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Foreign Exchange Brokers

Stormin_Norman

Currency Trader
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Hello All,

I was wanting to dip my toes into Foreign Exchange and have been checking out all the online traders.

Most I have found have been overseas; I would much prefer if I could have an AU$ account and an Australian regulated company even if it cost a bit more in the pip spread.

I have been looking at Halifax Investment Services (http://www.halifax.com.au/public_panel/about.php) as a provider. They have leverage from 1% (quoted on the main page, could only seem to find 2% in the details). They hold all their money in Australia and are contactable easily.

Which platforms do others use, and how have they fared? I have by no means made my mind up; but from my research so far I have found them the most attractive.
 
Their platform looks to be another Saxo Bank white label. PacificTrader also white label that platform. It's actually really nice as it's integrated - equities, CFDs, FX, etc etc. They have a nicer spread on AUD/JPY than Pacific Trader... however...

My only problem with any retail Australian broker is that they operate deal desks and many deal desks discourage or don't allow any form of scalping (the simplest way to make consistent income on a daily basis). When you're trading with a market maker, you're trading with a broker - not a bank (or in an exchange with equities/futures etc).

On a semi-related note, I stumbled upon a press release from back in 2000 whereby ANZ announced that they had joined the currenex liquidity pool in our region - I'm yet to hear of any Australian based broker offering the currenex platform (I haven't thoroughly researched it as I don't have no where near enough capital to open an account with them... but nothing's popped up) - is anyone on here using the currenex platform with a broker here or off-shore?
 
Their platform looks to be another Saxo Bank white label. PacificTrader also white label that platform. It's actually really nice as it's integrated - equities, CFDs, FX, etc etc. They have a nicer spread on AUD/JPY than Pacific Trader... however...

My only problem with any retail Australian broker is that they operate deal desks and many deal desks discourage or don't allow any form of scalping (the simplest way to make consistent income on a daily basis). When you're trading with a market maker, you're trading with a broker - not a bank (or in an exchange with equities/futures etc).

Thanks for your response tayser. I concluded the same thing about the Saxo Bank white label of the trading platform for Halifax Investment Services and Pacific Trader.

I was also looking at Pacific Trader (http://www.pacifictrader.com.au/) however I saw that the UK division of Pacific Trader was in administration (http://www.pacifictrader.co.uk/) - so that put me off their services somewhat.

Are my concerns at using an overseas foreign currency broker justified? Or do the experienced traders on here use overseas traders and find them better to deal with?

May I be so bold as to ask for some recommendations from people who have used live accounts with some overseas brokers?

With regards to Halifax's dealing desks and 'scalping' i found this review of Halifax's services:

I have used this broker for a short while live trading.
They may actually be a more honest broker, but I am not completely sure.
Their spreads are a little larger that usual indicating that they may be honest. I have never had slippage with them - what I clicked is what I got - and that is with dial up internet.
Trades often went in the wrong direction after entering but I put that down to bad trading on my part as a beginner.I have since started candlestick trading and my trades have been excellent.
I made enquires about scalping and they told me they did not care if you scalped - it was up to me.
They did, however, warn me about news trading, telling me as a beginner, that slippage was a definite reality if I went there. Therefore, avoiding news trading was to be to my advantage.
Comparison with an interbank live chart showed a 1 pip difference most of the time (to be expected with a market maker) and rarely a 2 pip difference.
They use the GFT trading software. This charting software is the best there is in my opinion - a pleasure to use.
However, one has to watch out that the GFT software does not have certain programs written into it that cause you to lose money eg freezing of data feed when closing a trade.

Only time will tell with me what this dealing desd broker is really made of.
 
The NFA in the US has been slowly tightening up on what is largely an unregulated or loosely regulated market. Regardless of the platform or spreads offered people may also wish to check/confirm that there fx broker (US) of choice meets or will meet the new capitalisation requirements.

NFA announces forex dealers going out of business!
by Ryan Teeples

Wow! The NFA has just announced that four of its Forex Dealer Members (FDMs) will cease operations because of the new capital requirement that started December 21.

The NFA has yet to report which institutions are closing their doors, but this is certain to send some ripples through the market grapevine next week.

