Going offshore to escape the CFTC

Broker Discussion Forex Brokers
2664

Thankfully, I wasn’t trading that day and I do use stops, always.

However, you might want to remind yourself that stop losses are only as “good” as the traders who are willing to take the other side of a trade at that price (where one has their stop set). In the case of the SNB announcement, there weren’t enough traders willing to take the opposite side of those trades. Thus, the “lack of liquidity” and a big part of the reason for such an unprecedented move.

On your chf charts, go out to a weekly view and you will see where big money players had their orders parked. That is where enough liquidity finally came in to take the opposite side of the stop losses and thus, the price stopped at that location (weekly support / resistance).

2665

NEW BROKER FOR NEXT UPDATE OF LIST.

We trade Dukascopy, but were getting some grief. My partner identified
Atom8 (http://www.atom8.com) as a viable alternative, if we needed to
switch. This could be a great way to get JForex access, and they are based in London.

They are a 100% compatible Dukascopy JForex provider; I checked it out in
depth. As with all “white label” partners for Dukascopy, they have direct
connection to the SWFX ECN. Best retail trading venue in the world for
pure Forex.

BUT Atom8 makes no mention of Dukascopy (normally a big selling point),
hence the idea of a “pure white label” partner.
They call their JForex variant “Atom8 Trader”.

I do not know of their financial stability but they are regulated, I believe.
Unfortunately, they do not accept U.S. clients to my knowledge.

Good Trading !
HyperScalper

2666

You are correct.

2667

Sorry, Compounder, but your suggestion is totally off the mark because you clearly don’t understand how a real brokerage operates.

With genuine ECN/STP brokers such as Tallinex, the chain of participants is:

Client - Tallinex - Liquidity provider - Banks

When you, as a client, try to open a position, Tallinex relays the request to its liquidity provider who identifies the best price available from one of its market-making banks, accepts the position and the fill price is passed back up the chain to be displayed in your trading terminal.

Just as you must deposit funds with Tallinex, Tallinex must deposit with its liquidity provider and the liquidity provider must deposit with the various banks.

But, since trading is typically executed with the benefit of leverage, poor trading decisions by clients can easily result in accounts becoming negative due to over-trading.

When that happens, the banks (who basically never lose out) deduct the loss from the liquidity provider, who deducts it from the broker’s deposited funds, and the broker reports a negative balance on the client account.

Therefore, your proposal would simply limit the profit/loss of clients whilst leaving their broker exposed to unlimited losses (or perhaps profits), and is effectively what brought down so many brokers this month…

Clients trading irresponsibly using leverage resulted in huge losses which banks immediately recovered from liquidity providers. The LPs, in turn, emptied the coverage accounts owned by brokers, which left the brokers with no cash to continue trading activities and negative balances on their clients’ accounts.

Due to the fact that 99% of retail traders have minimal cash assets and are only able to trade by using credit from their broker (leverage), coupled with the ease with which people in the US and EU countries can ignore debts (or just declare bankruptcy), the possibility of recovering those losses are negligible. Even if it were possible, the negative publicity that would result from “xxxx broker took my house away” accusations pushed brokers to just forgive the balances. Legally and morally, however, those clients were responsible for repaying those negative balances.

In summary, the only brokers who would benefit from your proposal are the ones who trade against their clients - they have no liquidity providers to deal with (so were totally unaffected by the SNB move) and would simply be cutting short profits and forgiving non-existent debts.

Consider the SNB move in terms of a a broker with two clients - each with a $1,000 account, one long 1.0 lot and the other short 1.0 lot - both orders with 100 pip TP and 100 pip SL:

  1. with a real ECN/STP broker
  • Short client account balance: $2,000 (100 pips profit - instant exit due to glut of buyers)
  • Long client account balance: $-12,000 (-1200 pips loss due to lack of sellers)
  • Broker position with liquidity provider: $-11,000
  • Chance of long client repaying the debt: 0%
  • Loss suffered by broker: $-11,000
  1. with a non-ECN broker
  • Short client account balance: $2,000 (100 pips profit - instant exit due to no counter-party)
  • Long client account balance: $0 … -12,000 (up to 1200 pips loss at broker’s discretion)
  • Broker position with liquidity provider: N/A - no liquidity provider involved
  • Chance of long client repaying any debt: 0%
  • Loss suffered by broker: NO LOSS - broker gained $1,000 deposit lost by the long client and used that to offset the $1,000 gained by the short client

… and any negative balance held by the long client can be written off because the broker has no 3rd-party obligation for that amount.

