no regulations stopping US residents from opening offshore accounts

And here's a link to the full 2000 page Dodd-Frank Wallstreet Reform Bill if you want to look up the actual text for yourself:
http://www.opencongress.org/bill/111...nid=t0:enr:371

Here is a quote directly from William Penner, Deputy Director, Compliance and Registration Division, Commodity Futures Trading Commission (CFTC):
Note: This forum won't let me quote his full statement as it truncates the text, so I had to pull out just the foreign bank part. The original has the full text plus William Penner's phone number in it.

Security deposit/leverage rules will apply to all registered entities doing business with US retail customers.



In my feeble mind that means only if they are registered with the CFTC. Additionally it has some stuff in their about soliciting new traders. As long as they didn't solicit you as a customer... IE you found them thru web search or whatever.

Yes there are some that allows you 1.1000

so how does this apply to fxopen and fxpro?

There are two points that a lot of people seem to miss on Frank/Dodd.

The issue on one hand is leverage. Some of us have developed very precise trading models that includes a trading system and a money management model (combined/integrated) that is geared to a certain leverage. Mine is 100:1. That's an optimal level not plucked from air, but based on empirical evidence. Getting dropped to 50:1, is no small thing in my world. It doubles the time-lines on revenue growth and alters (considerably) all financial projections for future growth, which in turn, changes every single project waiting in the pipeline for the funds!

Number two, the most important issue here is a government that can dictate who I bank with and what kind/type of services that bank can offer me. We've been down this road before with failed banking regulations and we've been down the road of having "Congressional Stooges" come up with cannon fodder legislative ideas as a smoke and mirrors solution propped-up before their constituency, just so they can say "we've done something about under regulated banks to protect your tax dollars from being in future bank bailouts." Yet, those regulations have absolutely nothing whatsoever to do with bank bailouts and won't stop the next wave of bank bailouts when they happen.

So, the issues is one of having Congress dictate who I can bank with and what kind of business transactions I can and cannot engage in with a particular bank, without that bank being subjected to ridiculous regulatory protocols.

This is a way for Congress to control commerce, not promote the free unbiased flow commerce. And, by default, it is a way to control the U.S. Citizen, which by any definition, takes away freedoms by default. So, now, to maintain the pip value of 100:1, you have to increase your cost basis in the trade, which increases risk - the exact opposite of what the so-called protective legislation called for.

Very stupid. Very dumb. And, very much a pain in the rear end. Now, Deutsche Bank develops jelly for a spine and dumps thoughtlessly dumps its customers into Retail Buck Shop Hell on Earth, with Forex.com. Which, places the "citizen" Retail Forex Trader in an even more risky environment than they had at 100:1 with dbFx (as just one example).

So, this is about leverage, sure. But, it is also very much about the Constitution of the United States of America and whether or not the Congress has the right to arbitrarily force and/or restrict Foreign Commerce, while invoking the Commerce Clause and whether or not its basis is Necessary and Proper. So, how is it either necessary and/or proper for the Congress to enact any law that abridges the rights and freedoms of the citizens of the United States, to freely engage the bank of their choice for routine matters that have little to no effect on the common good, whatsoever?

Forcing regulatory stipulations on any bank, for the sole purpose of preventing a U.S. Citizen from engaging in a financial transaction that has little to no consequence for any other entity other than individual citizen in the broadest of scopes, is by definition an abuse of power by the United States Congress. Or, at the very minimum it is an over reaching legislative preemption, on that which has little to no chance whatsoever of causing undue hardship on the general welfare of the average American tax paying citizen. In other words, there is no necessary and proper justification for such legislation, at all.

This part of Frank/Dodd, absolutely needs to be repealed immediately.

Hey JetTrader,

I agree the "Chris and Barney" Law is VERY ill conceived for many reasons. However, I'm not sure I follow you here "So, now, to maintain the pip value of 100:1, you have to increase your cost basis in the trade, which increases risk". In my calculations risk is determined by (lots traded times leverage = PiP value times Stop Loss). How does 1 lot traded at 100:1 with a 50 point stop put any more capital at risk than 2 lots traded at 50:1 with a 50 point stop? I think the VAST majority of traders confuse investment with risk. They are entirely different. Yes your investment will double, but in my calculations your risk does not.

I'm still trading with a reputable broker in a far off land at 100:1. Until Chris and Barn can climb inside of my PC they have NO way of regulating it other than through US compliant brokers. The foreign brokers are not required to report or abide by US tax law or any other US law unless by way of trade agreements enforced by their own native country.

