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Why every US trader needs to trade offshore

  • #61
  • Jul 24, 2015 7:29am Jul 24, 2015 7:29am
Quoting spyderman
{quote} Have you found eWallet to be a better option than wire?
And which provider have you had success with
  • #62
  • Jul 24, 2015 8:16am Jul 24, 2015 8:16am
Quoting spyderman
{quote} And which provider have you had success with
sent you a PM.
  • #63
  • Jul 24, 2015 8:55am Jul 24, 2015 8:55am
Quoting Profit Daily
Just wanted to provide an update. I am now trading exclusively with one offshore broker. I have used 7 total over the past 21 months. This particular broker has tighter spreads and lower commissions than all of them. Execution is flawless, no price spikes, frozen platform, no tricks of any kind. Withdrawals are 24 hours from request to my bank, even using e-wallet. So, once again, to all US traders, unless you enjoy higher spreads, higher commission, the broker trading against you, random price spikes and DEPOSITING 10X MORE TO EXECUTE THE SAME...
Can you tell me who is it? I would appreciate very much. Please send me a PM.
  • #64
  • Jul 24, 2015 1:48pm Jul 24, 2015 1:48pm
Hi Profit Daily,
Thanks for stating facts so frankly.

I've been a long-time lurker here, and am about to start trading seriously. If you would PM me with your broker info, I would appreciate it. I've joined here just to get this info, and this is thus my first post - so cannot PM you yet.

Thx in advance.
  • #65
  • Jul 24, 2015 2:54pm Jul 24, 2015 2:54pm
i have been through many brokers. i am not afraid to try another one.

i talked to this one off shore broker (i dont know if forum rules allow me to post the name?)

with the leverage and margine the off shore broker gives me compared to my usa broker, i need 6 times less capital in my account. for smaller accounts than mine, its even better.

as your account grows, the leverage comes down.


i am about to set up my off shore account and my usa account both on a trade copier with equal position sizes and over the next few weeks i will see how the off shore broker's execution stacks up to my usa broker.

using an off shore broker means their servers arent in the usa and i want to see is this is going to cause in delays in fills. btw, i dont trade during news.
  • #66
  • Jul 24, 2015 5:45pm Jul 24, 2015 5:45pm
This thread is absolutely rife with illustrations of the dangers of taking advice from those without the appropriate professional qualifications to offer it.

I hope that its readers won't assume that trading with more than 50/1 leverage is necessarily going to be more profitable, and that those following recommendations to trade through FX-CM are aware of that company's own current financial position, at the moment, as well as being aware of their history of being fined millions of dollars by regulators over issues directly involving the ways they've treated their own customers.

Some of the "brokers" recommended in this thread aren't actually brokers at all: they're companies pretending to be brokers while actually trading against their own customers.

A forex broker is someone (like "Interactive Brokers", for example) who executes trades on his customers' behalf in the interbank market.

If you want to trade with someone who (a) holds the other side of your position, (b) makes up and interprets all the rules, and (c) holds your funds at the same time, then good luck, and you may eventually need it.

You find out how "good" a broker is only when something goes wrong. Good luck trying to sue someone offshore, too.

And good luck, also, to those US-residents who decide they want to entrust all those functions to brokers "regulated" in Cyprus and other countries without particularly stringent regulatory requirements, and/or government-backed guarantees. (There are reasons why so many retail chop-shops are "regulated" there.)

Call me a skepchick if you want, but rarely, if ever, have the words "caveat emptor" sprung more readily to my mind.
  • #67
  • Jul 24, 2015 6:10pm Jul 24, 2015 6:10pm
Quoting Xela
but rarely, if ever, have the words "caveat emptor" sprung more readily to my mind.
I was going with "There's a Sucker born every minute," but, hey...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #68
  • Jul 24, 2015 6:12pm Jul 24, 2015 6:12pm
Quoting PipC
I use TD Ameritrade for forex. I have heard nothing but bad things about both FXCM and FOREX.com. The only reason I am going to consider using them is because they are the only providers that allow you to trade forex in an IRA.
I am not 100% sure but I believe you can trade fx in an IRA with most US brokers who offer IRA accounts IF (big IF) you are trading 1:1 - i.e., no leverage at all.

