Greetings, Pip Lovers. I’m looking for a good FOREX broker that satisfies all of the following requirements, and I’m having a little trouble doing so:
Broker type: STP or ECN (non-dealing desk, NOT a market maker)
US-based, or at least able to accept US-based traders (I am located in the US), account currency in USD.
Trading platform timezone: GMT -5:00, (US Eastern Standard time, so New York candle close when looking at daily timeframe)
Offers commodities (gold, silver, oil) as additional trading instruments on top of currencies. Stock market indices (such as the S&P 500) would be great too.
Of course low spreads, low (or no) slippage, and being registered with and regulated by all the major pertinent regulation commissions (CFTC, NFA, FCA, etc.) is important.
Any ideas? Experienced US-based traders - who do you guys trade with? FXCM almost satisfies all these requirements, except that I can’t trade gold and silver on it.
Like you I wanted a broker registered under CFTC or FCA if possible, but those I found never met other requirements. So I decided to go offshore. I looked at Clint’s posts on offshore brokers 301 Moved Permanently ) and contacted a few of them. I decided to settle for Profiforex. Offers all of the above, superb order execution but not regulated by any of those bodies. I don’t know much about SIBA anyway. It’s ok, at least I get to trade with a nice mt4 platform and withdraw my profits on a regular basis.
As you’ve already said, FXCM meets the first three requirements you listed. However, it’s worth noting that in regards to your fourth requirement, CFTC/NFA regulations prohibit forex brokers in the US from offering leveraged products (CFDs) for trading spot gold, silver and oil.
While our clients living outside the US can trade CFD products for commodities through our FCA-regulated entity (FXCM.co.uk), our clients in the US must trade through our CFTC-regulated entity (FXCM.com).
Thanks for pointing that out. That detail about commodity-based CFDs with US-based FOREX brokers was news to me. Now it makes sense why I couldn’t find one (and why traders here might want to use off-shore brokers). US regulations are fairly restrictive compared to other countries, no? What other constraints are you guys under in the US that don’t exist elsewhere? Just curious more than anything. I think I read something about the maximum allowed leverage being lower.
Anyway, I’ve been using FXCM for demo trading for a little while and have been generally pleased with everything. Transparency and reputability is very important to me when choosing a broker and from what research I’ve done, FXCM has a high level of both those aspects in my opinion. I’ve observed many of your responses here on BabyPips to other forum members and have been impressed with how you try to address each and everyone’s concerns with professionalism. Says a lot about FXCM I think. I don’t want to trade with some sketchy off-shore broker that advertises perfection (super low spreads, no commissions, no slippage, a million to one leverage) but has zero transparency and a very unclear track-record. Just read some of the complaints on here by members that decided to trade with some no-name off-shore broker offering awesome leverage only to see their money disappear overnight. No thanks.
That said, I’m sure there are good reasons I’m unaware of why traders go with off-shore brokers. And I’m sure there are off-shore brokers that are reputable and safe. Anyone care to enlighten me? Or maybe I’ll figure it out on my own eventually… :59:
The main regulatory differences that apply to forex accounts in US are the following:
[ol]
[li]The maximum leverage allowed is 50:1.
[/li][li]CFD trading is prohibited.
[/li][li]Hedging is prohibited.
[/li][li]All trades must be closed in compliance with first-in, first out (FIFO) regulations.
[/li][/ol]
That said, it’s important to keep in mind that US regulations are designed to protect US traders by setting financial standards that US brokers must meet. Furthermore, US law states that only US-regulated brokers are allowed to offer forex trading to US residents. Therefore, any unregulated off-shore broker that allows US residents to trade with them is in violation of US law. How trustworthy could such a company be? Who would you be able to turn to if you had a dispute with them?
How trustworthy could FXCM be? I mean FXCM has more court cases that any other broker on planet earth. The interesting part is that you get Fined in the end and that’s it. Does the clients receive their money back or get settled? Or does FXCM closes the account of clients and tell them they are no longer welcome? I have been a victim of scam by a regulated broker in the past along with some of my colleagues. In the End, the broker was fined and nothing came back to us. Our accounts were closed down and no response from the Regulatory bodies.
From that day, I took it upon myself to let others know how useless regulation is. They say that it makes you secure because you have someone to complain to, but I don’t see how this could get your money back.
