Its going to take a lot of banking de-regulation, like the “know your client” etc, don’t expect 1:500
anytime soon, if ever…I really don’t think Trump is going to do 1/100th of what he said, he is literally
just the armor-piercing tip of a Pence payload, ie, traditional incompetent do-nothing Republican
(read, “UniParty”) election.
Edit: to provide additional salt, lol
“No ‘salt’ taken.” 
As I’ve said before, I am not a fan of politics at all. I don’t get “fanatical” about any politician. I think it was the poster above me who was excited about the potential for leverage being increased with US brokers if Dodd / Frank was dismantled. All I’ve been hoping for is for the “choice” between US brokers or off-brokers to be returned to us.
And I do like your quote: “just the armor-piercing tip of a Pence payload”. 
That’s a great analogy. lol
I checked the list and didn’t see this broker on it. It looks like they accept US clients.
Dear friends.
Please, be informed that Adamant Finance accepts traders from US and Canada.
We would be pleased to see you among our clients. Enjoy the high quality service that we offer to all our traders.
Contacts
Adamant Finance Ltd. IBCN: 22879 IBC 2015
The Jaycees Bulding, Stoney Ground,Kingstown, St. Vincent and the Grenadines
Official site: Forex broker Adamant Finance, a true ECN broker, no transactions rejected!
That is interesting… the address is the same building that Tallinex uses for money wire transfers.
Easy killer I dont think it will be that simple. Trumps plan in deregulation is that it would bring money back into the country not out. By the deregulation of banking it would make going offshore pointless as the brokers in the USA will be able to compete with the rest of the world again.
I think you may have misinterpreted what I wrote to be spewing with venom, when actually, it was not. In fact, I’m almost certain of it, due to your use of the word “killer”. I never said it would be “simple”… never even implied it. I calmly stated what my ultimate “hope” would be for retail traders… the freedom to choose which brokers we would like to work with. And yes, I realize that such changes take time. 
It was recently suggested that traders should post templates for contacting their US Senators or Representatives about the CFTC/broker situation. An abbreviated copy of my email to my Senator is below. Perhaps it is too opinionated but I think that it is time to do something since the offshore broker list continues to shrink and now is down to 10 and headed to 0. Please comment if you feel that others should not use certain parts of it or if you like it. Thanks to Clint from whom I borrowed a few lines.
Dear Senator _______,
I am a cash foreign currency (or forex) trader and U.S. forex traders have been impacted a great deal by the CFTC, the NFA and in a few cases by the SEC since the Dodd Frank bill was enacted. I have no complaint about a specific incident but am unhappy with most of the restrictive actions by the Obama CFTC using the powers given by Dodd Frank, etc. with regards to available brokers, leverage etc. I personally feel that forex is being targeted specifically which helps US futures exchanges and brokers and US Stock exchanges. The Obama administration for instance has enforced transgender bathrooms but allows “sanctuary cities” to harbor illegal aliens. However I appreciate the work of the CFTC against futures or forex brokers, etc. who swindle traders.
The CFTC has reduced leverage available to traders to 50:1 compared to the 200:1 which was available here before 2008 and is still available in most other countries along with 500:1 or higher in some cases. It has been stated that currency prices don’t move as much as other tradeables such as commodities or stock indexes and thus higher leverage is used to make them profitable to trade. Traders are important since they add liquidity or volume to the marketplace and help facilitate transactions between banks and other participants in foreign exchange.
The CFTC has instituted a rule called FIFO (First In First Out) which makes no sense to anyone. This rule requires that if you place a buy trade in a currency pair and after the price rises if you buy another lot and price goes down you must get out of your First (profitable) trade BEFORE exiting the recent trade which is now losing money or vice versa for a sell trade; this just seems devious and other countries don’t have to put up with it.
The CFTC prohibits hedging which as defined in forex is to place both a buy trade and a sell trade in the same currency pair at the same time. The reason given for this restriction is basically that some traders are being taken advantage of by being convinced to do this. This is a strategy used to make money for instance when a temporary down move is expected during a buy trade which the trader doesn’t want to exit since an upturn is expected soon; so a sell trade can be added to make a profit during the temporary downmove without exiting the buy trade. Also some automated strategies will have both buys and sells in place as the market makes routine moves up and down. This type of hedging is perhaps more difficult to do in the competing futures and stock markets.
