Going offshore to escape the CFTC

[Shatners_Last_Stand]

…minimal sacrificial dignity of personal identification and documents as I despise giving away personal info over the internet, and a future that doesn’t seem to be in danger for my security.

You might want to consider Profiforex. They offer the MT4 “cent” accounts, which in my opinion are a great way to get the feel of real trading with negligible risk. Also, they did not ask for any scanned ID documents (but reserve the right to request them). What I’m not sure about though is whether they still offer Paypal to new clients. They don’t advertise it on their home page, but I can still add/withdraw with Paypal from the personal area.

[U]Added[/U]: Ok, I’m backtracking a little too, based on last two posts…
When you say “noob” FOREX trader, I’m assuming you already have some investing experience and success maybe in the equities world? Or perhaps you own some physical gold/silver, and during this last big sell off found yourself wishing you had a better way to hedge your investment? If so, you will really appreciate what these overseas FOREX brokers have to offer, which is not just currencies, but a suite of OTC derivatives which can be used to further diversify your portfolio, gain access to Asian and European trading sessions, and reduce risk.

Another thing overseas brokers uniquely offer are the multi-spread currency indexes. I mention them because novice traders may find them more intuitive in helping to visualize the underlying currency trends. For example, FXCM-UK offers the DJFXCM Dollar Index, which is an equal weighted index of the US Dollar against the Yen, Euro, Pound, and Aussie Dollar. FXCM said a long time ago they would offer this index for trading in the USA once they got regulatory approval. Guess that never happened. Lite Forex takes things a step further and offers “Total Forex” currency indexes for each of the 8 major currencies as an equal weighted basket against the other major currencies. Note: you can download the LiteForex demo to see these indexes on MT4. I also found them on the informational website below:

Currency index

[10pipseveryday]

Have any of list 1 forex providers been recommended by established babypip members?

I want to start with a small account for example $100-500 trade this for a year then withdraw and deposit into my current Oanda account after paying taxes on money earned. Why you ask well it would jump start the equity in my slow and steady regulated. Basically I’d like to gamble with leverage on a small amount of money so it wouldn’t matter if the account were to go bust.

Can anyone vouch for a off shore broker?

[foretradex]

In my opinion, you should absolutely start with a U.S. broker.

The process of evaluating brokers and choosing one is called “due diligence”. Due diligence is tricky enough when you’re dealing with brokers in your own country; it’s even trickier (in many cases) when you are trying to evaluate offshore brokers in various foreign countries.

As an “absolute noob”, you already have enough on your plate at this stage, without adding unnecessary complications to your task. Any of the largest U.S. brokers will serve to get you started in this business. And you may find that you are completely satisfied with your U.S. broker, and see no need to look offshore. Offshore is not for everyone.

If, at some time in the future, you decide to take your forex trading offshore, you can continue to maintain accounts with your U.S. broker(s). It’s not an either/or situation. I started out with FXCM over 7 years ago, and have maintained my FXCM accounts throughout that period, despite all my involvement with offshore brokers.

And one final point: The reasons for going offshore really do not yet apply to you, at this early stage in your forex career. Initially, the CFTC’s restrictions on leverage, FIFO, and hedging should not be deal-breakers for you. Those restrictions might annoy you — as manifestations of the Nanny State in action — but the actual impact of those restrictions on your trading during your first year or two will likely be minimal, and will not justify the effort and/or the risk involved in going offshore.

You have a huge learning-curve in front of you. Take first things first. Learn the basics of the forex market, master the platform and charts of a good U.S. broker with whom you are comfortable, and learn how to trade profitably and consistently. Then, later, if you feel some compelling reason to jump ship and move your trading offshore, you’ll be much better qualified to make that decision.

I appreciate your response, thanks a lot. Makes sense after all, start slow and look ahead when the time is right. Now off to find the best broker not in terms of stats, minimums or what not, but on trust and complete withdrawal control.
“as manifestations of the Nanny State in action”, no kidding.

