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How to choose good forex broker?

 
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babylonwolf

How to choose good forex broker?

Hi everyone, I'm brand new to currency trading and learning now. I'm been trading index options for 5 years and doing well until last august when market experiences extreme volatility. Last night I watched Shawn's video about his new "signal" service for $67/mon, but I know Apiary fund doesn't act like broker, so I'd like to open a live account with a outside broker with my own money while I'm still with Apiary to learn. Hope to earn while learning. I researched some forex brokers, some offers wider spread but no commissions while some charge $0.04 per $1k but with narrow spread.

Can anyone who've been long in this business advise me how to pick up a broker? currently I'm with TD ameritrade for stock and OptionsHouse for options trading (OH doesn't have Forex trading) I appreciate your feedback on this, thanks

Fri, 04/01/2016 - 12:55pm
 
nitroblower

I have the same concern. I am with Interactive Brokers and used to like it a lot until I took more time to analyse how much I was paying in commissions. Their 2$ per transaction is high for a day trader in the Forex if you don't trade standard lots. For a mini lot, that 2$ represents 4 pips in/out for a single trade. So mini lots and 1-min bar charts are pretty out of the game with that kind of commissions.

If anyone could indicate a great FX broker in Canada, I would certainly appreciate.

 
Sokha

FXCM is the best for Forex IMO for multiple time frames analysis. Tradestation is the best for Futures executions with matrix.

 
tonyqiu1971

hi,

I have forex trade account with FXCM Canada, it use same platform as FXCM US, however, we have no restriction which US citizen have such as FIFO etc.

TOny

 
tonyqiu1971

hi, all:

divisa is best forex broker which I have experience, however, DIvisa only accept Institution trader, not retailer trader.

Divisa have high execution , and low spread , and low slippage.

TOny

 
babylonwolf

Thanks tony, can you tell me how the FIFO affects us, you mean in terms of taxes?

 
Chuck B

babylonwolf: "FIFO" means "First In First Out." So for US brokerage accounts, The FIFO restriction that Tony mentioned above requires that if you open two separate positions in the SAME currency [e.g., EUR/USD], you HAVE to close the FIRST one BEFORE you can close the second one !!! :-(

NOTE that this assumes BOTH positions were opened in the SAME FX acct. Thus I believe one could circumvent "FIFO" by having either 1) two SEPARATE FX accts. with the SAME broker, and/or 2) a separate FX account with TWO (or more) DIFFERENT brokers.

Also "Hedging" is also NOT allowed in US brokerage accounts, unless, like above, one "employs" conditions 1) and/or 2) above :-)

"FIFO" and "no hedging" are "thanks" to the Dodd-Frank Act, enacted in 2010.

NOTE that our APIARY accounts do NOT have these restrictions, even though it is US based. !!! :-) :-) :-)

I believe the only TAX consequences to the FIFO restriction would be if you had two [or more] "OPEN positions" - SAME currency - at the end of the calendar year, but only one of them was currently profitable. If the second position were the "losing" one and you wanted to take that loss for the year, you would HAVE to also first close out your profitable "first" position. UNLESS each was in a different acct. as noted above.

I hope this was helpful :-)

- Chuck B

 
babylonwolf

Today a representative from Apiary called me to check me up because my 14-day trial period is about to expire.

I'll really appreciate if any experienced Forex trader here can offer me some insights on what's best for me to proceed. Here's my dilemma situation:

I've been trading index options (debit/credit spreads,Iron Condor,Diagonal,etc...) for 5 years from scratch with only $40k seed money in 2011, and I've been doing very well until Aug, 2015, at the peak months (May-early Aug, 2015) I had an account of $3.55 millions and avg'd $240k/week (almost 1/4 million profits every week!), I was so high at those happy times that I wouldn't consider any other way of trading. But my strategies were only good for generally contained channel height (up, down, or sideway) then I got bumped hard by the suddently increased volatility. To make my story short, at the end of last month, I've lost 90% of all these year's accumulated profits and it affects my family dramatically. So I spent time to reflect what went wrong. it's still the classic mistake: No stop loss, only bet on market's normal cycling, but when market has long, big cycle, you lose on both ways (long down and long up trends, just look at S&P500 chart for the last 8 months) I can't take it anymore. That's why I come across with Apiary & I found currency trading is not what I thought before that it's very risky and more speculative. Armed with knowledge & experience and the right set up with high probability plus (THIS IS MOST IMPORTANT!) stop loss mechanism, One can have more control, in options trading for which it's hard to set up Stop Loss for credit spread due to huge bid/ask slippage. I don't see in currency trading that a 1.55/1.95 quote pops up but that's typical SPX options quote. How the hell can I set up stop loss and trail it along???

