Why every US trader needs to trade offshore

Ok cenetti,
to help you to understand our complains. I will be asking one by one.
First, please explain how the FIFO rule is good for the individual trade and how it is bad for the trading offshore.

I've never said FIFO rule is good or beneficial. I said it's NOT a deal breaker. Same thing with hedging. However having low leverage is beneficial when it comes to the risk taken and not to mention keeps under capitalized people out as they shouldn't even be trading a volatile market such a forex in the first place.

taking leverage outside of the equation, as I mentioned before. I would come with $100,000.00, 1:1 leverage.
I want to buy, and if I am wrong, I do want to buy more at lowest price for a short-term trade. That is a common used trade management strategy.
Hedging is also a management strategy, what about if I want to create a recovery zone, or if I want to reverse a trade I am not sure yet, or a buy going wrong when I do know it will go up eventually. you sell and when thinks go with your setup again, you close your short position. and so on...
I think one of the main reasons peoples at US are considering offshore trading is because flexibility, no leverage. here all of us know that you can not invest with $100. if you look the definition of investing in the dictionary you will understand that. How are you going to said to your family or friend that you are investor, if they ask for capital and you say $100. they all will guffaw (laugh in a loud).
I am going to give you one more, I now you familiar with it. Why at zulutrade.com, you are not allowed to see the trader strategy description?. Open a support ticket with then and you will find out. (US regulations)

That's not even a problem. Their biggest problem is US trader compensation calculation. My account was at low #100s with over $200K follwing after all said and done, I've made pennies. That's why I no longer offer zulutrade.

C'mon, you can't be serious. First off, I still have the same trading account I funded 5 and a half years ago. It just grows much better offshore. Second of all, Forex.com, Oanda, or FXCM. Hmmm, let's see, which of these dynamic brokers I should choose. FXCM has been fined over and over, they have random price spikes which I never see at my broker, they are just about bankrupt. Oanda widens the spread randomly and Forex.com just simply finds every reason they can not to pay when you are winning. They write their own rules and these great regulations do nothing to stop them.

If two traders have an equal amount of disposable capital to trade forex with, how is low leverage beneficial. Once again, you are assuming that because I only put 10% of my funds with my broker, it's all I have. Two people have $100K to trade with, one has to put it all with broker, not protected, the other has to put $20K with broker and leave the other $80K in FDIC insured bank account. Who is more at risk? I know you are smart enough to grasp this concept, but for some reason you are pro CFTC. Let's forget about offshore, unregulated brokers. How about the rest of the world, UK, Australia they don't have any of these ridiculous regulations and London is the forex capital, I'm sure there are some very successful traders there.

You don't know how leverage works.

Leverage = margin
More margin = more risk

You can lose more than your deposit. Doesn't matter whether you deposit it there or somewhere else.

More leverage = magnified losses as well as profit potential.

There is big difference between 1:25 and 1:500

1:25 means With every $1 you borrow $25
1:500 means with every $1 you borrow $500

Key word here ... BORROW. Now you may have money to cover your margin call if needed. That's wonderful. But advertising forex to the little guy and the nature of trading in general, attracts little time gamblers. People who DONT have money to cover anything. Thinking he can't lose more than what he deposited. That's why low leverage is your friend, if you don't have money or experience.

All to say ... again back to the beginning. If you couldn't do it here in US with 50:1 - you won't make it over there with 1:200. As a matter of fact, you'll lose it 4 times faster.

But good luck all. I am not trying to be an a$$. Just trying to drop some reality into the bucket.

I hope everybody makes it.

Once again, sorry to say, it is you who doesn't get it.
Risk has nothing to do with leverage, and vice versa. The only way to decrease risk is to...decrease risk, in other words allocate a small percentage of your trading capital to each trade, simple as that. Your trading capital doesn't have to all be with the broker.