The U.S. government requires U.S. residents to report foreign based accounts which we hold but they cannot prevent us from having those accounts if foreign banks or brokers offer us accounts but they are often pressured by the CFTC overreach not to offer accounts to Americans. Likewise, of course, the American regulator the CFTC has no authority over foreign brokers who operate entirely outside the U.S. And under current law, the CFTC has no authority over individual traders who trade through foreign brokers that are beyond the reach of U.S. regulation. The CFTC however has implemented agreements with many foreign governments known as Memoranda of Understanding. These agreements have effectively extended U.S. regulation to cover U.S. residents doing business in countries which have signed the agreements.
There still are countries where these agreements do not (yet) exist but of course pressure is still exerted through the CFTC overreach. And there are a few offshore brokers, in Memorandum countries, who have the courage to defy the over-reaching U.S. regulatory authorities, and welcome U.S. residents as clients.
The CFTC has stated that any forex broker offering accounts to Americans must register with the CFTC and offer accounts to Americans only under the restricted leverage, no hedging, FIFO, etc. even if the broker is based overseas and has no offices in the USA. This makes no more sense than the U.S. Dept. of Transportation ruling that Americans driving anywhere including England must drive on the right side of the road!! But bureaucrats don’t have to make sense they just have to get appointed.
There are about 5 U.S. forex brokers which offer accounts to Americans under the restrictions some of which I have listed above. There about 10 brokers outside the U.S. which still offer account to U.S. traders and the list is shrinking. There are about 163 brokers which are available to the rest of the world which are unavailable to Americans because of the CFTC/NFA/SEC.
I think that the CFTC/NFA should get down to regulating and not going after offshore brokers who are not regulated by the CFTC or intimidated by their attempted overreach and offer accounts to US citizens who can legally put their money in any international account as long as they report income to the IRS and pay taxes and report offshore holdings in excess of $10,000 to the U.S. Treasury dept.
This is like the U.S. Joint Chiefs of Staff stopping Americans from joining the French Foreign Legion because they may be killed. Of course they may be killed they are soldiers for crying outloud. Forex traders may lose money but need the advantages offered by brokers abroad who are not restricted by the CFTC.
For instance we should be able to use German brokers as we could in the past who are under German regulations not the CFTC’s; it is like the government preventing us from buying German cars because we might get killed in a car wreck. I don’t think CFTC regulators are any smarter than German regulators or Swiss regulators, etc. but the Germans and Swiss don’t have a large futures industry. The large Swiss forex broker Dukascopy has a Trader of the Month award; in the past it has gone to former U.S. President Bill Clinton, Russian President Vladimir Putin, former U.N. Secretary-General Kofi Annan and French actor Gerard Depardieu. But just like me President Clinton cannot go online and open a Dukascopy account now.
Former CFTC member Democrat Sharon Bowen has described forex traders as “mom and pop investors” who are at risk of losing their money. They are not investors but are in the business of speculation which is the assumption of risk. Trading is a zero sum game; someone wins and someone loses. CFTC required disclaimers alert people to this. It is not like buying 100 shares of Apple stock and checking the price weekly.
There is a low success rate in futures trading as well as in forex trading but the CFTC is going after the forex industry which has advantages over the futures market. It is possible to have a lock limit in futures trading at the Chicago Mercantile Exchange when the price moves the daily limit but traders are not permitted to exit a trade; this may go on for days. I can see why the futures industry would be alarmed by competitors such as forex who do not have this disadvantage. Also I find forex trading much more user friendly and easy to enter and there is a global presence of forex traders online working together to become more knowledgeable. I notice that futures traders are not called mom and pop investors to justify regulation. Losing traders learn the business or get out.
