5

It is surprising, but I’m sure it’s related to regulatory cautiousness and vigilant anti-money laundering. It’s OK for Canadians to trade with brokers who won’t take Americans, and it’s OK for me to have a US dollar account (there are two flavours of those - a Canadian bank with a US savings account, or a US bank that logically is in USD). However a broker who doesn’t take Americans won’t usually have any need to accept USD.

When I opened the US account I thought it would be more convenient. It would be if I was vacationing in the US (not recommended at the moment :P) but for all other purposes it is a hassle. A Canadian USD savings account is probably what I need, and I’ll probably just have to grin and bear the fees to do wire transfers. A cost of doing business I guess.

If you’re wondering why I didn’t just open the Canadian USD account in the first place, it’s because they used to be rare, and any cards issued with such an account won’t work in the US. Ironic, but financiers love their gateways.

6

Yes, I’m sure. Everything to do with moving money internationally is gradually but inexorably becoming harder to do, in these days of enhanced regulation and money-laundering and security considerations.

Lol … I’d still quite like to, some day (if they’ll let me in!) but would also like to see Canada, too. There’s tact for you!

Wish you good luck in somehow resolving this …