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Why every US trader needs to trade offshore

  • #81
  • Jul 24, 2015 8:40pm Jul 24, 2015 8:40pm
Quoting dkrock
I don't know what to tell you. Just good luck! If you are an American, then the laws of America apply to you, whether you like them or not. Laws can be changed, but until they are, willful breaking of them is your own personal risk. The jails are full of people who willfully resisted. For me, I choose the other option. For you, you might get away with it, but I am not entirely sure you should be promoting it. So, that is the purpose of my post. A reader better have legal representation on standby before creating an offshore business related to finance....
Once again, there does not exist a law prohibiting trading forex with a non NFA regulated broker. The NFA even states they advise against it, but it is not against the law. You seem to have done alot of research so I am shocked you are not correct on this very important aspect.
  • #82
  • Jul 24, 2015 8:44pm Jul 24, 2015 8:44pm
Please call the NFA and ask so you can actually hear it from them.
  • #83
  • Jul 24, 2015 9:04pm Jul 24, 2015 9:04pm
Quoting dkrock
A reader better have legal representation on standby before creating an offshore business related to finance. You might think you are a little fish, but the law applies to you regardless.
it's not illegal for US citizens to form offshore business entities. Obviously. Cast a glance at the Fortune 500 to find some examples. The US IRS can tax you if you are a citizen, but it can't tax your foreign corporation that is doing business entirely outside the boundaries of the US. If you, John Q. Citizen, derive income from the foreign entity then that is subject to US taxation. But the foreign entity's income is not. The latter fact opens some avenues for creative thinking. There are lots of countries that cater to US citizens and businesses who wish to form offshore business entities. You just can't do it in the dark anymore. And it does not make any sense really if you are not going to set up some kind of real physical presence in that foreign country. But it's still doable. It's complicated and not without expense. Personally, I just never found another country I wanted to spend so much time in outside the USA.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #84
  • Edited 9:24pm Jul 24, 2015 9:08pm | Edited 9:24pm
Quoting hayseed
{quote} //----- hey profit daily.... nfa called me back 3 times.... per the specialist, 'they can not give legal advice ..... there is no law specifically saying we have to use a nfa member broker but they strongly advise against using a non-member broker'..... that is from nfa themselves and they left me a voice mail saying the same thing.... as for the risk part, that's just my assessment... nfa offers me a blanket of protection.... of course i would be negligent not to point out how thin that blanket has been lately when considering the...
I believe the legality issue has already been answered per the NFA

It seems to me the resounding issue is tax evasion....nobody is trying to avoid taxes. We've all said you should be reporting them.

So far I've found no precedence for someone with an overseas broker being prosecuted by the NFA. Still searching..if I find something I'll report back

Quoting dkrock
{quote}basically, if you make enough profit, you will become an example by the trading authorities. Regardless of profit, you will become a criminal by the IRS. The IRS considers you automatically guilty of drug money laundering by even opening any overseas account. Failure to report the account, and your earnings will cause your funds to be frozen, you arrested, and if you can prove to them you are not a drug kingpin, but a Forex trader, a few months later, then probably just fines that will exceed your earnings. .
This is 100% fear mongering. You don't go straight to jail for tax evasion. You get a trial just like everyone else. Lets be real. Your funds aren't frozen without a hearing either. The IRS doesn't just go around picking and choosing and deciding to freeze a persons account on a suspicion. You get an audit, a notice in writing, a phone call, and a summons. I know that with just a entry level college course on business law. Even if everything else is correct, the fear mongering isn't needed- you have to be proven guilty of a crime, or negligent....but you get due process regardless.
  • #85
  • Jul 24, 2015 9:27pm Jul 24, 2015 9:27pm
Quoting Profit Daily
{quote}