The Japanese leader compares the global economy now with that of the pre-Lehman 2008 bankruptcy crisis; a credit collapse is predicted by writer Bill Bonner; a loss of the USD reserve currency status is predicted by Porter Stansberry and retired U.S. Congressman Ron Paul; this is the life of a speculator; we have to trade around the news events or with them which is a different trading style; we are not mom and pop investors and we don’t want our tax money which we must pay to be used by the CFTC/NFA to take away our tools in the meantime.
Senator I hope that you can prevent the CFTC from being one of the agencies which impose more unwanted stringent regulations during the last two months of the outgoing administration which often happens.
I see it as no accident that the world’s harshest forex regulation is found in the same country with the world’s largest futures exchanges and brokers; this I think is the motive behind what we see from the regulators; I have read that there is a revolving door between the futures exchanges/brokers and the CFTC; I have been a futures trader in the past and may be again in the future but I feel that the futures industry does not intend to take a back seat to anyone including the forex market which had been taking business from them for some time. Competition will occur but let’s not use the bureaucracy for this.
Does anyone know anything about what is going on with TradersWay? I know that they do no longer accept incoming wires from US clients. I also know that it took a particular US client two weeks to get his withdrawal, he was repeatedly fobbed off, then told he was “head of the queue” etc. Is it possible they have cash flow problems? In which case, whatever happened to client funds segregation… I am asking here as no information was forthcoming from TW, even from Joe Carney, who is normally very helpful. Our group have now all managed to withdraw their funds, and we are looking for an alternative offshore broker.
Another question, Joe Carney himself suggested the American move to FXChoice. However, it appears that client funds reside in Piraeus Bank, a Greek bank, though admittedly they use the Bulgarian arm. Cannot say this fills me with confidence; and I suspect many of our clients would not wish their funds to be in the hands of a Greek bank!
Can anyone confirm that they do indeed use this bank?
I know someone who is an introducing broker for TradersWay and he states that he is having none of the issues that you list in your posts.
TW all well. I funded them I think with CC last month. Still trading with 1000:1
Yep, I third that. No issues at all and I have withdrawn a few times in the past two months, with the latest one being just last week. Anytime I have seen complaints about withdrawals it has been the customer’s fault, impatience or lack of communication. I would just personally just ask the broker directly instead of potentially scaring others who have money with them with posts that sound more like a game of “telephone” (aka Chinese Whispers).
Have you found you can still send funds by wire?
I have not deposited by wire transfer with them at all but I did withdraw by using a wire transfer recently and there was no issue with it. I was considering trying [B]FXChoice[/B] and I see they allow wire transfers for deposit so that is probably why [B]Trader’s Way[/B] suggested to try them out.
[B]ForexBrokerInc[/B] as I previously posted was looking like it was acting as an IB for [B]FXChoice[/B]. Now if you go to their website here you will see that they also have added [B]XM[/B] and [B]PaxForex[/B] to their website. I think it is safe to say that they decided to stop all operations and just act as an IB service.
They have always been inclined to slap an American Flag right on their website, and they have done so now They once had a page with a US flag that was dedicated toward stating how and why they accept US clients.
Nothing is ever that simple, but it will be interesting to see what (if anything happens) with DoddFrank. All eyes on that.
Hi Guys,
[EDIT: PLEASE DO NOT QUOTE THIS POST IN ITS ENTIRETY,
SINCE IT IS LONG]
The quoted contents of this post are not from me but, I agree with
most of the claims in it, and suspect most readers of this thread would also…
The subject was: “FW: How Trump can make billions for America Inc. with no risk, and support the US Dollar”
I RECEIVED THIS AS A SPAM EMAIL, and have deleted any elements
which advertise an EA. Also, I’m just going to post it, and not get
involved commenting on any of the points. As far as I know, the
claims are “anonymous” so please take it “as is” with no further
comment from me.
Trump’s transition team announced the repealing of Dodd-Frank (LOUD CHEERING).
This ‘Dodd-Frank’ act is a cancer, it has been eating away at the financial industry
and the entire economy, like a wrecking ball smashing what was left of the economy
after the housing crash.
One of the abused children of this damage (there were many) was the Currency market,
or FOREX. We will here elaborate on key points here for the Trump Administration
which no doubt the market will agree with.