[foretradex]

Foretradex, Clint has excellent advice, and what he has said in his last comment may be superior to what I advise.

This is my advice:

Many to most offshore brokers offer gold, Dow Jones, oil trading, and a very few even offer individual stock trading, with much higher leverage, that U.S. brokers are unable to provide thanks to what some people might describe as Obama’s economy strangling Dodd-Frank people and the selfish, monopolistic bullying and Congressional lobbying of U.S. stock brokerages. So, I recommend “diving in” immediately with foreign brokers as well as with domestic brokers to see which ones suit you best, with of course a very small amount of money at first, like 10 to 20 bucks. You can register to open a demo account with Paxforex, for example, getting on their email list, and you will then be regularly updated on their own trading results that uses a strategy (longer term using daily charts, for example) that they explain, which I assume is honest. Compounding their profits before taxes and tithes, which they may not even pay, I estimate Paxforex is earning 30 to 45% on their money every 2 months, which is fantastic for a large amount of money. I could be wrong about that return, though. I do not at this time trade with Paxforex, however. In my opinion, foreign brokers are able to “run circles” around domestic brokers due to competition, which is highly limited and restricted in the special interests dominated, plutocratic U.S., concerning the financial markets.

If you read books by trading wizards that made a lot of money fast, you will find that most of them recommend simply to do your own research to find a good money making strategy. Just by staring at certain currency, oil, gold, and stock 5 minute sharts long enough, you can see money making opportunities. “Monkey see, monkey grab” is a good way to describe a lot of trading. I think currency trading, especially, is 99.99 percent self discipline and self control, and .01% knowledge. I think 200 to 1 leverage Fxchoice is a good offshore broker, and 50 to 1 leverage FXCM is the best U.S. broker, especially if you have 50 million dollars to trade at FXCM (chuckle).

You might want to consider Profiforex. They offer the MT4 “cent” accounts, which in my opinion are a great way to get the feel of real trading with negligible risk. Also, they did not ask for any scanned ID documents (but reserve the right to request them). What I’m not sure about though is whether they still offer Paypal to new clients. They don’t advertise it on their home page, but I can still add/withdraw with Paypal from the personal area.

[U]Added[/U]: Ok, I’m backtracking a little too, based on last two posts…
When you say “noob” FOREX trader, I’m assuming you already have some investing experience and success maybe in the equities world? Or perhaps you own some physical gold/silver, and during this last big sell off found yourself wishing you had a better way to hedge your investment? If so, you will really appreciate what these overseas FOREX brokers have to offer, which is not just currencies, but a suite of OTC derivatives which can be used to further diversify your portfolio, gain access to Asian and European trading sessions, and reduce risk.

Another thing overseas brokers uniquely offer are the multi-spread currency indexes. I mention them because novice traders may find them more intuitive in helping to visualize the underlying currency trends. For example, FXCM-UK offers the DJFXCM Dollar Index, which is an equal weighted index of the US Dollar against the Yen, Euro, Pound, and Aussie Dollar. FXCM said a long time ago they would offer this index for trading in the USA once they got regulatory approval. Guess that never happened. Lite Forex takes things a step further and offers “Total Forex” currency indexes for each of the 8 major currencies as an equal weighted basket against the other major currencies. Note: you can download the LiteForex demo to see these indexes on MT4.

Wow, great info guys, much appreciated. Will look into the mentioned brokers and search a bit more.

[pipcompounder]

Have any of list 1 forex providers been recommended by established babypip members?

I want to start with a small account for example $100-500 trade this for a year then withdraw and deposit into my current Oanda account after paying taxes on money earned. Why you ask well it would jump start the equity in my slow and steady regulated. Basically I’d like to gamble with leverage on a small amount of money so it wouldn’t matter if the account were to go bust.

Can anyone vouch for a off shore broker?

I still have no complaints about Finfx.