But the idea that you can "decrease" risk by depositing more money into your Forex account (because now your "leverage" seems "much lower") is absurd to the extreme.

Leverage is position size / used margin. Simple as that. If a broker gives you 500:1, you are using 500:1 EVERY TIME you open a position, if 50:1, you are using 50:1 EVERY TIME you open a position. Do the math on your open trades, it is the same always position size/used margin.

Ok. I hope you make it wherever you choose to trade from...

Best of luck.

Out of rebuttals. good luck to you as well.

Haven't received an e-mail from you. I have the solution you are looking for. [email protected]

More controversy from me. I will now be attempting to double an account every 3 days risking no more than 10-12% per trade. I will be using a system I learned here on FF, most of you who know me, will know the system. All credit goes to the system creator, I am just trading it according to the rules. What I want to show is how a very high win rate system when combined with higher leverage will grow your account much quicker. It goes along the lines of why we should not be restricted by the regulations imposed on trading with a US broker. 7 trades today, 7 winners. 43% growth, zero drawdown.

I know the next few posts will state how the account will blow up, etc, etc. Save your breath, I don't want the negativity here. If you want to support the project, feel free to post.

Once everyone sees the results, I may start a PAMM account if there is enough interest, but I haven't decided on that as of yet.

This will be fun to see Profit . I only wonder if you should start a new thread as this goes against everything that you started this thread for. Just a thought, I don't want anyone to get the wrong idea about why they should be trading with a broker outside of the US.

Already done http://www.forexfactory.com/showthread.php?p=8525005

As far as going against why this thread was created, not really, as I've always said the US restrictions do nothing but slow our gains. I'm not going over 40:1 on my account equity, I use very tight stops and try to be as precise as possible on entry and get that stop to break even quickly. If you have a winning system, leverage is a good thing.

Of course, I will continue to tout the fact that I pay lower commission, have tighter spreads and better execution than any of the US brokers can offer. If they revised all of the regulations tomorrow, I still wouldn't use a US broker. They cheat, rob and steal from their clients. period.

Obviously I could not agree more you know I trade outside US as well, my only concern is just because you have better leverage does not mean that you throw money management out the window. Just because you can take a full 100k position does not mean you should. Need to use same management as you would with lower leverage risking same amount per trade as I know you do. Cheers mate

Yes, nothing changing. Just trying to be more precise on entry, use a tighter stop and therefore, higher leverage while risking same % per trade. Actually, a bit higher for this project, however, I already have phase 2 and 3 planned, which I will explain when we get there.

Could you please pm me the broker you use? And a couple you could suggest? Been desperately searching for a reliable off shore broker for weeks. thank you in advance

​I am also trading offshore now. Can you tell me what's the broker you're using?

One must understand the reasons behind regulation in order to understand how to survive regulation.

@Jack, those of us who operate a business in,... shall we say one of the "Allied" regulated nations, are subject to laws first created by the CFTC and NFA which now make it a punishable offense to "Refer" a broker in any manner, short of a series 3 license or better permitting such an act, else the regs will identify an illegal reference of "referral" holding out as a public entity. Phone, sign language, web site, email any such manner is a violation of regulation code whether you are a member or non-member of a regulatory body or not.

Here's the basic reason why regulation "claims" to be protecting it's homeland retail traders... Most free countries do not spend much time teaching their common folks on investment or any understanding of margin depletion associated with leverage among violent volatility and trending leading to catastrophic loss. As such as much as 40% of Forex' 6 trillion a day in the hands of retailers was being lost from the US with as many as 90% of retail traders getting wiped out for lack of earnest education in long term survivable trading. This meant a HUGE amount of U.S. dollars at home and even off-shore were being lost to other counter-party traders converting the U.S. currency they would win from foolish retailers, eventually to another currency and hence retail Forex was a bleeding hemorrhage for the U.S. economic base, and most of the "Allied" nations facing similar in the eyes of these governing bodies.