Dodd-Frank is a giant Octopus with 15,000 rules and 20,000 + pages – there’s probably
not a single human being on the planet who has read and understands the entire ‘law’.
We will elaborate here on a very specific part of Dodd-Frank, all that pertains
to FOREX.
List of steps to take to reform Dodd-Frank by reversing FOREX specific rules, that
will boost markets, increase profits, reduce volatility, save on costs & fees, and
bring money back to USA:
1) Delete the FIFO rule. FOREX is not futures. There’s absolutely no utility to
FIFO as it pertains to FX. Some algorithmic traders may have 100, 200, or 300 orders
on an account. Exiting positions in the exact manner that they were entered, in
such situation, is impossible. Why should any trader have to exit positions in the
same order as they were entered? (Use the Hotel analogy, Trump owns 12 hotels, some
are profitable some not – why should Trump sell the 1st hotel built – and not just
the 3 losers?)
2) Increase the leverage. Increased leverage IS NOT correlated to increased risk.
The regulators force members to say that an increase in leverage is an increase
in risk. This is mathematically and logically incorrect. Increase in leverage MAY
increase risk, however it is NOT CORRELATED. For example, if your use of the leverage
is for hedging purposes, in this scenario, increased leverage DECREASES risk. There
are few hedging possibilities for multi-nationals in USA (such as vanilla options),
Spot FX remains the only hedging option for many small businesses. This may be as
simple as opening an Oanda account and taking opposite positions against accounts
receivable. In such a scenario, the profit or loss from such a position is a wash
against the real business money flows, in which case, a high amount of leverage can
be useful. The decrease in leverage was a knee-jerk reaction to quell the rampant
fraud, but the real effect was simply that back alley dicers as we call them in FX,
simply moved their accounts to London. The decrease in leverage has no economic
benefit, doesn’t serve any purpose other than forcing billions of dollars outside
of USA. The argument that 500:1 leverage is for gamblers is very weak, these people
don’t understand FX. In the stock market it might be ridiculous, however FX doesn’t
move that much. In a typical week the EUR/USD may move 1% or 2% – in extreme cases
up to 5%, such as during Brexit when the GBP/USD moved 9%. Compared to any other
market, this is very small. The brightest example provided by Google (GOOG) which
is up 1,415.39% since IPO. This is an impossibility in FX – if the EUR/USD is up
50% in a year, it will likely be down 50% the next. Currencies have a tendency to
revert to the mean, and even when they trend, the changes are slight on a percentage
basis. For this reason, if a small degree of leverage was used as in stocks, it
would be impossible to ever turn a profit by trading FX. And, incidentally, increased
leverage will support the Fed’s QE program as Liquidity Providers (LPs) extend credit
to US Dollar markets they are effectively creating credit. The current leverage
policy on FX is contrary to the Fed’s QE program.
3) Delete the Hedging rule. The most ridiculous of all rules is the so called ‘hedging’
rule that prohibits being long & short the same currency on the same account. Regulators
claim it’s a good rule because if you are long and short you are effectively flat,
but it charges a fee (the spread) and thus, the rule saves money to customers. This
is warped and twisted thinking, incoherent and not based on reality – similar to
their statement that “Foreign Futures is Forex” – no, Foreign Futures are Foreign
Futures. FOREX is Foreign Exchange of currencies, or spot trading, and NOT futures.
FOREX is always traded ‘off-exchange’ by the nature of what it is. FOREX is a banking
market, traded by interbank FOREX dealers – not on a futures exchange like the CME.
What traders mostly complain about this rule – if someone wants to hedge, why not
let them? If the brokers EXPLAIN to customers this flawed logic, that’s one thing
– that’s acceptable. Make customers tick a box that they understand the potential
for unnecessary costs- but allow them to do it! Because practically, when trading
FOREX, you need hedging. This rule simply forced many strategies to stop working
completely, or move overseas.