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.
I think we can arm-chair quarterback this until the sun explodes, but in the end, these two statements are probably the most important.
  • #86
  • Jul 24, 2015 9:35pm Jul 24, 2015 9:35pm
Google-fu

http://www.investopedia.com/articles...ex-account.asp
  • #87
  • Jul 24, 2015 9:47pm Jul 24, 2015 9:47pm
Quoting Pharm0r
Google-fu
Will your Belizean IBC be able to open a trading account at regulated brokerages in the UK and Europe?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #88
  • Jul 24, 2015 9:56pm Jul 24, 2015 9:56pm
Quoting dkrock
{quote} Sorry to hear you are so nave too. Go try to withdraw $11,000 cash and drive around with it in your car...and watch what happens. Please be sure to come back to the thread and tell us how many months it took to get your money back, and if the ink is off your fingers.
Another myth. I've withdrawn 11k cash to buy a car (and heavy equipment) from a local friend/business. You fill out a form, call the bank in advance. Have you ever withdrawn that amount or are you simply regurgitating internet myths?

I'm not rich either, so pulling that much cash for me is quite dink in the savings account.
  • #89
  • Jul 24, 2015 9:56pm Jul 24, 2015 9:56pm
Quoting dkrock
There is a lot of grey and frankly I am shocked I even have to research it for you. I cannot find the clause that says American laws apply to American citizens, but I have read it in there before. As a grey issue the enforcement of the law will most likely be determined by your source of primary income. If you are a full time trader, like me, then I am a financial entity. However, if you are a gambler, like most FF members, and still have a job, then you might consider challenging the law and probably stay under the radar. However, whether you consider...
This thread is not about the IRS. Nobody here is trading offshore to avoid paying taxes. This is simply devoted to trading on the same playing field as the rest of the free world. The NFA/CFTC is a completely separate issue and once again there is no law prohibiting trading offshore. Now, of course, they have once again over -reached their authority and have strong-armed most countries into not accepting us as traders. But if a broker is willing to accept you, there is no law prohibiitng you from trading with that broker. Once again, why put up 10 times the amount for margin here in the US, when the CFTC does not allow any segregation or protection of your funds. Trading with a US broker is the real risk. Look at all the examples in the past 5-6 years of people trading with NFA regulated brokers who lost everything because the broker was cheating. How many times has FXCM been fined? Nothing is done about it.
  • #90
  • Jul 24, 2015 10:06pm Jul 24, 2015 10:06pm
Quoting The Fool
{quote} Will your Belizean IBC be able to open a trading account at regulated brokerages in the UK and Europe?
Something I've attempted to research, and since given up on it. As I said before....that's way too much work for the perceived benefits. In full disclosure I hold no overseas accounts in excess of one thousand dollars, and I don't recommend either way. My funded trading account is in the US. I am giving it a shot though, pending my prison sentence I should be receiving according to some.

From my understanding, it works the same way as opening up a retail account....if they broker abides by the US rules and you report, there's no issue. But then why do they have to? Who the fuck knows? Besides, IBC sounds like tax evasion to me

I don't see why one would bash the idea of trading overseas though....especially with no precedence of prosecution, and a bunch of maybes on whether or not it'll be perceived as illegal.
  • #91
  • Jul 24, 2015 10:08pm Jul 24, 2015 10:08pm
Quoting dkrock
{quote} Why do you need a form to carry your money? What if you just have money? And no form? Stop being so narrow minded. First, I find it offensive that someone can declare me a criminal and take my money for no reason. Second, I find it offensive to have to fill out a form!!!! to carry my money. Are you getting the point? I am not against hating the ridiculous rules. I just think it is irresponsible to declare everything is okay, when it might not be. Post 82 was what I wanted to see. Now, Good Luck to all of you and may you never get caught....
I agree with you as well, and I'm simply providing my views and points/counter points. By no means do I hold any animosity or anger towards you or any other trader.
  • #92
  • Jul 24, 2015 10:22pm Jul 24, 2015 10:22pm
Quoting Pharm0r
Something I've attempted to research, and since given up on it. As I said before....that's way too much work for the perceived benefits. In full disclosure I hold no overseas accounts in excess of one thousand dollars, and I don't recommend either way. My funded trading account is in the US. I am giving it a shot though, pending my prison sentence I should be receiving according to some. From my understanding, it works the same way as opening up a retail account....if they broker abides by the US rules. But then why do they have to? Who the fuck...
Well it's simple enough, you just call them and ask. Always possibly a snipe hunt to find the right person but usually not. I have been down this road and it was several years ago, so things might be different now - but when I asked several reps at the nicer shops (in the US and Europe) if they would let my Panamanian SA open an account, I got 100% "no"...Interestingly enough, your question "May I?" is often answered with the question "What size of account do you want to open?"..... ...anyway, said reps will have a list of greylist countries that they can look at or prolly have memorized, and if Belize is still on it, you will hear "No." too....