[Liya]

You might want to consider Profiforex. They offer the MT4 “cent” accounts, which in my opinion are a great way to get the feel of real trading with negligible risk. Also, they did not ask for any scanned ID documents (but reserve the right to request them). What I’m not sure about though is whether they still offer Paypal to new clients. They don’t advertise it on their home page, but I can still add/withdraw with Paypal from the personal area.

I looked through their website just now and I absolutely agree with this. Worth trying. I am opening a “cent” account there with $100 deposit and will inform you how my trading goes.

[10pipseveryday]

Thank you pip. I’ll check into them.

[enochbenjamin]

You might want to consider Profiforex. They offer the MT4 “cent” accounts, which in my opinion are a great way to get the feel of real trading with negligible risk. Also, they did not ask for any scanned ID documents (but reserve the right to request them). What I’m not sure about though is whether they still offer Paypal to new clients. They don’t advertise it on their home page, but I can still add/withdraw with Paypal from the personal area.

I have been trying for over a week to get money into my ProfiForex account - no go. I do not have a paypal account, nor do I want one, so I guess I will not be able to evaluate their services.

This chat transcript from ProfiForex is quite amusing:

[17:32:40] enoch: Good day Alex. I would like to give you guys a try but every card I have tried to use has been declined.
[17:33:11] enoch: I know the cards are good because I then proceeded to make deposits with other brokers. All went thru except with your company.
[B][17:34:54] Alex: Please download and install the new version of the terminal from our website.
[17:35:17] Alex: Profiforex - Forex Market - Download Trading Terminal[/B]

[Shatners_Last_Stand]

I have been trying for over a week to get money into my ProfiForex account - no go. I do not have a paypal account, nor do I want one, so I guess I will not be able to evaluate their services.

This chat transcript from ProfiForex is quite amusing:

[17:32:40] enoch: Good day Alex. I would like to give you guys a try but every card I have tried to use has been declined.
[17:33:11] enoch: I know the cards are good because I then proceeded to make deposits with other brokers. All went thru except with your company.
[B][17:34:54] Alex: Please download and install the new version of the terminal from our website.
[17:35:17] Alex: Profiforex - Forex Market - Download Trading Terminal[/B]

Not sure but the card issues you’re experiencing may be related to that Bush era “anti internet gambling law” which banned U.S. based banks and credit card companies from processing payments related to Internet gambling. Of course we know Profiforex is a FOREX broker not a gambling site, but maybe sometimes FOREX brokers get “blacked out” anyway. I’ve experienced the same thing trying to use Moneybookers. For example, works fine for FinFX but wouldn’t go through for FXChoice. Actually, for a couple of overseas brokers I use digital currency (like Liberty Reserve) for deposits/withdrawals because that’s the only way I can access the funds (besides bank wire).

[compounder]

Thanks, Shatner’s Last Stand, for telling us that you have successfully used Liberty Reserve. If you have used a method other than bank wire directly to Liberty Reserve, exactly what method did you use to add money to your Liberty Reserve account? It seems that the assorted fees pile up pretty fast, especially using Western Union, MoneyGram, etc.

[FxAll]

I entered “PaxForex” in the Babypips “Search” box, and I got 10 pages of results. So, there is a lot to read, if you’re looking for the experiences and opinions of Babypips members.

Discussions about “PaxForex” which have occurred in this thread (“Going offshore…”) are included among the “Search” results.

If the posts appearing on the Babypips “Search” pages do not answer your questions, you will need to do a Google search. Here’s a link — PaxForex reviews - Google Search

As for the brokers listed on pages 1-3 of this thread, links to review sites are not provided for any of them. In each case, there are links only to the broker’s website, and to the broker’s contact info (email or telephone).

Certain “due diligence” information has been included for many of the brokers listed (such as cautions about nationality or regulation), but we have not attempted to provide a comprehensive “review” for any broker in the List. For that, you will need to use the Babypips “Search”, or Google “Search”.

Hi Clint and thank you
Strange, I try babypips searche and google search by your advise, but couldn’t find post, that I saw first time here. Thank you any way.

[TheLastBear]

In my opinion, you should absolutely start with a U.S. broker.

