Yup, plenty of people do that, for the access to options trading as well. Good stuff.
There are multiple reasons why US clients prefer offshore brokers over US regulated broker.
- Min deposit fees: If you are a newbie, then I am sure you will not be putting too much money in trading to start with. Offshore brokers normally have a min deposit fees of $5 or $10 while regulated ones have higher requirement.
- Leverage: US regulated brokers cannot provide high leverage to US clients while offshore brokers provide leverage of 500-1000X.
- Inactivity fees: Since there is tough competition in offshore market, most offshore brokers do not charge inactivity fees while most regulated brokers charge high inactivity fees.
- Commission: This is a major point. Being regulated brings with it lots of costs. Regulated brokers charge high commission on trades while offshore brokers charge peanuts and hence we end up making more profits with offshore brokers.
- Trading Restrictions: US regulated brokers have lot of trading restrictions while that is not the case with offshore brokers.
That said, I am currently holding accounts with both IG and Turnkey forex. Former is the US regulated broker while latter is an offshore broker.
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I don’t think that recommendations always go well in the forex market. It is all about finding the right kind of stuff that works for you. If it does, that’s what matters only. Other things are temporary and can be avoided. As far as it is about finding the right broker, go for the one that you think will go well with your trading needs.
The reason why you are being recommended not to use US based broker is bacause US based brokers do not provide high leverage. At the same time, they charge very high commission. You can get better services, higher leverage and lower commission if you look at brokers outside US. Infact I prefer offshore brokers because they allow me to use any trading strategy like scalping, hedging as well as use of EAs. Currently I am using Turnkey forex. You can open a demo account with them which is free of cost and check their platform. Their chat support is really quick and prompt. You can even request a call from them in case you need any assistance. But you can definitely look at other offshore brokers too. Just make sure that the broker is reliable and trustworthy.
They’re good to get you started. Once you actually do that, you learn a bit more about your trading needs. i think it’s still better to get opinions from places like here, rather than just blindly jumping in, especially if you’re completely new.
Choosing a right broker is undoubtedly the most important decision in trading and it acts as the base where entire building is built. So, yes it will make a huge difference. Since you are starting, you can try [removed for Forums violation], XTB and Oanda. I have used them personally & I strongly recommend them for being the most client friendly brokers in the market.
You guys must really love Coinexx. You both mention them in every other post you make it seems.
Stick with a US broker to start. You probably don’t need to trade leverage starting out anyway, so that’s not something you need to look for in a broker. Get used to mechanics, demo trade for a long while, and then move off shore if you really see a benefit.
When you’re so new to trading, like most have stated, it’s vital you test the waters to find out what works best for you. The first thing you can look for in a broker is reliability and stability which you will find with regulated brokers. They operate in strict regulatory environments with strong oversight. Another thing to always look for is whether the broker is cost-effective. Are you getting the same valued experience and benefits in comparison to your investments? There’s no easy way to say that besides trying it first-hand while inevitably learning how to trade forex. FOREX.com offers demo accounts for this very reason. With access to easy-to-use platforms, you would get the chance to learn how to trade with over 80 different currency pairs and spot metals.