Hello,
I currently trade a small account with MB Trading. I am located in the United States. On a daily basis when I have open trades they assess a “daily premium” to my open trades. This can be an addition or subtraction from my account. It is usually a pretty small amount but it adds up over the months. They explained it as having to do with the currency exchange rates when accounts are “settled” for the day.
I am not sure if all brokers charge/credit these types of fees/premiums everyday but I thought I would ask and to see if anyone has broker suggestions in case I want to consider changing. It is a pain to do so but I would if it was worth it. I don’t need anything fancy-just the regular MT4 platform and a mobile app for iphone would be great to.
The premium you’re being charged/credited is due to the interest differential of the currencies you’re trading. Have you read the BabyPips School articles on “Carry Trades”? If not, I would highly suggest it - it’s a great tool to have in your toolbox even if you only use it to help you stay out of trades where the interest differential is too far against you.
Edit: Also, there are very few brokers who do not charge interest… Some brokers do this as Muslims cannot be charged or paid interest. The brokers make up for it by charging a commission, but you can’t have a carry in your favor. Also the only brokers I know who do this are not regulated and I would never deposit funds with them.
[QUOTE=“jadd806;587215”]The premium you’re being charged/credited is due to the interest differential of the currencies you’re trading. Have you read the BabyPips School articles on “Carry Trades”? If not, I would highly suggest it - it’s a great tool to have in your toolbox even if you only use it to help you stay out of trades where the interest differential is too far against you. Edit: Also, there are very few brokers who do not charge interest… Some brokers do this as Muslims cannot be charged or paid interest. The brokers make up for it by charging a commission, but you can’t have a carry in your favor. Also the only brokers I know who do this are not regulated and I would never deposit funds with them.[/QUOTE] thank you for the info. My broker is regulated and I do to have any concern with that. If most charge this premium the it is likely not worth making a switch. I will check out the post you referred to.
I think this is where you are really wrong. When it comes to regulation, please do not be confused and step outside the reality. What makes up the regulation? It is the regulatory bodies indeed. Most brokers today do not operate from the US/UK/AUS where the famous regulatory bodies like FSC, ASIC, CFTC etc are. Some regulatory bodies are from the offshore region and these ones are considered not serious enough. The question is How serious are the FSC, ASIC, CFTC…? Where are they when brokers under them keep cheating through slippage manipulation and the rest. The reason why the big brokers do not go AWOL is not because of the regulatory bodies but because it is not easy to open and just close a brokerage company. Also, it is a business and when a business is working fine for you, there is no need to close it down and run away with people’s money. If big brokers like FSCM go bankrupt today, who do you think can stop them from running away with your money? Some regulated have gone AWOL before and the regulatory bodies could not do anything to stop them.
My point is this: Do not feel because a broker is regulated, your money is 100% safe. Some offshore brokers you see today are under lesser regulatory bodies, yet they have been in business for a very long time because it is a big business.
As long as an offshore broker has a good track record and offers a very favorable trading condition, I don’t see why I should not trade with them. Forex itself is a very risky business. IF you do not take risk, you might not succeed.
You have a very good point. I do not really have this complete trust for my broker, but I think they are really honest and transparent. I am using an offshore broker I don’t regret it one bit. Their platform is very good for me.