Currently, there are 2,500+ forex "traders" online at FF: what do you think the number would be if everyone were required to trade with no leverage?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #69
  • Jul 24, 2015 6:18pm Jul 24, 2015 6:18pm
@Xela I like what you say as I thought about it in the same way. Trading with an offshore unregulated broker isn't so exciting once you make money or even start to process withdrawals. In most of these situations there is a conflict of interest between the client and the broker.

However, I also wondered why should the option to trade with such brokers be marked illegal for U.S residents. It should be decided by the People (e.g the Traders), where if unregulated brokers are bad for business, most traders will realize this and then move on to a regulated broker. This will yield the unregulated ones to go out of business. (Competition & Capitalism)

The reality is that a lot of retail fx traders can only afford, or are better of with small accounts, and there is a necessity to trade with brokers that offer the best bang for the buck. Also considering most traders lose money, it is ok to do this until you start to be profitable.

I'm just saying it is strange that the gov't voted to make it illegal for U.S traders to have a choice and defy them their free will of choosing of what is best for them. - Who and why would vote for such a decision and for what purpose - seems there is some conflict of interest as well you know.
  • #70
  • Edited 6:35pm Jul 24, 2015 6:24pm | Edited 6:35pm
Quoting Xela
This thread is absolutely rife with illustrations of the dangers of taking advice from those without the appropriate professional qualifications to offer it. I hope that its readers won't assume that trading with more than 50/1 leverage is necessarily going to be more profitable, and that those following recommendations to trade through FX-CM are aware of that company's own current financial position, at the moment, as well as being aware of their history of being fined millions of dollars by regulators over issues directly involving the ways they've...
Good luck suing a domestic broker......

also have you read the thread? I have- not a single broker has been recommended by anyone.
  • #71
  • Jul 24, 2015 6:45pm Jul 24, 2015 6:45pm
Quoting Xela
This thread is absolutely rife with illustrations of the dangers of taking advice from those without the appropriate professional qualifications to offer it. I hope that its readers won't assume that trading with more than 50/1 leverage is necessarily going to be more profitable, and that those following recommendations to trade through FX-CM are aware of that company's own current financial position, at the moment, as well as being aware of their history of being fined millions of dollars by regulators over issues directly involving the ways they've...
I had an account @ PFG (futures broker in USA). Fully regulated by CFTC & NFA. I "might" get 50-65% of my funds back. Who do I sue if the money is gone? If you knew how easy it was to "fool" the regulators you'd laugh. If they were in the jail-cell business they'd hang the keys on the jail-bars with a piece of wire so they wouldn't lose them. I recently dumped FXCM & opened an off-shore account with 10% of the funds I needed @ my US broker. I prefer to lose 100% of a small amount rather than 50% of a large amount.

***BTW, all US forex brokers are FORBIDDEN from segregating funds. Now how much sense does that make? Why should I take on the liability of how the company is operated?
  • #72
  • Jul 24, 2015 6:56pm Jul 24, 2015 6:56pm
Quoting Xela
This thread is absolutely rife with illustrations of the dangers of taking advice from those without the appropriate professional qualifications to offer it. I hope that its readers won't assume that trading with more than 50/1 leverage is necessarily going to be more profitable, and that those following recommendations to trade through FX-CM are aware of that company's own current financial position, at the moment, as well as being aware of their history of being fined millions of dollars by regulators over issues directly involving the ways they've...
Well I'm not gonna get into a big debate about suing brokers and all that but I will say this. No one here is saying you have to use the higher leverage, but if I want to, it would be nice to have. If I'm so sure about a trade and all I have is a $1000 account, and I want to go for broke and open up a 10 lot, I should have the ability to do that. Let me say what I said in a previous post...ITS MY FREAKIN MONEY!!! If I blow it on that one trade, I have no one to blame but myself, but again, I should have the choice to put myself in that position. If I want to hedge a position, or maybe not close my first position but partially close a backup position, I should have the ability and it should be my choice. I know there are ways of getting around hedging and so on, but the point is I shouldn't have to "get around it".

