New to Forex, US-based, broker-related question

#1

G’day folks!

I’m an Aussie expat who is long-term located in the USA. I’m making my headway through the educational materials and when it came to choose brokers, it seems every place I look I’m being recommended to NOT use a US-based or US-regulated Forex broker.

As a beginner who’ll be opening some demo accounts, I’d like to ask … why? And more importantly … will it make a difference to anything I’ll be doing starting out?

#2

Check out TDAmeritrade. Their ToS platform is the best (IMO), and, you’ll have access to more than just FX. Futures, Equities, Options, etc…

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#3

What are they actually saying? Why is it bad? Maybe the limited leverage? Account size minimums?

Those are the only things that comes to mind.

In the US, you’re limited to IG, Gain (Forex.com) TDA and Oanda I believe. Interactive Brokers maybe, not sure if they’re taking retail clients.

#4

That recommendations are may be cuz of their limitations. Leverage, assets who knows what else. Nowadays you can use every broker you like, no matter where you from. Choose, test and if everything`s fine then go on.

#5

Cheers and thanks, folks!

I’m in the process of opening a ToS account, delayed due to the holiday weekend, and will probably pull another one when I get a better handle on things - I need MT4 to collaborate with my Dad and the EAs he’s already written once I understand them, and the CustServ rep said ToS doesn’t do that.

#6

Welcome to the forex. Wishing you all the best for your future.

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#7

Are you using MT4 or 5 ? Also why not use your Aussie citizen ship and use an offshore broker

#8

I’ll be using MT4 - and that’s the question I don’t know to answer until I understand why I shouldn’t use a US-based broker. Why offshore? What’s the benefit?

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#9
  1. Leverage is probably the biggest. You usually get more than US based brokers.
  2. Promos - some of those “free bonus for doing X” type things are often not allowed in the US
  3. Tax savings is a benefit for some, but I think this is mainly for non-US folks
  4. Sometimes lower costs to open various real-money accounts
  5. US brokers are highly regulated (that’s why you get less leverage options), and the cost for that regulation is expensive. Some of that could be passed down to the client.

Enjoy!

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#10

THANK YOU. That’s what I was hoping to see.

If those are the major reasons, then I’m totally fine sticking with locals while I work up the experience.

#11

An advantage of trading with a US-regulated retail FX “broker” is fair pricing and order execution. Order execution reporting requirements are stricter and so as a retail trader, if you have an issue, you can file a complaint with the NFA or CFTC and get a resolution. This incentives brokers to behave properly.

Also, they’re required to maintain a certain level of capital to make sure they can cover their liabilities (like when your trade wins).

With an offshore broker, you have to trust that they treat you properly and that they’re adequately capitalized. And if they’re deficient in either, you have no recourse.

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#12

Good move. Once you gain the experience, and maybe feel something is lacking, head elsewhere, potentially to another broker, offshore or not.

#13

Forex trading is not everyone’s cup of tea. Try to focus on improving your skills so that you can become a consistently profitable trader.

#14

Both ToS and MT4 are different trading platforms. You would need to build another EA for ToS if you want to use it. EA written for MT4 won’t work on ToS.

#15

Yes, right. But if you already have an EA for MT4, I am not sure why you want to trade with ToS. As you said you are a beginner, I think you will be better off with MT4. It’s easy to use, simple to customise, and offers great flexibility throughout your trades.

#16

I don’t have the EAs for MT4, my dad does. But yes. ToS is a very different bag of cats.

I’m using it for the paper-trading sandbox and some learning experiences in stock options, so using it for Forex at the same time seemed like a good idea.

:sweat:

#17

Choosing a trading platform is a trader’s own choice. I too use MT4 quite often but at times, I feel that I need to use a better, feature-rich trading platform that can work as per my requirements. Thanks to my brokers (ICM and Turnkeyforex), I can use different trading platforms whenever I want to. ICM offers ctrader and turnkeyforex acttrader besides MT4, so that’s a good flexibility to have. It’s good to specialise using different platforms so that when one doesn’t work for you, you can go for another one.

#18

You can always open a demo account to see if the broker is any good for you.

And don’t worry about it so much or you’ll end up getting confused. Just stick to the reputed platforms.

#19

I am living in US too and I am using an offshore brokers because there are certain trading restrictions with the local ones like limited leverage, FIFO rule, hedging not allowed etc. Offshore brokers offer flexible trading conditions that are helpful for a profitable trading.

#20

You can trade with a broker that provides a competitive trading environment and has suitable trading conditions.