Ok I talk too much what I did, let me get back to my dilemma here. I need to draw income every week to support my family so Shawn's new service "signal" is very appealing to me, I think I just follow his trade alerts on my personal account with an outside broker while I learn, this way not only I can be a good trader in the future (but with my pace) for myself and Apiary but also can make some money along the way. But the representative confused me that I can have a personal account with Apiary which i don't think so. And currently I still have to take care my options positions here while I learn currency trading, I can't just focus on Apiary and hope get funded within 60 days and trade its funds,even I can achieve that, how much money can I make out of a $2,500 account? The performance record on Shawn's test on 3-week period is pretty good: 560 pips/3 week! And these trades are set up by Apiary seasoned prof'l traders, I trust them though nothing guaranteed. I know the stop loss discipline alone can well protect the account.

That's why I'm asking all of you here in USA, which forex broker is the best in terms of smallest costs to do business. I don't need much research stuffs because I believe I can get it from Apiary site.

And the representative from Apiary pressures me to focus learning and stay and even said Apiary can have my personal account! He worries that I'm doing something to against Apiary's purpose of new trader enrollment program, and said something like "you can't use our good stuffs here and trade for someone else..." Gee I don't know what to say, I don't even know how to make the first profitable trade! I mean if I'm good enough and get funded with $250k within next 30 days I could live with that, because I need average $20k monthly income from the account.

Bottomline here: I need to make money while I learn, now that my twins will leave for Stanford and Duke U. within 3 months and I have to fully support them. So FXCM is good enough? what about Forex.com (from Bain)?

thank for all responses, anyway.

 
babylonwolf

Thank you very much, Chuck, for the detailed explanation. So that means we have a problem here: If I open two trades on the same currency pair but based on two different time frames, one for short term quick gains but entered later than the other that needs to wait for several days. I can't close the first one for quicker profit?

 
Chuck B

Correct: the SECOND trade you opened for SHORT term profits can NOT be closed until AFTER you close the FIRST one you opened, UNLESS each is in a SEPARATE account, assuming you have a regular brokerage acct [e.g., with FXCM].

But as I posted above you do NOT have this "FIFO" restriction in an Apiary funded account :-)

- Chuck B

 
babylonwolf

thank you, Chuck.

 
Sokha

Chuck--

I have a corporate account with FXCM and I am not sure what you mean on the restrictions. I have not encountered the issues with my trades yet. I just execute trades as I see my setups. Now, Tradestation is no longer offering Forex accounts, and I am in the process of transferring my retirement account to FXCM as well. I was trained from OTA and now, I am very familiar with the FXCM platform. Probably the only platform that I know the best for my multiple time frames analysis. It is the best one out there IMO. I had accounts with IBFX, MBtrading, OANDA before but they did not fit like FXCM for my type of trading analysis.

 
hakchinoy

I'd avoid FXCM. Jeff has outlined several reasons why he doesn't like FXCM, and you could follow up with Vilas for his opinion about FXCM too.

When evaluating potential FX brokers, one needs to know if their policies are conducive to one's trading approach. Respectable brokers maintain segregated corporate and traders' funds. I won't work with brokers who frequently issue requotes.

 
Chuck B

Hi Sokha:

My apologies if my above post re the Hedging & FIFO restrictions was not clear. I'm not sure if what I say here will clear things up, but I will try !

"Thanks" to the aforementioned Dodd Frank Act, certain restrictions are placed on Individual Accounts held with US Brokerages, such as FXCM and OANDA.

1) FIFO Restriction ("First In First Out"): the "FIRST" trade you place [same FX pair, same brokerage acct] HAS to be the first one you close out.