Do me a favor, open a live account with one of the offshore brokers still taking U.S residents. One of the better ones, maybe the one me and Profit Daily both agree is the best one (I'll PM you the broker if you want so I don't get the commercial label). Then trade with that broker for a few weeks. If you don't think its a better way to trade, I'll tell you I'm sorry for wasting your time and buy you an ice cream cone.
  • #73
  • Jul 24, 2015 6:57pm Jul 24, 2015 6:57pm
If you want to trade with someone who (a) holds the other side of your position, (b) makes up and interprets all the rules, and (c) holds your funds at the same time, then good luck, and you may eventually need it.


In the bold type above, You've just described the regulated brokers in the US. My offshore broker executes traders on my behalf in the interbank market but also offers me the freedom the rest of the world enjoys trading forex. Yes, if you are a profitable trader, higher leverage WILL make you more profitable. Just the ability to add to winners with the additional free margin is huge in terms of profitability. Don't want to start an argument here, but if you enjoy depositing 10 times more money for margin than you need to, don't want your funds protected, do not want to close trades in the order of YOUR preference, than, by all means, DO NOT TRADE OFFSHORE, stay right here in the US. As far as a lawsuit against a broker, good luck here in the US as well, the regulations do not protect the trader. Just look at all the recent examples.
  • #74
  • Jul 24, 2015 7:01pm Jul 24, 2015 7:01pm
Quoting Pharm0r
{quote} Good luck suing a domestic broker...... also have you read the thread? I have- not a single broker has been recommended by anyone.
Dead on, PharmOr, just finished posting the same.
  • #75
  • Jul 24, 2015 7:03pm Jul 24, 2015 7:03pm
Quoting srt
{quote} I had an account @ PFG (futures broker in USA). Fully regulated by CFTC & NFA. I "might" get 50-65% of my funds back. Who do I sue if the money is gone? If you knew how easy it was to "fool" the regulators you'd laugh. If they were in the jail-cell business they'd hang the keys on the jail-bars with a piece of wire so they wouldn't lose them. I recently dumped FXCM & opened an off-shore account with 10% of the funds I needed @ my US broker. I prefer to lose 100% of a small amount rather than 50% of a large amount. ***BTW, all US forex brokers...
Exactly, US forex brokers couldn't offer segregated accounts even if they wanted to. Just another great example of the regulations protecting the trader.. It's actually kind of ironic, folks that pop in here claiming those of us trading offshore are out of OUR MINDS, when really, it's the exact opposite.
  • #76
  • Jul 24, 2015 7:05pm Jul 24, 2015 7:05pm
Quoting TheDirtySerb
{quote} Well I'm not gonna get into a big debate about suing brokers and all that but I will say this. No one here is saying you have to use the higher leverage, but if I want to, it would be nice to have. If I'm so sure about a trade and all I have is a $1000 account, and I want to go for broke and open up a 10 lot, I should have the ability to do that. Let me say what I said in a previous post...ITS MY FREAKIN MONEY!!! If I blow it on that one trade, I have no one to blame but myself, but again, I should have the choice to put myself in that position....
  • #77
  • Jul 24, 2015 7:24pm Jul 24, 2015 7:24pm
Quoting Profit Daily
If you want to trade with someone who (a) holds the other side of your position, (b) makes up and interprets all the rules, and (c) holds your funds at the same time, then good luck, and you may eventually need it. In the bold type above, You've just described the regulated brokers in the US. My offshore broker executes traders on my behalf in the interbank market but also offers me the freedom the rest of the world enjoys trading forex. Yes, if you are a profitable trader, higher leverage WILL make you more profitable. Just the ability to add to...
Yeah well said.