Now don't get all alarmed yet, but if you're with a dealer that was on the list we posted about earlier (http://www.pfxglobal.com/index.php?o...459&Itemid=116), you might want to give them a call and do some due dilligence.

Here's a link to the NFA announcement:
http://www.nfa.futures.org/news/news...ArticleID=2054


For Immediate Release

For more information contact:
Karen Wuertz (312) 781-1335, kwuertz@nfa.futures.org
Larry Dyekman (312) 781-1372, ldyekman@nfa.futures.org

NFA reports four forex firms have ceased operations in light of increased capital requirements

January 11, Chicago - National Futures Association (NFA) announced today that four of its Forex Dealer Members (FDMs) have ceased operations as a result of NFA's new $5 million capital requirement, which became effective on December 21. In addition, six additional FDMs have ceased operating since September 1, 2007.

"When NFA's Board of Directors adopted the increased capital requirement on August 15, 2007, NFA had 34 registered FDMs," said Regina Thoele, vice-president of Compliance. "As of December 31, 2007, that number has decreased to 24."

The four firms that were unable to meet the new capital requirement and ceased operating transferred their customer accounts to other FDMs.

"We closely monitored each of the firms to ensure that customer funds were transferred to another, fully-capitalized firm," says Thoele.

NFA is the premier independent provider of innovative and efficient regulatory programs that safeguard the integrity of the derivatives markets.
 
Excellent to know, thanks lesm :)

Which brokers do people use, and how come?

Do you think its important to have an account and trade in the local (AUD) currency? Or have you found other advantages outweigh the benEfits of that, and local regulation?

Does local regulation help much, or is a UK or US based firm just as reputable as an Australian one?
 
I'm running on a new platform from Deutsche bank DBFX , that was set up for me . It's not bad , I like it ...... anyone else using it ?

The capitalization issues are no problem , and they must have close to a fifth of the current market from what I can work out .

Change is good as a holiday lately though .
 
EFX is not one of the major multi-broker platforms - they're their own. Those big 5 platforms are just that: platforms that multiple brokers offer & liquidity is provided by the associated banks.

EFX claim to be backed by 10-15 banks afaik. When the Japanese have a public holiday, the spreads are quite noticably larger, so I'd say Bank of Tokyo-Mitsubishi is in their pool. I'd also hazard a guess and say Wells Fargo in the US is in their liquidity pool (they hold client accounts with them)...
 
Had an account with them for 4 months . Had problems since day one . First the system was down for a week . When finally started trading I learned that the execution price real time always go against you . Not the real time price ! They are using work a software that is designed to manipulate market price. so they can sachem the difference and make few bucks. Well , I continued trading regardless( After going to see them in the office in Auckland) I learn that the staff no nothing about trading. I wouldn't hire them to operate a coffee shop . The Family office in Auckland is under Regus Holding company which means they can close shop any day and disappear . The 'CEO' (What a joke) guy name Andrew - Very unprofessional. When I met him he was shaken and disconnected -offered 0 help regarding the price manipulation The worst part is yet to come ; The big steal was the margin . Margin calls take place randomly apparently.. even if you got enough funds to support the position . FAKE MARGIN CALLS! I was mislead by a guy name Ricardo - Illegal Immigrant that offered 'support' when I experienced fake margin calls - He lied few times . I asked him upfront ; What level margin call take place? he said - 'When Margin Gets to 0 % Guess what , They closed positions when margin was 20% .Stealing 250.000NZD I REPEAT 250.000 ...Fake margin call..
 
No commission (wider spreads) - market maker. I had a v20 account with them and never had any problem. It comes down to personal preference of what you're looking for in a broker I guess.
 
No commission (wider spreads) - market maker. I had a v20 account with them and never had any problem. It comes down to personal preference of what you're looking for in a broker I guess.

Mostly reliability and integrity. Haven't heard a bad story about them yet, but I'll be googling my arse off about it before committing 5 figures in any case. They push the spreads out on news events, and they don't advertise that, but I think that's pretty standard. Some don't, but aparently they'll freeze the platform and other shifty bidniss.
 
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