I am currently with FXCM, but since the CHF debacle I have been looking around for others to change too.
2 questions have come up…
#1. Is it legal for me as a U.S. resident to open an account with an unregulated offshore broker?
#2. What is the risk of trading with a company not regulated by CFTC/NFA or some other regulatory group?
Greetings
Answer 1: No idea about these type of things as I;m not US resident 
*Answer 2: I’d suggest you to stay with FXCM as they have got lifeline of $300M and I’ve heard that they just dropped their spread or commissions but if you still want to change the broker then off course you should prefer regulated broker for safety of your money. Never ever go to unregulated broker whatever lucrative options they are offering.
Greeting
Yes , its legal to open up an account but since the democrats legislation its made finding a broker that fits your needs a…pain and struggle??? Its the brokers that face legal issues dealing with USA citizens…
hence the number of them is low, compared to other countries worldwide!
The risk is what happens when the company refuses to pay your money out of you account?? who are you going to complain to ??? Regulation means you can take it up with the regulating board.,as well as other matters in regard with the broker?
Just because a broker is not located in the US, doesn’t mean its unregulated. Many times those brokers are safer with your money than US based brokers.
Thanks for the info. I really appreciate it. I have decided to stay with FXCM.
Etrade actually has forex accounts that trade through FXCM. So I can keep the majority of my money in the Etrade account and just transfer funds to my forex account as needed. That way I will actually be making money via a safe investment account on all my money not being used for margin requirements. As well as save me from losing all money if somehow FXCM went bankrupt or somethin
Forex.com, MB Trading, Oanda, IBFX, just a few in the U.S. And you don’t need just one. Open accounts with them all.
As far as regulation goes, forget it. It doesn’t matter. You can lose everything with even a so-called regulated broker. Treat them all as a 3rd party risk to be managed.
I strongly agree with you. You should open several accounts not just one. Regulation should not be your first criteria because they can be misleading. I am yet to know what happens to Alpari Customers. This goes to show that the age of a broker does not mean that it has a solid foundation. The mighty Alpari fell flat and are struggling to rise.
It’s better to choose the top 10 brokers, they have many years of experience with well reputation and regulated. Background survery is important! traders should make research with review sites and feedback but its a good post!
It’s tough for US clients. But atleast you’re not getting 30:1 under FCA 
It’s really just FXCM or Oanda.
I wouldn’t go offshore. There is no safety net, just risk. Considering everything that’s happened to FXCM (Nick Drew fines), I would say Oanda.
Hi @Johnno2626,
In February of 2017, FOREX.com’s parent company, GAIN Capital, acquired FXCM’s US accounts.
As of the latest financial data from the CFTC, we are the largest US retail forex broker by client assets.
Yes, in fact, we’re regulated in the UK by the Financial Conduct Authority (FCA) so any funds you deposit with us are protected for up to £50,000 by the Financial Services Compensation Scheme (FSCS).
The Markets section of our website has information on the spreads for forex, indices, shares, commodities and cryptocurrencies you can trade with FOREX.com.
It’s says your EURUSD spreads are as low as 1.4. Not sure I would call this ‘competitive’.
Thanks for your feedback, @Johnno2626.
Based on the latest data, our typical EUR/USD spread is 1.3 pips and can be as low as 1.1 pips. It’s also worth noting those spreads are all-inclusive meaning we charge no separate commissions on top of the spread*. By contrast some other brokers may show a tighter spread but charge separate commissions.
The great thing about the market is everyone is free to choose what’s best for them. We are not a discount broker and will never be the cheapest. However, when many traders consider all the factors important to them in choosing a broker, they see value in what we offer.
That is why we are currently the #1 FX broker in the US by retail client assets and one of the leading brokers worldwide in retail trading volume according to the latest industry reports.
When it comes to choosing a forex broker, the most important factor is strong regulation. Recently, there have been several discussions on this forum highlighting the dangers of trading with unregulated brokers:
Forex is regulated by government bodies in major financial centers around the world. For traders who live in those major trading centers, it makes sense to focus on brokers regulated in their home country.
Even traders who don’t live in one of those countries should consider brokers regulated in a major financial center appropriate for their region. For example:
In the US, forex is regulated by the CFTC and NFA, and brokers are required to maintain net capital of $20 million.
In the UK, forex trading is regulated by the FCA and funds are protected for up to £50,000 per client by the FSCS.
In Canada, forex trading is regulated by IIROC and funds are protected for up to $1 million per client by the CIPF.
Once traders focus their search on well-regulated brokers appropriate for their region, they can choose from among those regulated brokers by considering on other important factors such as customer service, trading platforms, charting options, educational resources, research and spreads.
*We recently introduced a new Direct Market Access (DMA) account with pricing sourced directly from our liquidity providers and using a spread plus commission pricing model.
I’ve got a question FOREX.com
Is a larger spread (say 1.3 pips) cheaper then a raw spread and commission (0.3 pips + $7 USD commission)?
Which would be cheaper if I am trading 1 lot of CABLE (GBPUSD)?
Can you work out the maths for me in an example?
Thanks FOREX.com
There are major, major risks related to trading with unregulated offshore brokers.
Offshore destinations are famous for its light touch regulation, if any. They are attractive locations to forex and binary options brokers, as it is relatively easy and cost-effective for startups to register and run a brokerage business. Besides, offshore zones are generally known for their lax regulation and non-existent corporate taxes. Also, compared to brokers licensed and overseen by reputable regulators, these zones require very low initial investments from the broker to register them. Vanuatu, for example, requires only $2000. How is a company like that reliable in any shape or form?
There are plenty of non-US brokers that are well-regulated so you have what to choose from, just keep your eyes open and be wary of unregulated offshore companies.
Greetings!
Here are answers for your questions:
As it was said before,
Regulation should not be your first criteria because they can be misleading
This is partly true, but if you check broker for reviews, and official website license there won’t be any problems.
As example, you can check this link for regulated usa brokers.
I don’t think it’s illegal. But not all brokers accept US residents as clients. It depends on brokers’ policies. I would suggest to check this thread from @Clint for US residents and offshore brokers: Going offshore to escape the CFTC It’s quite useful.
Unregulated brokers can change their trading platforms without notice leaving you stranded.
e.g. PROFIFOREX broker.