Just one more thing. I think someone asked a little while ago about execution speed for a trade with an offshore broker. I'll just say that i have a web account and a separate MT4 account with the same broker, and the speed is just fine. MT4 is MT4, no difference from my domestic broker. I really like the web platform though. Very fast execution, easily customized, and I like the instant email when a trade executes, or hits my TP or SL. Actually I hate the SL emails but its a part of the business after all. Ok I have to stop because I sound like I'm trying to sell you guys something (I'M NOT). Time to stop thinking about trading. Wishing everyone a great weekend. Go drink some beers.
  • #78
  • Jul 24, 2015 7:32pm Jul 24, 2015 7:32pm
Quoting TrkgSailor
Hi Profit Daily, Thanks for stating facts so frankly. I've been a long-time lurker here, and am about to start trading seriously. If you would PM me with your broker info, I would appreciate it. I've joined here just to get this info, and this is thus my first post - so cannot PM you yet. Thx in advance.

PM sent.
  • #79
  • Jul 24, 2015 8:01pm Jul 24, 2015 8:01pm
Quoting dkrock
{quote} Are all your post theory, or is this what you are really doing? Your overseas Forex account, for one, is illegal, but no one from a trading regulation body is enforcing that point. However, from the IRS side, that is a different story. You are required to report your Forex account the same as having an offshore bank account. And, once you exceed, $10,000 I think, you will need to begin doing daily reports each time your balance changes. Failure to report the account is a $100,000 fine. Failure to report the balances, within 15 days of the...
Wow, where did you come up with this. make it up as you went along? It all starts with your first statement, there is nothing illegal about having an overseas forex account. Someone in this thread actually contacted the NFA and confirmed this fact. As far as taxes, profits are reported the same way profits with a US broker are reported. The only correct point is when you hit a certain balance, reporting does become different. However, that amount is large enough where you can hire professionals who specialize in forex to handle this for you.

So I assume you trade with a US broker?
  • #80
  • Jul 24, 2015 8:26pm Jul 24, 2015 8:26pm
Quoting dkrock
{quote} Sorry you feel this way. Give me a few days and I will provide you the references in Federal Law, as well as the IRS forms that I know about. Meanwhile, like I said, good luck! I will "reluctantly" educate you on the facts you should be looking for yourself. It would be in your best interest to contact a tax attorney who knows about offshore accounts rather than pretending you know. Believe me, there is a law against everything and if someone wants to bad enough, they will use them on you. Your first issue is Form 114, Report of Foreign...
Here are all of the answers. As far as why trade offshore with under 10K, first and foremost because I have 10 times the buying power. I keep my forex funds in my FDIC insured US bank account and only transfer what I need to trade that day, so due to the high leverage I will never have over 10K in any broker account.

• There are no laws in the U.S. prohibiting U.S. citizens, or U.S. residents, from having financial accounts (or other forms of financial holdings) in foreign countries.

• In the case of a retail forex trading account held by a U.S. resident in an offshore brokerage, the CFTC has no authority over the trader holding such an account.

But, depending on circumstances, the CFTC may have some authority over the offshore broker concerned. It all depends on several factors, primarily (1) does that broker have any "presence" in the U.S. subject to CFTC regulation, and (2) has that broker's home government made a deal with the CFTC (called a Memorandum of Understanding), committing that government to comply with CFTC regulations regarding U.S. residents.

• Traders, like yourself, looking to trade offshore, need not become experts in CFTC regulation, or in the laws of the offshore jurisdiction where you are looking to trade. Instead, pick a reputable broker in that jurisdiction, and let the broker manage the legalities of accepting U.S. residents as clients.

The purpose of this thread is to provide you with a list of such brokers.

• The U.S. tax laws are another matter altogether, administered by a different agency of the U.S. government --- the Internal Revenue Service (IRS) --- or, as some of us refer to them, the Income Redistribution System.