I hope the above helps people to understand the mechanics of Forex trading and how brokers are involved in the equation.

2668

Unfortunately, they do not accept U.S. clients to my knowledge.

Did they give out a reason for it by any chance?

2669

Yes, of course, a high proportion (nearly all, but not all) of foreign brokerages, due to U.S. FATCA regulations are opting not to serve U.S. residents. In a nutshell, the U.S. is forcing all other nations to be the “nannies” and work for the I.R.S. or to be subject to heavy penalties. This forces participating foreign brokerages to increase their administrative costs to service reporting requirements for U.S. residents.

This is very well known everywhere in Forex. Many of the “good brokerages” are strictly off limits to U.S. residents, which is the very subject of this very long thread … In the sticky top posts of this thread you’ll see an up to date listing of options for U.S. persons, very kindly maintained by Clint, I believe.

HyperScalper

2670

I had not received any detailed instructions as of Thursday 19:00GMT. Chat transcript attached.

Seems we won’t have to port MT4 templates. A big time saver.

Chat session with [B]Tallinex Support - TS[/B] - [B]Customer Service[/B]

[I]Regarding FinFx account transfer[/I]
[I][B]Tallinex Support - TS has joined the chat.[/B][/I]
[I][B][B]Tallinex Support - TS (11:18:45) :[/B][B] Yes, please?[/B]
[B][B]Dave (11:19:11) :[/B][B] Are there any details to know about my transfer from FinFx? How do I log in at Tallinex? Do I need to download Tallinex MT4?[/B]
[B][B]Tallinex Support - TS (11:21:04) :[/B][B] Details: During weekend you receive updated login number, updated password and updated MT4 server field[/B]
[B][B]Tallinex Support - TS (11:21:27) :[/B][B] With these you can login to your existing FinFX MT4 and continue to trade with your existing charting setup.[/B]
[B][B]Tallinex Support - TS (11:21:49) :[/B][B] You do not need to download Tallinex MT4.[/B]
[B][B]Dave (11:22:08) :[/B][B] OK. How do I process withdrawals in the future?[/B]
[B][B]Tallinex Support - TS (11:24:40) :[/B][B] It is easy. You also receive Tallinex Back Office credentials. In there you can place a request for withdrawal.[/B]
[B][B]Dave (11:25:34) :[/B][B] And I will receive both credentials this weekend? I will be able to trade Asia session on 1 Feb?[/B]
[B][B]Tallinex Support - TS (11:25:56) :[/B][B] Yes, correct.[/B]
[B][B]Dave (11:26:03) :[/B][B] Thank you very much.[/B]
[B][B]Tallinex Support - TS (11:26:51) :[/B][B] You are welcome, Dave.[/B]
[B][B]Tallinex Support - TS (11:27:00) :[/B][B] If you have questions we will gladly assist.[/B]
[B][B]Tallinex Support - TS (11:27:15) :[/B][B] Thank you for choosing Tallinex![/B]
[/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/B][/I]

2671

Thank you for this list!

2672

Technically, I don’t believe this could be done unless the broker was bucketing your orders. I also don’t want a cap on my upside. If I had been wise enough to be long CHF… AND they capped my win at 400 pips I’d be very unhappy.

When EUR/CHF melted down, stops weren’t filled because there weren’t enough bids to offset them. Everyone was long at 1.20. Underneath, nothing but air. The real money was parked down near parity back in 2011. I started seeing stops filled at 1.0135

I’m sure many brokers are devising plans for some safety net. I’m sure regulators are coming up with more onerous policies as well. The problem is that the broker’s LP’s are the ones holding their (our) money, so I don’t know how they could implement your suggestion?

Seems everyone would be happy to bankrupt their broker and let them take the hit when it wasn’t their fault. I was talking to an offshore broker just the other day and he told me they can’t take credit cards anymore, because traders were charging back their losses. The risk managers at the credit card companies have had enough. No more Forex. Another tool for the retail trader removed. The walls keep closing in on us, and the CHF debacle is just serving to speed up the process.

2673

Hey everyone I am new to the forum. I have a question and hope someone can help me with. I am a US citizen and resident and I am looking for a broker that will allow me to trade forex vanilla options. If anyone could help me out that would be great. Love the forum and this thread is great.