Thus, e.g., if we open two "buy orders" on the EUR/USD, we HAVE to "close" the first one we opened BEFORE we can close the second one ["First In First Out"]. If we try to close the second one first, the platform will NOT allow it.

I also have a recently opened an FXCM "Micro" acct. [using their MT4 platform] and have "verified" that "FIFO" is correct.

NOTE: I NOW realize that perhaps I should have clarified that I meant "MARKET" orders, not "PENDING" orders. I'm not sure if "FIFO" applies to a series of, e.g., BUY stops. And since the mkt. is closed now, I can't "experiment" on my FXCM platform :-(

2) "HEDGING" restriction: we can NOT have "open" at the SAME time both a "BUY" and "SELL" market order [same FX pair, same account]. I believe we CAN do so on PENDING orders [buy stop and sell stop orders] - ideal for NEWS trading since we never know which way the news announcement will move the mkt. However, I think [but am NOT sure] that once one side, e.g., the BUY stop, is triggered, the platform automatically closes out the opposite side [the "sell stop" in this example].

FINALLY [and as I noted above], these restrictions do NOT apply to our Apiary Fund Accounts [both simulated and live] :-)

All this is for "individual accounts." You mentioned you have an FXCM "CORPORATE" account. But I would still think the above two restrictions apply, UNLESS you have separate "sub-accounts" within your Corporate account.

Hopefully I have added "clarity" rather than more confusion !:-)

- Chuck B

PS: HAK: thanks for your "heads up" comment re FXCM. I'll have to ask Jeff re this in his Thur. night "Q & A" class ! :-)

 
Sokha

Thank Chuck. I did not know about the FIFO. I know that I cannot hedge but it is not an issue for me since I swing trade most of the time anyway. Most of my orders are limit orders for SET (Stop loss, Entry, and Target bracket) so not all orders will trigger at the same time. Thus, hedging is never a problem. I have not encountered with the FIFO yet because my targets are either set at T1 2:1 reward : risk or lower TF opposing level and target 2 at HTF opposing level.

Thanks for the head up. I have been with FXCM since the OTA introduces the platform into its teaching. So far so good for me. I love its platform. It is the best IMO. Nice to know about Jeff's comments, but I don't worry about that. Most Apiary instructors are day trade Forex so it might be an issue for them, but not for me.

I day trade Futures; not Forex. However, I start to day trade Forex for Apiary Fund during the 1st two hours of Asian and London opens.

 
Chuck B

YW Sohka. Glad I was able to help !!! :-)

I "joined" OTA back in 2008, but had to discontinue due to losing lots of $$$ trading stocks and options [I had a Fidelity Acct]. At THAT time they were using Tradestation, so I wonder why OTA switched to FXCM [which I assume they did long before TS recently announced - as you mentioned above - that it was no longer supporting FX].

- Chuck B

 
Sokha

You started OTA a year before me then. I love that time when Sam Seiden was still teaching. You're an expert in S/D by now.

OTA use Tradestation for Futures and FXCM for Forex as their teaching tools now. Bachir did an excellent job how to use the FXCM platform in FXCM 101 and 102 in the hour with the pro.

I like both of these platforms because I have learned how to use them from the OTA instructors. Jeff Manson just did an online of Tradestation platform immersion.

You must love this Apiary statistic tab to fine-tune your strategy. It is the best when you already had a system, isn't?

 
hakchinoy

FIFO (order processing) applies--for NFA brokers and brokers that migrated to MT5--when one has more than 1 active orders.

 
Chuck B

Hi again Sokha !

Sorry for the delayed response [actually I logged off my computer to do other things after my last post to you]. I don't recall the Boston OTA [that I joined in 2008] teaching us about S/D, and unfortunately Sam Seiden never taught the classes I took there.

I didn't learn about S/D until later when I got the OTA emails, which almost always had an article by Sam. Still, I never felt like I completely understand the S/D and the "ODDS EHHANCERS" which he advocated.

Although it was probably just me, I remember that occasionally it seemed as if applying S/D + Odds Enhancers to certain parts of a chart he displayed did NOT correctly "predict" what the price actually did after leaving the S/D level, even though it seems to me as if that part of the chart satisfied all the S/D level criteria, and many/most of the "odds enhancers."

- Chuck B