The Uncertain Future of US Brokers

The United States of America has long been known as the "land of the free and the home of the brave", but when it comes to the Forex market, this term takes on a completely unique meaning. Increasingly restrictive NFA policies designed to protect US investors have been chasing and, in some cases, punishing US currency brokers. The rates imposed to maintain a brokerage firm are prohibitive for most, and trading conditions are limited compared to those in other regions of the world where regulation is less stringent.

In August 2012, FX Club (also known as Forex Club), formerly one of the best brokers in the United States, abandoned its RFED license, the regulation required to accept retail customers. Since then, the company has been accepting only institutional customers, and will likely continue to do so, at least for the foreseeable future. As part of this change, FX Club became another currency broker, replacing its CEO (after OANDA and GFT, among others), with Michael Klena, of E * Trade, who came to lead the change of the company.

Although the FX Club abandoned its RFED license, the NFA continued to investigate the broker, charging the company for $ 300,000 administrative violations, which the broker solved the day the claims were made.
Just two months after the FX Club closed its doors to US retailers, Advanced Markets made the same strategic decision, opting to give up its RFED license and operate only with institutional traders. This decision is much less surprising, since Admiral Markets (aka AMIFX) has always held that only a handful of retailers are admitted who presumably can transfer their accounts quickly with the broker's help if necessary.

What comes next in the forex retail market in the United States is uncertain, but if the NFA fines and increased regulations on brokers are a clue, it would not be surprising if other US brokers throw in the towel . Although I do not think that industry giants like FXCM or Forex.com will disappear in the short term, smaller entities may find themselves fighting an uphill battle. Some may not be interested in fighting much longer.

Tips for Choosing a Good Forex Broker

In the 70's the Forex market was created, and in the last 10 years it has experienced strong growth thanks to the internet and new technologies. There are studies that indicate that there are daily transactions in the Forex market worth 4 trillion dollars (the New York Stock Exchange moves 50 times less daily).

In addition, individual investors and traders have grown very fast, thus becoming one more participant, although very small in comparison with the Central Banks, commercial and investment. With this great growth in the Forex market have emerged new investment brokers with the aim of attracting retail investors. There is so much broker offer that it is difficult to choose a good broker.

A broker is the financial intermediary in our operations, that is, it is the intermediary between buyers and sellers. 10 tips that you would have to consider to choose a good broker in the Forex market are:

1. Avoid welcome gifts

Avoid all those brokers who offer welcome gifts type 30% welcome bonus. In most cases if you stop to read the fine print of the conditions, you realize that in order to withdraw the bonds or the money itself, you are more likely to end up losing all the money deposited. One fact to keep in mind is that if you want to withdraw your money and do not meet the conditions (almost always), you will be deducted from your account the bonus received or the amount of the gift made.

      2. A solid and respectable broker

Choose a broker with a lot of equity, because the greater the capital of the firm, the greater the protection of its funds. To determine the vitality of a broker, you should look at the number of employees you own. If you are a solid and respectable organization, you will have hundreds of employees, who will be able to assist you 24 hours a day. It is also likely to have hundreds of thousands of accounts. If the firm has few employees it is likely that they have a small capital or they are unable to provide the personal assistance you need.

       3. Regulated Broker

It should be noted that the broker is regulated by a competent entity such as NFA (United States), FSA (United Kingdom), FINMA (Switzerland), among others. We must avoid all those brokers who are in tax havens. Brokers in Europe, Canada, Hong Kong and Australia have adequate regulations, and capital requirements are high. If your company is in a third world country, the current regulations may not be adequate.

        4. Greater Leverage

Leverage can help you reap considerable profits but can also cause huge losses. It is advisable for a broker to provide the leverage so that it can operate effectively in the forex market. Of course, greater leverage means better opportunities for you. Some brokers offer a leverage of 100: 1, which means that for every dollar in your account, you can borrow and use up to € 100. Other brokers offer up to 250: 1. When choosing a broker, you have to take into account the leverage offered, as this could be your ally to win big.

        5. Account Types

It is advisable for the broker to offer different types of forex accounts. For example:

•   "Mini" accounts require a minimum margin or equity that could be $ 250 onwards. With this type of account, you can trade in forex but the level of leverage is lower.
• "Standard" accounts, which require a minimum of $ 2000. This type of Forex account allows you to open larger positions.
•   The "Premium" account allows the opening of even greater positions.