"Any unregulated broker that allows US traders to trade with them us in Violation of US laws"
Did I here you say Law? Have you ever wondered why this Law even exist? This is all a product of Greed and Selfishness that runs in the Government of today. The laws were not created in favor of the citizens, but to attract more money from financial institutions who wishes to gain access to the US market.
"Who would you be able to turn to if you had a dispute with them(unregulated brokers)?
I can ask the same question about Regulated Brokers. I feel pity for those clients involved in your unethical practices but were never assisted. You get fined every time for your shady activities and you are happy, because you are wealthy enough to pay those fines and it does not stop you from repeating same pattern of scam.
Please if anyone is to complain about other brokers, let it not be FXCM.
While this is an obvious exaggeration, it’s worth considering that FXCM’s position as one of the largest firms in the industry means there is a brighter spotlight on us than other brokers. We embrace the responsibility that comes with all the attention we receive and believe in leading the way in transparency. Our new raw FX spread pricing model is just the latest example.
The NFA and FCA settlements for positive slippage are a case in point. When we first introduced No Dealing Desk forex execution in 2007, we did not pass on positive slippage on all order types. FXCM reimbursed current and former clients who were affected in full. In addition, the changes we made in 2010 mean that FXCM is now one of the only firms in the industry to pass on positive slippage on all order types including market and limit orders.
While not minimizing past issues, it’s important to note how FXCM has actively worked with our regulators to resolve them and ensure the best possible trading environment for our clients.
On the contrary, FXCM’s No Dealing Desk (NDD) forex execution means that we welcome strategies that dealing desk brokers try to avoid. We offset each client order one-for-one with the best available price from 10+ competing liquidity providers. That means we don’t take the market risk on the other side of your trades. FXCM does not profit from your losses or lose from your profits. Instead, we make our money off your trading volume through a transparent commission. Therefore, the more you trade, the better it is for us.
I’m sorry to hear you were taken advantage of by a regulated broker but going to the opposite extreme of advocating unregulated brokers is not the solution. The biggest concern with an unregulated broker is the lack of accountability and financial transparency.
Should traders do their own due diligence when choosing a broker above and beyond checking whether a broker is regulated? Absolutely, but making sure a broker is answerable to some government authority by being regulated is a bare minimum when it comes to the safety of your funds.
If a broker is unregulated, it means they are unable or unwilling (which is worse?!) to meet even these minimum standards of financial responsibility and transparency. Below are just some recent examples:
[B]Crown Forex[/B]
“Although some people with accounts were still able to get their money out at this early stage, many accounts were not refunded… [I]the company had no authorization from the SFBC for any activity in the financial sector in Switzerland.[/I]”
Unfortunately, that wasn’t the end of the story. A couple of years after going bankrupt, the people from Crown Forex were at it again, this time helping others become unregulated brokers.
[B]JadeFX[/B]
“fraudulently solicited and misappropriated more than $3.2 million from more than 500 customers in the United States and throughout the world to trade forex… [I]None of the defendants has ever been registered with the CFTC.[/I]”
FXCM’s goal is to provide superior trade execution, customer support and a safe place for you to keep your money. That is why we are one of the only retail forex brokers in the world that’s regulated in multiple jurisdictions across 4 continents and also a publicly-traded company (NYSE ticker: FXCM).
FXCM is good. I have worked with them. But presently I am with Finpro and I switched just because I am getting tighter spreads and quicker trade execution here.
They are fulfilling your requirements like its an ECN Broker. They accept US clients. And the trading platform timezone is as per your system’s timezone so that won’t be an issue. Commodities, Currency Pairs and Indices are also there. I don’t think they are regulated by NFA, but they registered with the Companies House UK. Their Spreads and commission I think are the lowest in the forex market.
Currently I use tradersway, fxcm and alpari…of the three, the first two should meet all trading related requirements except for the regulation part…but that’s a call you would have to make. So far no issues and I have been using these three for quite a few years. Either way, good luck…
I find AssetsFX to be the best, I compared it to FXCM
AssetsFX has literally the exact same feed as FXCM, on some of the pairs it can be .2 lower or higher. Other than that they offer even lower Commission and higher leverage.
I was shocked to find on my demo account that their feed is just as liquid as FXCM during low liquidity like new years/news etc.
the comission is about .50 cents lower than fxcm I think and the leverage is as high as 1:200