4) Bring back the PAMM. PAMM stands for Percent Allocation Management Module. PAMM
is the FOREX equivalent of a futures ‘block account.’ The problem is for Forex managers,
trading many client accounts as one. It’s a simple solution – independent software
combines many small accounts into one ‘master’ account, which enables the manager
to trade one account vs. hundreds or thousands of individual accounts.
5) Reduce the net-cap for RFEDS to a reasonable $5 Million if they are STP (Agent
only). FXCM, Oanda, and Gain Capital have a Monopoly on retail FX. And, even though
FXCM has been under DOJ investigation, hundreds of client lawsuits, countless fines
from the CFTC, NFA, and other regulatory bodies, hundreds upon hundreds of customer
complaints; they continue to be one of the few options for retail traders which practically,
is no option. The chances of making money at FXCM are slim to none, as they say
in FX you have 2 hopes; no hope and Bob Hope. FXCM takes screwing the customer to
a ‘new fangled art form’
6) Allow Broker Dealers to offer FX. The NFA is no more an FX regulator than FINRA.
FX should be regulated on a banking level, perhaps by the Fed. It was thought that
currencies are financial commodities, and since FX futures were already offered at
the CME, the CFTC seemed to be the natural regulator for FX. A currency is not a
security, but it does meet the definition of a security if you invest in it. Although
the IRS considers investment in foreign currency as debt under some rules; some investors
will place their funds in a currency with the intent of appreciation of capital.
Or to put it differently, they are afraid of the deterioration of value of their
domestic functional currency. This was obvious before “Brexit” when lines formed
outside of banks from customers who wanted to exchange their British Pounds for US
Dollars, Euros, and Swiss Francs. In any case, the securities business is in many
aspects far more complex than commodities. Securities brokers, broker dealers, and
other FINRA licensed organizations are also under far greater scrutiny, have higher
costs of compliance, have more compliance related staff, etc. Why keep their noses
out of the feeding trough?
7) Stop intimidating foreign brokers through FATCA. There isn’t any law that strictly
prohibits a retail US Citizen from opening a foreign FX account. However, since
many larger institutions in general are afraid they will be “Swissed” hitman style
by goons as described in Confessions of an Economic Hitman, they simply do not allow
US Citizens to open accounts. US Citizens have become persona non-grata in the FX
world. US Citizens can’t even visit their websites. In order to allow the foreign
brokers to fairly compete with new US broker upstarts, this practice should be stopped.
If the tax code is to be overhauled, visit FATCA and specifically, make FATCA reporting
easy and simple; most importantly for institutions. TD Ameritrade doesn’t whine
and complain about issuing 1099s at the end of the year – it’s mostly automated.
It’s been “Turbo Taxed” by accounting departments. It should be just as easy for
foreign institutions to report US citizen taxpayer obligations. Oh and by the way
– this will also stop foreign non-reporting of income, which previously was a big
black hole!
Practically, the majority of rules apply only to retail investors which in today’s
environment, means 99% of the population. The rules don’t apply to the one percenters
or in FOREX LINGO QEPs, ECPs. Leverage still applies, but ECPs can easily open accounts
in London, Singapore, and Sydney legally and circumvent all these rules which are
guaranteed to choke any strategy.
Why did Dodd-Frank make all these silly rules?
The reasoning was, that because FX frauds used these tools, they should be eliminated.
But this is severely flawed logic that would never work in the real world – that
would be like saying, let’s bomb a village because one or two criminals live there.
Dodd-Frank and the climate in general cleaned up a lot of the fraud – thank you.
Now the fraud is gone. But instead of harassing legitimate traders and investors,
regulators should invest in fraud prevention tools. The list here can be very long.
Some suggestions:
A managed reporting system such as the NFA uses for RFEDs like FORTRESS but for CTAs,
Hedge Funds, and other CPOs who choose to participate in the verified reporting system.
Sites such as myfxbook.com and fxblue.com provide this service technically to traders
– but there is no auditing function. One of the largest frauds has to do with financial
reporting, more specifically, the misreporting of performance numbers. The solution
is very simple – a centralized reporting system that automatically captures performance
data (there are only so many trading venues) and ‘verifies’ these numbers are true
and accurate, and also can return statistics such as peak to valley draw downs, etc.