       6.  Real-time information and good graphical tools

Facilitate daily decision making, helping to choose a more optimal investment.

       7.  Have a free demo account

It is advisable that the Broker has a free demo that operates in real time because it allows you to practice and learn from real or fictitious money the features and services of the broker you want to contract before opening a real account.

      8.  Avoid so-called brokers Snipers or Hunters

These brokers often buy or sell based on preset points, usually perform these maneuvers to increase their profits. Avoid this type of corridors. To know who these brokers are, you must communicate and interact with other operators online or through forums.

      9.  Automatic execution


One of the most important variables to keep in mind when choosing a broker is the speed of executions. The best thing is that the execution is automatic, so when we want to enter or leave the market at a certain price, the Broker usually respects it.

      10. Do not pay spot fees


Forex traders do not pay commissions for placing orders, unlike those that operate in futures markets. Actually, a Forex broker is a simple broker, not a broker or broker itself. Therefore, they obtain benefits through the Spread, this is the difference between the value of the "bid" and the "ask".

      11.  Remember the differences between hiring a market maker and an ECN (Electronic Communication Network)

You have to take into account the differences between an ECN and a market maker to know which type of broker can best meet your investment needs.

It should be remembered that: price volatility in an ECN is often higher than in a market maker's network, ECNs often do not allow leverage, unlike market makers. In addition ECNs usually give the prices that their liquidity providers mark, with the same exact margins, and then charge a commission for each round round transaction. However, market makers can open an account with fewer resources and their platforms are easier to use.

Do not forget that the market maker or market maker covers the position with other operations or does not cover it, so it assumes the risk contrary to yours. That is, if you win the market maker loses, which creates a conflict of interest.

        12.  Good customer service

The customer service is very important because they will help you to resolve any possible incidents that you may have. It is advisable to look for a broker to solve them as quickly as possible, not to hinder the withdrawal of funds, which does not have many complaints from other investors. To know the opinion that other investors have about the brokers in the market you can consult and participate in forums.

Is a Good Idea to Change Forex Broker?

One important reason you may have to switch Forex broker is certainly fear for the security of your deposits. If you ever ask your broker to withdraw some funds from your account, and it becomes excessively slow or unresponsive, then this is an excellent reason to switch brokers immediately. Of course, if you hear some reliable information about your broker's financial situation or ethics, it will also be good to consider a change. It is advisable to check from time to time the professionalism of your broker, even if you have obtained some good results, requesting the withdrawal of some of your recent earnings. If there is an unwarranted delay, it is advisable to close the account immediately and, if necessary, threaten to contact the corresponding regulator.

Moving from critical reasons to more common reasons, one of the factors that urged more than one customer to change brokers is the average level of spreads that are charged. For example, there are still brokers charging a spread of 3 pips in the EUR / USD pair. While this was the norm a few years ago, today it is considered extremely expensive. Switching to a broker that offers the EUR / USD at 1.5 pips or less makes sense, since the spread becomes the "cost of doing business", and over time can generate a loss in operator income, especially if you trade frequently using short time frames.

Another good reason to switch brokers can be an unstable platform. If you find that the trading platform is disconnected very frequently or that it takes a lot of time to execute an operation, then this is a convincing proof of incompetence or dishonesty. Dishonesty is more likely if these disconnections or freezes happen every time you are trying to enter a trade where you would have made profits quickly. Of course, it is important not to be paranoid and not to blame your broker for all your losses. However, as the Forex market does not have a centralized place, brokers have a commercial incentive to "shadow" their spread just above levels where many of their customers have stop-losses set in open trades. determining whether your broker is acting shady is to see if these price movements do not match the price feedback of other brokers.

Watch two or three. If your broker tends to produce sudden and unexplained spikes in price, which are not followed by other brokers, it is time to think about moving away from it.

A good way to get a better understanding of whether a particular agent is the best for you is to think about what the brokers are actually doing, and see things from their point of view. In order to do this, it is helpful to start with some facts about Forex trading:

1. Most currency brokers are not really trading any currency in the market. They are simply providing a price indicator, in the movements of which their customers can bet in exchange for two effective quotas: the spread or commission, and a small charge during the night that incurs each night any position that is left open. These brokers are in antagonistic relationships with their customers: they make money when their customers lose and lose money when their customers win.