As said before, Thanks to Al Gore the internet has allowed ALL of us to trade as Global Citizens.
I think that's the territory we better all fight to maintain!

Again, maybe I’m missing something here, so if I’m wrong, please show me logically the fallacy of my conclusions.

No doubt!!

Who do you use as a broker? I am trying to find a reputable broker that allows hedging.

From your profile you're in the United States, I'm not aware of any b0rker in the US that allows hedging in the same account, but you can use two accounts (main acct, and sub-account).

Yeah, I was hoping to find a reputable non-US broker that allows hedging and does not require FIFO. currently I use FinFX. But they are not reputable enough for a bigger account. I prefer STPs/ECNs but am open to anything.

I understand. I don't hedge, but I know it's possible with Oanda using a sub-account. You sound like you've been around the block a time or two, so I'm sure you already know about that possibility. Good luck.

EDIT: I think I read on here recently that someone opened an account with TradingPoint and had a positive review. You may want to check TradingPoint out.

Thanks. I will look into Trading Point. They look promising..

I’ve come to the conclusion that the regulations were not meant to regulate the trader. Here’s why;

If doubling your lot size produces the same P&L per PiP, and opening two accounts allows a trader to hedge, then ultimately the new regulations can be mitigated almost entirely. You may think Barney is an over zealous buffoon but I don’t think the ability for traders to skate around the regulations so easy impacts his objective.

So if that’s true what was their objective?
The new regulations can be mitigated almost entirely because now in both scenarios (maintaining P&L per PiP and hedging) a trader must invest twice as much capital when they make a trade as they did before.

The new regulations force the Broker to have twice the capital invested in a trade with the banks thereby cutting the risk to the banks (and us) from an undercapitalized Broker.

IMHO these regulations were put in place to protect the trader AND the banks from undercapitalized brokers vanishing into the abyss of bankruptcy with everyone’s money. That’s not necessarily a bad thing!

Like most laws the Dodd / Frank Act is there to protect us from our own stupidity and the stupidity of others. For some out there that’s not necessarily a bad thing either! However, I don’t think the majority of us need the Government to protect us from ourselves or others by creating laws like always wear a seat belt, don’t eat that it will kill you, and don’t put your money in a cardboard bank. Roughly translated; your brain is to small to figure out what’s good for you so you’ll have to use Chris and Barney’s cuz their brain is huge!

I have two accounts, one with Tadawul and one with Dukascopy both are at 100:1. I had both before the regulation but I think you can still open an account with them at 100:1. Don't know about hedging. I never hedge so I never paid much attention to whether or not it was offered.

I'm not sure how ATC Brokers in the US fall under these regulations, but they currently allow hedging as an IB to FXCM UK.

A 'U.S. Person' is defined as one who is permanently resident inside the USA.

The SEC’s interpretation of U.S. federal securities laws limits Non U.S. Broker-Dealers to working with those permanently resident outside the USA. Non U.S. broker-dealers cannot approach and/ or solicit U.S. resident persons because an Internet Web site is interpreted by the SEC as being the same as a telephone call to a client.

Non U.S. broker-dealers maintaining an Internet Web site can thus only accept a U.S. person if he or she has not been solicited either directly or indirectly through accessing their web sites under the 'unsolicited' exemption Rule 15a-6. U.S. customers wanting to work with Non U.S. broker-dealers can thus only approach Non U.S. broker-dealers under Rule 15a-6 if they have not been to their web sites and should be prepared to certify this fact in writing to ensure compliance with applicable law.

Only to non-US citizens, same as FXCM UK.

How you define 'permanently' for persons with dual citizenship, has permanent home in another country and live there 4-8 months each years?

What can the regulation do to him if he apply and set up trading accounts from there, let say Brazil, for example, then do the trading mostly in the US?

I don't know but I think the line below is key. Maybe a broker would take on a US client if they wrote an affidavit. Probably just easier for the non-US broker not to deal with a US Citizen, but there is no law barring it. At the end of the day it is up to the non-US broker to decide to take an account or not, which it appears they can if they really want to. Money talks.

customers wanting to work with Non U.S. broker-dealers can thus only approach Non U.S. broker-dealers under Rule 15a-6 if they have not been to their web sites and should be prepared to certify this fact in writing to ensure compliance with applicable law.

I'm no expert, but I would think that if you could show proof of address in Brazil then you are golden. Worth a try.