The IRS asserts the right to tax U.S. residents on their worldwide income, which includes income (profit) earned in offshore forex accounts. Failure to report such income, and pay any applicable tax on it, is just as serious an offense as failing to report income earned in the U.S. If you do it, and the IRS catches you, they will not treat you gently.

In addition to the requirement for including offshore forex profits in your tax return, the IRS imposes a reporting requirement on all offshore financial accounts (forex, or other) holding balances above certain thresholds, whether they have earned profits, or not. This is the FBAR reporting requirement, which you referred to in your post.

Basically, the FBAR requirement applies to a U.S. person holding foreign financial accounts IF the total value of all accounts combined equals or exceeds $10,000 at any time during the tax year in question. If you, as a forex trader, have an offshore forex account and an offshore bank account, then the aggregate (total) value of those two accounts is the amount the FBAR is concerned with.

For U.S. persons holding foreign accounts with an aggregate worth of $50,000 or more, there is a different reporting requirement.

If the FBAR applies to you, you will be required to identify each offshore account you hold, and report the balance held in that account. This report is made to the IRS, but it is separate from your annual (or quarterly) tax return. If you are required to file the FBAR, and you fail to do so, and the IRS catches you, the penalties will likely be even more severe than the penalties for failing to report your foreign income.

• Here are some strategies to consider:

(1) Keep the aggregate sum of all your offshore financial holdings (all accounts combined) under the $10,000 threshold, so that you can stop worrying about the FBAR reporting requirement. If you are generating profits offshore, this will require repatriating excess profits back to the U.S., so that they don't put you over the threshold.

If you are specifically trying to move all (or most) of your assets out of the U.S., into foreign "tax havens" or other foreign jurisdictions, then repatriating profits would be counter to your objective, and this strategy would not apply to you. Instead, you will need to acquaint yourself with the FBAR reporting requirements, and make sure that you are in compliance.

(2) Understand that, if you have offshore forex profits which must be reported on your tax return, you will be revealing the existence of your offshore broker to the IRS --- whether the FBAR reporting requirement applies to you, or not. And the IRS is notorious for assuming that anyone holding assets offshore, and especially anyone earning profits offshore, is probably a tax-evader, and should be pursued aggressively. Therefore, you need to keep all your ducks in a row, so to speak, so that you can defend your tax return against an IRS audit. If (or when) the IRS becomes aware of your offshore forex account, they will assume that you are guilty of something, unless (and until) you can prove that you are innocent.

(3) If you have large deposits offshore, and/or if you generate large forex profits (either offshore, or here in the U.S.), you definitely should employ the services of tax accountants who specialize in forex taxation. If you have read this thread, you have no doubt come across the name of one such firm which has gotten good reviews from several members of this forum. Do a forum search for that name, and for other forum postings on the subject of taxes and tax reporting requirements.

But, do not rely on this forum, or any internet forum, for accurate tax information. Search out a tax professional with experience preparing the tax returns of traders in circumstances similar to yours. Be aware that many so-called tax preparers don't have a clue what the forex market is about. That's why you may need a specialist. Such a person, or firm, will not be inexpensive. But, their fees will be trivial, compared to the pain and suffering that the IRS can inflict on you.

Finally, don't assume that you can depend on the IRS for reliable tax information, or for help figuring out how to handle your forex reporting requirements. The IRS, like every other bloated government bureaucracy, is staffed with all sorts of entry-level people, some of whom are dumber than gravel. And in every case in which a taxpayer relies on bad information from the IRS, the IRS takes the position that it's the taxpayer's fault for not seeking better information.

•

If all of the above is depressing you, cheer up. Many of us trade forex offshore, without getting into serious trouble with the IRS. But, if you choose to go this route, you need to be aware of the potential for serious trouble, and take the necessary measures in advance to protect yourself.

Read more: http://forums.babypips.com/forex-bro...#ixzz3grW7whLV
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