2. The remaining currency brokers tend to monitor the trades of customers who have profitable trading data, and cover the aggregate positions of these traders with a bank. These brokers have a less contradictory relationship with their customers, but they may still face problems in the proper way of covering themselves in rapidly evolving markets.

3. The real Forex market is dominated by four large banks which together account for about 85% of the market volume. These banks provide liquidity to the smaller banks, which in turn do the same with smaller banks, who then provide liquidity to the brokers, and so on in the chain in size and importance. This tends to mean that the smaller the broker, the worse the price and the spread they are willing to give, as they themselves will not be able to get premium prices. The dilemma here is that these smaller brokers tend to offer lower minimum deposits. The more money you have to deposit, the better the service that will be available to you. Of course, this does not mean that you have to go higher up the chain than the one that is appropriate for your account size. In general terms, it is a good idea to adapt the Forex broker to the size of your account.

4. Much of the Forex market has a bad reputation and is poorly regulated. When you are

The Best Social Brokers

It is not a novelty that, for some years now, social networks have not stopped gaining ground. In this sense, more than one has wanted to join the success car and with more or less virtue has "copied" the style of social networks to transport it to any sector that boasts.

The brokers have not been waiting and, at least, the most affluent already have a live chat that offers a 24-hour customer service (no need to pick up the phone, go). However, others have gone further and have merged traditional online trading with the modus operandi of social networks, so what is this? No worries, below we present all the info on the social brokers and which, in our opinion, offer the best service and tools according to their price.

What is a social broker?

Let's get into the matter: we mean a social broker or social broker (Spanish term) as the operator that not only offers "traditional" online trading services, basically trading shares, commodities, cfds, forex, etc. . but also uses an interface derived directly from the modus operandi used in social networks, namely: live chat, possibility to post videos, photos, comments, send likes, follow x people, etc. The reality is that the invention has been quite well and we will see why.

Advantages of a social broker

• No custody or maintenance fees
• Well, with the roll that it is rather a social community, most have been polished the typical commissions of custody and maintenance.
• Network Community
• The possibilities offered by a social broker are practically the same as those of facebook; we can send videos, talk to other brokers, send likes and comments, create lists or groups of friends, share in social networks, etc.
• Copy to other traders
• This option is one of the most striking claims for most (not all) social brokers, which allow and facilitate the follow-up of other users' positions and copy them on the fly.
• All kinds of conventional tools
• Market analysis, live charts, economic calendar, indicators, updated news, etc.
• Trading Markets
• Spanish stock exchange and regulated international stock exchanges.
• Investment products
• Stocks, CFDs, Forex, commodities, binary options and obligations (rare).
• Trading Platforms
• These can be either the social support of the broker, or more conventional platforms such as Metatrader4. Almost all of them usually have a mobile App.
• Demo Accounts
• Many brokers offer demo accounts without any commitment to take a look at the matter.

Where do they get the benefit?

In principle this class of brokers only benefits from spreads. They also do not play with exchange tables, which is why they do not benefit from your losses. Now, we recommend to always read the fine print before hiring any service; in this case many brokers require a minimum deposit (usually between $ 100 and $ 300), which we would not want to lose for having saved us ten minutes.

What do I have to consider when investing in a social broker?

Well, come to this point it is worth remembering that you should always invest with head and expose ourselves to the risk of losing the investment. Therefore, we recommend to have some aspects in mind in case of being beginners:

• Consult or follow the experts
• Thanks to the social brokers this act has become a little easier. We can follow and analyze the positions of other traders more experts in the matter to learn from their movements.
• Diversify the portfolio of investments (not to lose all the parné of one).
• Be well informed of all the possibilities offered by a broker and not start investing for the most complicated products (such as cdfs, futures and family).
• Compare the best brokers on the market before choosing one.
• Try demos
• Before we start investing we can get a pretty good idea of ​​how the tool works.
• According to experts, long-term investments are more productive than short-term investments.
• Learn how the broker world works, its financial jargon, analysis, tools, etc. and always stay informed of the latest economic news
• Remember that even if the broker is free, you will always have to pay the redemption fee if you buy stocks: all on the stock exchange here.

The best trading platforms

Almost as important as finding the best online broker is the choice of a trading platform that fits what we are looking for. Many traders do not notice this peculiarity and only take into account the commissions and which is the cheapest broker. However, sometimes cheap can be expensive and as we always warned, when investing our money are not worth half measures we have to report well! That's why we bring you a selection with some of the best trading platforms so that you start to operate with the most appropriate tools.