Each product can have an ID, similar to an NFA ID, where investors can check in
an official database, which is secured and encrypted, all the numbers. Building
such a system is extremely cost effective, it would reduce regulatory costs as well,
reduce fraud, and boost investor confidence. In fact, it would cause foreigners
to invest in USA. Something like this doesn’t exist in Europe. Let’s bring that
money into USA, support our markets, support the economy. Wall St. and Chicago should
be the trading centers of the world – not London. What happened to the American
Revolution, that 200 years later we’ll regulate and tax our financial businesses
out of America and back to the British? WTF
What would be the effect on the markets if these suggested changes were implemented?
1) There would be competition in retail FX – this would make trading better, as competition
in any market does. There was competition in the US before Dodd-Frank and in the
legitimate FX world (discounting the fraud) there were many legitimate companies
that had a good offering.
2) Billions of dollars would flow back to USA to be held by institutions in New York,
Chicago, Charlotte, Los Angeles, and others.
3) Instead of a new growth industry of algorithmic FX taking off in foreign countries,
it would happen right here at home in Charlotte, Chicago, New York, San Francisco,
Atlanta, and in other trading centers.
4) Stabilization of FX markets in general; this will be nebulous to quantify, however
it’s not difficult to surmise, that if there is more competition, more volume, and
less fees – that the FX market will be more stable. Because the US Dollar is the
world’s reserve currency – that’s really important! Also, it is critical that the
United States take a global role in administrating FX markets, because of the USD
world reserve status.
I used Windows “Notepad++” (not Notepad) replace function, selecting regexp (regular expression)
mode to insert the hard line breaks as follows:
Find: (?<=.{80})\s
Replace: $0
REMEMBER this was received as a spam email, but I thought it
would be a useful post in favor of easing of regulations on Forex.
hyperscalper
.
You may have seen this NEWS ITEM from [I]Finance Magnates[/I] —
CySEC Temporarily Suspends CIF License of FXFINPRO Capital
Do not confuse this Cyprus broker with Finpro Trading (UK), one of the brokers in Group 1 of our List.
FXFINPRO Capital (Cyprus) is owned and operated by PFX Financial Professionals Ltd (Cyprus)
Finpro Trading (UK), our Group 1 broker, is owned and operated by Finvasia Group.
.
Hello everyone. I have been reading a large portion of this thread and have enjoyed it thoroughly. However, even after digesting a lot of the information presented here, I have a few questions about taxation.
I understand that forex can be taxed under Section 988 or Section 1256 based on an election that you can internally do. I also understand that the FBAR form, now called the FinCEN Report 114, should only be filed in the total amount of foreign assets that you own is above $10,000 at any point during the tax year.
My current situation (the one that I will be using for the 2016 tax year) is Section 988. I have a SMALL tax loss and I just wanted to ask whether or not there is anything special that should be included in a tax return that includes trades from a foreign forex broker?
Do statements need to be sent to the IRS? Do you have to provide any other type of evidence? Do you simply write in the loss on an aggregate tax year basis and that is all?
I would really appreciate insight into the preparation of tax documents for foreign forex brokers.
Thank you all and anyone that wants to answer is more than welcome
Just save a digital copy and also a printed version of your trading account statements for the year by downloading them from the PC version of the Metatrader platform and keep them filed in the event of an audit. If you do your taxes with a CPA, then provide him copies. If you do TurboTax or similar, keep them for around 7 years or so until the statute of limitations for audits passes. I have not provided any proof and I was profitable last year. I simply entered the amount I made less commissions/swaps and paid my taxes. Should be the same for your loss that you are claiming.
Thank you for the helpful information. Just wanted to ask the following to be sure: The process you explained above would be the same regardless of whether you have a foreign broker of not right?
In essence, under section 988 you will always like the aggregate income/loss regardless of whether you have a domestic or foreign account. The only thing that is different about foreign accounts is the FBAR, which is only important if assets in that year ever went over the $10K mark. Am I correct in assuming these points?
Thank you again for the comments.