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

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?

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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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.

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.

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.

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

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

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?

  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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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.

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

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.