1. Broker and trading platform are not the same

We often have a capital problem that some brokers seem to ignore: we did not find information about the trading platform offered by the broker in question anywhere!

How is this possible? As it turns out that broker and trading platform are not the same: while the former is the intermediary arranged directly between us and the stock market; the trading platform is the working tool through which we will operate, negotiate and issue orders. What does this mean? The broker will offer us a service while the platform will allow us to execute our strategy.

Therefore, if we do not have the appropriate means to invest, our investments can end badly.Two types of brokers: with or without own platform

         2. Two types of brokers: with or without own platform

When it comes to hiring an online broker we are going to run into two possibilities:

•        Brokers who have developed their own trading platform.
•        Brokers that use a multibroker platform (also available to other providers).

Although there are very powerful tools developed in house by some brokers, keep in mind that a multibroker platform can open many doors to you when changing and negotiating with other suppliers.

Learning the operation of a platform is not an easy task, therefore, it is less advisable to hang on a platform that you can only use with a specific broker. As a rule, all brokers offer a platform (either proprietary or not) for free for their customers.

         3. Looking for the best trading platform

• Offer the stock instruments with which you want to invest.
• Have the functionalities you want to work with:
• A social trading platform is useless if you are not interested in following or sharing your trades. This will depend on your strategy and how confident you are with one or other of the functions: analysis indicators, real time, order types, graphs, automatic trading system, etc.
• Platform is friendly and simple to use:
• In an ideal paradigm, the best platform is the one that offers the most complete and easy usability for the user.
• Make it fast.
• That offers software compatible with our operating system:
• If we do not want to be using patches all the time, the better the software is compatible with our computer. Interesting are also the mobile version and online (called webtrader), so that we can operate anywhere in the world with any support without needing to download the program (tablets, mobile, other pcs).
• Access to the tool code:
• Some platforms like Metatrader 4 allow to modify the programming codes to create indicators or own scripts among others.

         4 and 5. The best multibroker trading platforms ( Metatrader )

We started the list with the trading platform par excellence Metatrader 4 (and currently its update 5). Created initially for Forex in 2005 by the company MetaQuotes, today it has been adapted for trading with more instruments.

•  Free trading platform.
• Analyze the market and execute orders (snapshots or pending).
• Customize the graphics and create your own scripts and indicators thanks to its open code, among others.
• You have an internal mail to contact your broker as well as a help system.
• You can have two real counts and as many demos as you want (with pretend money).
• More than 90 indicators.
• Automatic trading system.
• New webtrader format so you do not have to download the software.
• Ability to download the data history.

Ninjatrader

It is a platform whose operation is more focused on execution than on analysis. Ninjatrader is part of the NinjaTrader Group, LLC group, founded in 2003 and currently has more than 40,000 represented through more than 150 brokers around the world.

• Payment trading platform (demo with limited options).
• Operational especially for trading with futures, but also allows shares, forex and CFDs.
• Analyze the market and execute orders directly from the charts.
• Extensive customization of its graphical interface.
• Ability to download the data history.
• Real Time and Strategy Backtesting.

Visual Chart

Visual Chart is a multitasking platform specially designed for technical, graphic and fundamental analysis. Part of the Visual Chart Group, S.L. which was born in Almería in 1998 to expand to other countries like Germany and the United States.

• Advanced charts, custom tables, depth charts, financial news, etc.
• Operational especially for the trading of stocks and futures.
• Execution of orders directly from the charts.
• More than 200 indicators.
• Extensive customization of its graphical interface.
• Ability to download the data history.
• Real Time and Strategy Backtesting.
• Automatic trading system.
• Direct broker access and data history of more than 20 years for backtesting.

Pro Real Time

Pro Real Time is a platform that, like Visual Chart, focuses more on analysis than on execution. Pro Real Time is owned by the French company IT-Finance, which has more than 10 years of experience, 500,000 users worldwide and more than 300 servers managed in different data centers.

• Free tool (although you pay for the data in real time-> you can try to be version for a week without costs).
• Operational especially for the trading of stocks, futures, forex, indices, cfds, commodities, obligations and options.
• Powerful graphics and easy interface.
• More than 100 indicators.
• Possibility to download data history up to 16 years for backtesting.
• Automatic trading system.
• Lightweight version for smartphones
• Customize the platform: fonts and colors, graphics, create custom lists, est.
• Help and support service as well as access to the trading community.