2675

Yep. I said the same a page back.

2676

Yes, I admit that in my last comment I had not fully thought through everything related to what I was trying to say. The post was really more of a “knee jerk” rant (like the recent good one by aaceofspades) against proposals, rumors, and threats to decrease trading leverage, an almost sacred right we traders hold dear. Surely [B][I]SOMETHING[/I][/B] can be figured out to avoid leverage reduction or even thinking about it, which I personally consider unthinkable. And I can definitely understand why some traders would be quite unhappy if their windfall profits in any future “Black Thursday” were capped or partially seized by the broker to offset broker losses. Thank you Tallinex for your helpful explanation of the severe vulnerability of some brokers.

Yes, I realized when I posted my last comment that the protective stops were “blown through” and became worthless on Black Thursday. In a future similar crisis, though, some of the stops might hold. I really do think however that enough money can or should be able to be made during normal, day to day trading conditions, and so I personally would be willing to let the broker have most of my profits (to help offset the negative balances of the losing traders) if I had a winning trade with extremely high profits during any future Black Thursday. But if other measures can be created to help protect the precious few 15 brokers in List 1, then I would of course want to keep my profits.

2677

[quote=“aaceofspades,post:2672,topic:35612”]

Technically, I don’t believe this could be done unless the broker was bucketing your orders. I also don’t want a cap on my upside. If I had been wise enough to be long CHF… AND they capped my win at 400 pips I’d be very unhappy.

Yes, Ace - that was my point yesterday … the brokers who trade against clients (no names mentioned but they’re on this list) would rightly be crowing about minimal losses and forgiving balances, because they wouldn’t have any real losses to worry about… and their clients’ negative balances were all virtual money to begin with.

However, every true ECN/STP brokerage took a hit to some degree - if you consider that a 1.0 lot short CHF position represented approximately $10,000 - $14,000 in losses to ECN brokers, you can gauge how many lots companies like FXCM were holding at the time.

Yes - this is also a problem that will cause huge issues if attitudes don’t change. Very many acquiring banks decided to block US transactions over the last few weeks due to the US mentality of looking to pass blame / responsibility on to others. Considering the time and expense involved in handling/fighting the growing number of fraudulent disputes (for the card issuer, the Visa/Mastercard arbitrators and the vendor), it’s no real wonder that banks are saying “Enough is enough!”. At the end of the day, if you keep kicking a dog, it’s gonna turn around and bite you.

2678

Hi TALLINEX,

 I am one of the U.S. traders that was absolutely very happy trading with FinFx until my account had to unfortunately have been transferred to Tallinex.
 I can only hope that your company takes care of my account as well as FinFx did.
2679

Tallinex sent login information this morning. MT4 up and running. So far, so good, but I can’t login to the website and see my account or process a withdrawal yet. I have high hopes for this broker. We’ll see.

2680

The last paragraph of the email from Tallinex with the MT4 login info states that information for logging in to their back office to process deposits / withdrawals will come in a separate email.

Quote:

[I][B]Remember: The above information relates only to your MT4 trading account.
You will receive another email containing your new Tallinex back-office
login details, but that is not required to trade your new MT4 account.[/B][/I]

2681

Good Monday morning, guys and gals,

I’m going to add the following post links to our List:

• in the [B]Tallinex[/B] listing — posts #2444 and #2497

• in the [B]Forex Metal[/B] listing — post #2466

• in the [B]AssetsFX[/B] listing — post #2490

• in the [B]FX Choice[/B] listing — post #2491

And I will remove all the old red highlighting from the List.

2682

I always find it interesting when MT4 losses connection for a few minutes and gaps are formed on charts. Here’s a screenshot of the pairs that I watch. Obviously, this is hardest on scalpers but, I find it irritating also. Had to drop down to 1m charts where it’s easier to see them.

047.jpg700×307 48.7 KB

2683

Another three minute MT4 disconnect with no router issues on my end (it’s got to be an issue on the brokers server) and here are the 1m chart gaps. This happened fairly frequently with FinFX and seems to be an issue for Tallinex too.

048.jpg700×308 48.2 KB

2684

At this point the only thing I’m mildly annoyed about is I still haven’t received any info from Tallinex about my back office access. Hopefully soon enough. The account transfer was fairly pain free.