Personally, if somebody wants to gamble with their money at an unregulated casino or fx brokerage either in the US or outside of it, I don't care, that's their business. You can piss away your life's savings playing the slots at casinos everywhere, so fine, what's the difference?

I only have a problem with lax regulation when it applies to entities who enjoy some kind of protection from catastrophe that I am paying for with my tax money.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #93
  • Jul 24, 2015 10:28pm Jul 24, 2015 10:28pm
Quoting The Fool
{quote} Well it's simple enough, you just call them and ask. Always possibly a snipe hunt to find the right person but usually not. I have been down this road and it was several years ago, so things might be different now - but when I asked several reps at the nicer shops (in the US and Europe) if they would let my Panamanian SA open an account, I got 100% "no"...Interestingly enough, your question "May I?" is often answered with the question "What size of account do you want to open?"..... ...anyway, said reps will have a list of greylist countries...
Good information, and I'd imagine it's 100% true on the issue of amount vs "yes" or "no"

Didn't they recently crack down on the offshore bank accounts too?

The main rule I worry about- is whether or not I can withdraw. That's the test, if I'm able to withdraw my initial $1k deposit- then if I run into snags I'll have my tax guy recommend a tax lawyer and sort it out through the legal system. I worry more about withdrawing in forex than I do about legalities....
  • #94
  • Edited 10:39pm Jul 24, 2015 10:28pm | Edited 10:39pm
Speaking of taxes....here is what happens when you don't pay them- whether or not you know about it.

I see drock and i have met before

http://www.forexfactory.com/showthread.php?t=528430
  • #95
  • Jul 24, 2015 10:31pm Jul 24, 2015 10:31pm
Quoting dkrock
{quote} Fair enough. I just don't think traders should run for offshore accounts in protest, like I read on this thread. I would LOVE to return to trading my own technique, not the governments. While the margin requirements suck, they are not that big of a deal if you know how to profit. The part that I have the biggest complaint with is the hedging. It does not make sense to outlaw hedging as a means of protecting accounts. That statement makes no sense whatsoever. But, really, in true hedging, you are not making any money anyway. BUT>> FIFO is...
The margin is a big deal. Even more so if you know how to profit. Here is a very basic example:

I'm trading a standard lot of EURUSD. I need $2,000 in my US account to hold that position, actually slightly more, but trying to keep it simple. I need $200 in my offshore account, but that only allows a 20 pip stop, so I put in $400. Trade moves 100 pips in my favor. So now my equity in the US is $3000 and offshore it's $1200. Trend looks like it will continue so I want to add another lot and move my stop to break even (50 pips). I cannot add another lot in the US as I don't have enough margin, yet my trade is risk free. For long term trades with 1000 pip target you will only make 10% of the profit because of this reduced leverage simply because you cannot add to RISK FREE trades This is the real issue. I still only risk 3% per trade initially, but I compound very aggressively and when you get a runner you can make 400-500% . You cannot do this with 50:1. Not to mention, if something happens to your broker, your entire account is gone, there is no protection, where I still have 90% of my funds in my FDIC insured bank account.
  • #96
  • Jul 24, 2015 10:38pm Jul 24, 2015 10:38pm
Quoting Pharm0r
main rule I worry about- is whether or not I can withdraw. That's the test,....
of course, you find out who you are dealing with by winning. Even the finer casinos will not allow you to win for too long. I'd imagine the same from the unregulated fx brokers. But I could be wrong. Maybe there is a supremely virtuous fx broker in Cyprus or Barbuda who offers 1,000:1 margin and pays out your daily winnings directly to your Paypal account with nary a glitch. And pigs fly out my butt to rain crisp bacon on my every picnic.

