I got an email today from FXCM telling me that they are closing their Canada branch (which is only offered to residents of British Columbia) because of higher then normal margins since November 2007.
My positions will be closed and account will be liquidated in 3-4 weeks, which in my opinion is horrible business on there part as some people might be in long term trades and out thousands of dollars when liquidated. But that’s besides the point here.
Now I am looking for another broker and I am overwhelmed by all the reviews out there, every broker I look at people have bad things to say about and I can’t find a solid solution, I don’t want to put tens of thousands of dollars in the hands of a business that could blow up the next day and I lose it all. The only broker I have experience with besides FXCM is FXPro (demo) and from what people have told me they are a dealing desk broker and I shouldn’t deal with dealing desk brokers.
If anyone is well educated on the variety of brokers out there can you look at my requirements please and make some suggestions for me to take a look at?
What I’m looking for in a broker:
Security! I want my money to be as safe in their vault as any bank
No Hassle Deposit and Withdrawal. Minimum and maximum withdrawals annoy me.
Good Spreads. Having a broker with consistent spreads that don’t increase by 40 pips during news would be great.
ECN/STP. I don’t have any experience with dealing desk, if anyone can provide an argument FOR dealing desk then by all means but from what I’ve heard it seems like dealing desk brokers have too much power and almost no transparency.
NOT NFA Regulated. I enjoy hedging, OCO, and Limit/Stop orders… I don’t want to conform to NFA rules now.
Regulated. While I don’t want NFA regulation I would like the company to be regulated by some other agency, basically this rules out all American brokers.
Good track record. Not a brand new company hopefully, a couple years or more of successful track record and enough assets to convince me of this.
I don’t think this seems too demanding, if FXCM can do it I don’t see why there isn’t any other good brokers out there that can.
Yes I got that email too. Looks like BC itself has made this happen due to some regulatory changes which probably FXCM Canada can’t/won’t meet. Anyways, they are offering to transfer our accounts to MF Global Canada. I’ll have to check them out.
If someone is in a long-term position that’s gone against them then they are already “out thousands of dollars”. Forex is marked-to-market on a continous basis. Every tick changes your balance. It isn’t like stocks. Besides, the position(s) can be re-opened with a new broker at basically the same level they were exited via FXCM.
ECN/STP. I don’t have any experience with dealing desk, if anyone can provide an argument FOR dealing desk then by all means but from what I’ve heard it seems like dealing desk brokers have too much power and almost no transparency.
There are a number of dealing desk brokers that seem to be just fine. Oanda is one prominent example.
NOT NFA Regulated. I enjoy hedging, OCO, and Limit/Stop orders… I don’t want to conform to NFA rules now.
The NFA rules (despite what some people are trying to say) do not restrict limit/stop orders or OCO. Yes, they disallow hedging, but that’s a waste of time, and potentially money in any case.
The positions will only be liquidated if you choose not to transfer your account to MF Global FX as mentioned by Sweet Pips. This option is available so that you could keep your position intact.
Brokers accepting accounts from residents of British Columbia have to be regulated by the British Columbia Securities Commission. Last information I heard, the BCSC has not adopted rules banning hedging.
We regret to inform you that due to new regulations in British Columbia, FXCM Canada Limited (FXCM) has decided to cease doing business in Canada as of September 19, 2009. We do however have a solution that will allow you to continue trading on the same platform with your positions intact. Our dedicated team will be available around the clock to help you throughout this transition.
Continue Trading with MF Global FX:
FXCM would like to extend the option of transferring accounts to MF Global FX to British Columbia residents so that they can continue trading. MF Global FX is a division of MF Global Canada Co., a Canadian broker and investment dealer regulated by the Investment Industry Regulatory Organization of Canada (IIROC). Customer accounts at IIROC member firms are protected by the Canadian Investor Protection Fund within specified limits. Learn More: MF Global Canada FX
Please note that your margin requirements will increase once your account is transferred to MF Global FX. These requirements apply to every IIROC member firm that offers trading in spot foreign exchange. Learn More: MF Global Canada FX
If you choose not to proceed with this option, your account with FXCM will be liquidated and closed after September 19, 2009. Please manage your positions accordingly. Learn More:
Sounds pretty much like a seamless transfer unless one doesn’t want to go with them.
You may want to try CFD and Forex Trading|Forex|CFD|FX Solutions Australia
However, if you are a US citizen… due to ASIC regulations, residents of United States, are not eligible to open accounts with FX Solutions Australia at this time.
Margin Requirements determine the amount of money you have to set aside to open a position. This is referenced as the Used Margin in the platform. You are most likely set to 0.5% margin (200:1 leverage) right now in which case you set aside $50 per 10k lot traded.
The IIROC (regulator) in Canada determines the allowable margin requirements for each currency pair that the broker must specify for its traders. MF Global has a list on their website. For example, the IIROC sets USD/JPY initial margin at 3%. In order to place a trade of 10k in USD/JPY, the initial amount of margin you have to set aside as Used Margin is $300.
The big deal or difference is that you will now be required to set aside more money to open each position. This is due to regulations in Canada.