I have to disagree with you on that. There is no point in even bothering with a U.S. broker anymore due to the new regulatory changes. As a matter of fact every U.S. trader should leave their U.S. broker and take their business to a country which does not punish you, over-regulate you and tell you how to manage your portfolio. I do agree that for a newbie those regulatory changes are minuscule, but they should get started with a great place from the start.

[Shatners_Last_Stand]

…what method did you use to add money to your Liberty Reserve account? It seems that the assorted fees pile up pretty fast, especially using Western Union, MoneyGram, etc.

Nothing special. I’ve used a couple of different exchangers off their published list:

Liberty Reserve – largest payment processor and money transfer system. Liberty Reserve serves millions since 2002 - Exchangers

Still a newbie at this, so don’t feel comfortable recommending a specific exchanger. I’ll just say I used one that takes credit cards. They were quick but very expensive. Found another that takes postal money orders. This method turned out to be fairly economical (4% fee plus what post office charged for money order and mailing).

[enochbenjamin]

Yeah spoke to customer support and they informed me that unfortunately they cannot process credit card deposits from the US. They suggested a wire transfer to fund the account.

Not sure but the card issues you’re experiencing may be related to that Bush era “anti internet gambling law” which banned U.S. based banks and credit card companies from processing payments related to Internet gambling. Of course we know Profiforex is a FOREX broker not a gambling site, but maybe sometimes FOREX brokers get “blacked out” anyway. I’ve experienced the same thing trying to use Moneybookers. For example, works fine for FinFX but wouldn’t go through for FXChoice. Actually, for a couple of overseas brokers I use digital currency (like Liberty Reserve) for deposits/withdrawals because that’s the only way I can access the funds (besides bank wire).

[FxAll]

Yeah spoke to customer support and they informed me that unfortunately they cannot process credit card deposits from the US. They suggested a wire transfer to fund the account.

As I’m aware paxforex alows deposits via credit cards form us clients

[enochbenjamin]

Just for clarification, I was referring to PROFIFOREX

Yeah spoke to customer support and they informed me that unfortunately they cannot process credit card deposits from the US. They suggested a wire transfer to fund the account.

[TheLastBear]

As I’m aware paxforex alows deposits via credit cards form us clients

Yes, PaxForex does accept credit cards among a range of other deposit methods.

[BearMarkets]

Hi Clint,

You seem like the top guru when it comes to the CFTC. Do you have any idea how it affects binary options brokers given the vast majority of them are based out of Cyprus, BVI and the Gibraltar like the forex brokers.

Binaries and forex are far different things but I’ve read in so many places now that many binary brokers are due for a tussle with the CFTC. Any thoughts?

[Clint]

Do you have any idea how it [CFTC] affects binary options brokers given the vast majority of them are based out of Cyprus, BVI and the Gibraltar like the forex brokers.

…I’ve read in so many places now that many binary brokers are due for a tussle with the CFTC. Any thoughts?

Good question, BearMarkets. But, I’m the wrong person to ask. I have zero experience with binary options.

I’m aware that there are several threads here on Babypips dealing with binary options, but I don’t follow those threads. So, unfortunately, I can’t suggest who might have the information you’re looking for.

If those threads can’t answer your questions, I guess you’ll have to do a wider search (Bing, Google, whatever).

I keep an eye on Enforcement Press Releases - CFTC, but I’m not aware of any enforcement actions directed at binary options dealers.

Sorry I couldn’t be more help.

(By the way, “guru” I’m not.)

[cams75]

I have to disagree with you on that. There is no point in even bothering with a U.S. broker anymore due to the new regulatory changes. As a matter of fact every U.S. trader should leave their U.S. broker and take their business to a country which does not punish you, over-regulate you and tell you how to manage your portfolio. I do agree that for a newbie those regulatory changes are minuscule, but they should get started with a great place from the start.

This is dribble. I would prefer to have an account with Oanda, FXCM, MB Trading etc than a broker like Paxforex that you seem to be blowing on about all the time on these forums.