Anyway, fuck forex. I prefer the exchange traded junk. In the exchanges you are dealing at least with a broad confederacy of scoundrels, rather than one fly by night Cypriot vagabond who will rifle all the accounts and disappear into the backside of China like jacko....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #97
  • Jul 24, 2015 10:39pm Jul 24, 2015 10:39pm
Quoting The Fool
{quote} Well it's simple enough, you just call them and ask. Always possibly a snipe hunt to find the right person but usually not. I have been down this road and it was several years ago, so things might be different now - but when I asked several reps at the nicer shops (in the US and Europe) if they would let my Panamanian SA open an account, I got 100% "no"...Interestingly enough, your question "May I?" is often answered with the question "What size of account do you want to open?"..... ...anyway, said reps will have a list of greylist countries...
When you state "gamble your money at an unregulated broker", can you please show me an example of the regulation in the US getting any client money back from a shady "regulated" broker? Regulation, in itself, doe not make a broker good or bad. In other countries in the UK or Europe, maybe, but here, it is a very false sense of security. By using a high leverage broker, I keep 90% of my forex funds in my bank account, this is the best risk management there is.
  • #98
  • Jul 24, 2015 10:42pm Jul 24, 2015 10:42pm
Quoting Profit Daily
{quote} When you state "gamble your money at an unregulated broker", can you please show me an example of the regulation in the US getting any client money back from a shady "regulated" broker? Regulation, in itself, doe not make a broker good or bad. In other countries in the UK or Europe, maybe, but here, it is a very false sense of security. By using a high leverage broker, I keep 90% of my forex funds in my bank account, this is the best risk management there is.
Money sitting in a bank account doesn't make you money though

Quoting The Fool
{quote} of course, you find out who you are dealing with by winning. Even the finer casinos will not allow you to win for too long. I'd imagine the same from the unregulated fx brokers. But I could be wrong. Maybe there is a supremely virtuous fx broker in Cyprus or Barbuda who offers 1,000:1 margin and pays out your daily winnings directly to your Paypal account with nary a glitch. And pigs fly out my butt to rain crisp bacon on my every picnic. Anyway, fuck forex. I prefer the exchange traded junk. In the exchanges you are dealing at least...
I just spit my Guinness out all over the keyboard.
  • #99
  • Jul 24, 2015 10:45pm Jul 24, 2015 10:45pm
Quoting The Fool
{quote} of course, you find out who you are dealing with by winning. Even the finer casinos will not allow you to win for too long. I'd imagine the same from the unregulated fx brokers. But I could be wrong. Maybe there is a supremely virtuous fx broker in Cyprus or Barbuda who offers 1,000:1 margin and pays out your daily winnings directly to your Paypal account with nary a glitch. And pigs fly out my butt to rain crisp bacon on my every picnic. Anyway, fuck forex. I prefer the exchange traded junk. In the exchanges you are dealing at least with...

I withdraw every week and it is actually instant into my e-wallet in about 5 seconds. Does take 24 hours from e-wallet to bank though. It is truly sad people think it is more of a risk to trade with an offshore broker than FXCM, Forex.com, Oanda. I mean, seriously?
  • #100
  • Jul 24, 2015 10:49pm Jul 24, 2015 10:49pm
Quoting Pharm0r
{quote} Money sitting in a bank account doesn't make you money though {quote} I just spit my Guinness out all over the keyboard.
It's just the same money that would not be able to be traded in the US anyway, it would be sitting in the brokers account and just be tied up in margin requirements
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