NFA Approves Prohibition of Credit Cards to Fund Retail FX

"Since our inception, NFA has been committed to protecting investors," says NFA President and CEO Dan Roth.

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FXCM US now offers raw FX spreads and the mark-ups previously included in the spread have been replaced with low commissions*. These super tight new spreads are ideal for scalping and provide increased execution benefits to stop and limit orders.

http://i.imgur.com/84mAq8B.png

* In some instances, accounts for clients of certain intermediaries are subject to a markup.

That means when trading 10k of EUR/USD, you would pay 0.2 pips in spread cost plus 80 cents in round turn commission (40 cents per side). That's $1 in total transaction cost or 1 pip on a 10k trade, compared to our previous spread of 2.5 pips. That's a 60% reduction in cost.

http://i.imgur.com/6qDMIQm.png

1 Listed spreads and commissions will not apply to some customer accounts due to their relationship with certain intermediaries.

Hi Jason,

Is the commission (percentage) the same for all currency pairs or does it vary?

Hi Fugly,

There are two commission schedules*: 4 cents (per 1k micro lot per side) for the most popular currency pairs, and 6 cents for the rest.

For example, if you trade a 1k micro lot of EUR/USD, then with a 0.2 pip spread you would pay 2 cents in spread cost plus 8 cents in round turn commission (4 cents per side). That's 10 cents in total transaction cost or 1 pip on a 1k trade.

On the other hand, if you trade a 1k micro lot of ZAR/JPY, then with a 0.5 pip spread you would pay 5 cents in spread cost plus 12 cents in round turn commission (6 cents per side). That's 17 cents in total transaction cost or less than 2 pips on a 1k trade.

http://i.imgur.com/Jx5a15q.png

* Listed commissions will not apply to some customer accounts due to their relationship with certain intermediaries.

I've got something to say that may come as a revaluation to some of you...

When you trade forex- you are trading borrowed money regardless. It's called leverage.

Thanks again NFA for telling us how we can and cant spend/borrow our own money. Hopefully the next rule all I have to do is hand them my money and they will trade it for me. Ridiculous.

Or, it snowballs into the Trader halting all trading, more self-discipline, more research, more study, more learning and eventually trading skills that can cause a flight of capital from a retail bucket shop, over to a prime broker on an institutional platform.

It really all depends on the individual. I personally don't like the idea of funding an FX account for a novice or beginning Trader through a credit card. However, a debit card would be an acceptable way to establish a small test account. That's what I do and it has worked for me for years. When I want to test something away from my production platform and I want a "real cash" environment, I simply roll over to a tiny test account funded with a debit card - quick and easy deposits.

Ultimately, people have to take responsibility for their own trading results - that's the bottom line. Government will attempt to regulate any kind of human behavior it can get its hands on - if The People let it and too frequently, that's exactly what The People do.

Absolutely, I keep saying it over and over- trade offshore, keep your account in your bank and only transfer what you need to trade. Last night I transferred $40 to my offshore broker to sell 2 mini lots of nzdjpy, I added 2 more once in profit and 3 more this morning. I just withdrew $840. You simply cannot do this in the US.

To take it one step further, why is it that anyone can withdrawal their life savings, go to Vegas, and put it all on black? There is nobody at the door to the casino saying what % of your net worth are you bringing in? Where did the funds come from? etc, etc. Oh wait, the government BENEFITS from Vegas. How come people can take their entire paycheck and go buy lottery tickets? Yet, it is considered more risky for me to take my $40 and parlay it into $840 in a matter of 15 hours, half of that while I slept. I never have more than $100 on deposit at any broker, with 500:1 leverage, there is no need.

Oh, by the way, my unregulated offshore broker took all of 46 minutes to process my withdrawal.