It's no secret that today most of the world's nations control a substantial amount of their international GDP through institutional manipulation of Forex in huge dollar automated churning techniques and High Frequency Trading which now occurs in MICRO second transaction wars between large banking and prime resources, FUNDED BY double use of internal and dark pool currencies being permitted to these institutions to grossly effect quantitative relationships in relative currency manipulation. Governments cannot have huge gaping holes leaking currency out the back door by way of their citizens or residents not understanding Forex survival to become one of the 5% who do learn to survive Forex leverage use.

Regulation acting as "the trader's friend" (because all us retail idiots need a government to think for us), began tightening the restrictions around the throats of brokers to essentially kill off the retail market's access point via regulation of IBs and retail oriented primes, etc. As such, cut off the head and the body will die. It has succeeded with horrific efficiency and become a hugely profitable agenda for regulators issuing fines. And yes, it has killed off a lot of the scheming middle men actors who were defrauding unwary retailers and investors as a positive side-effect to stop thieving or careless brokers and 3rd party thieves.

Traders succeeding off-shore from "Allied" regulated nations will need to learn first how to do "due diligence" correctly to find the few unregulated brokers who operate on more reliable means over time. Then they need to learn how to understand leverage, margin and volatility exposures to trade conservatively among leverage providing compounding. Last, they must diversify gains into multiple investments or at least multiple brokers applying the learning in a manner with sufficient monitoring and reaction capability to stay on top of new market patterns of manipulation changing the Forex volatility patterns among which these patterns lead to "curve fitting" failures in auto-trading and even mechanical trading.

Solve for these and you will retire a happy trader, simple as that, (which is anything but simple as these are hard lessons to learn taking years of crafting and learning to perfect them in most cases). NOBODY can predict profit because nobody can predict the market. The one thing you can do is work evenly on both sides of the market to beat curve fitting, then and ONLY then, apply loss prevention as the first agenda, (not profit based on greed). As loss prevention takes hold, profit is the secondary effect of well orchestrated design and control. That pretty much re-defines "simple" even for us programmers and only when the programmer actually understands leverage management and loss prevention methods.

The same is true of the thousands of get rich schemes surrounding cereal-box EA robots spattered all over the web. If the designer cannot prove margin management among X leverage real-time and has no means to prove loss prevention / mitigation, that system will sooner or later end up eating its own feces into destruction. It's not "IF" it will, but "WHEN" it will and no amount of back testing can establish this with reliability otherwise.

Investment entities that succeed today have a myriad of institutional "legalized" cheating at their disposal and regulation will NEVER impact them as they are working for "the man" doing the job of churning internal funds to external manipulation while they payout a miserable average of 7% per year net adjusted gain or less for their clients, while they bilk anywhere from 30-100% and higher returns internally using the client's money to their advantage.

Do the work, learn the ropes, use small patient values and good procedures or find another avenue of investment gain. We're not long for finding that regulators will have code required to run in all trading platforms with integrated regulated controls under law running inside the platform as a requirement of regulation in all "Allied" sectors. At that point most retail offerings from Primes on down will cease to exist for any degree of real retail income compounding by leverage and volatility as these smaller entities will not be able to contend with the cost of such regulation and a dying market of retailers running away. Once again.... Cut off the head...

There are many other causes beyond these which drive regulation as others have pointed out over time. But for the most part the reason behind it doesn't matter if you can't find a way to rise above it and if you do rise above it in the U.S., your next hurdle is managing the IRS debacles. The U.S. is the only significant country in the free world today which taxes it's people based on "U.S. citizenship" rather than residency requirement. No matter where you live as a U.S. citizen you will owe IRS federal taxes on your income. How well does that define "freedom" for the free world?

I'm not anti-patriotic. I'm just tired of hearing politician's courting the media among which the average of them cannot speak above an 8th grade educational dialog, (many at 5th grade educational delivery) and THESE are the people running to hold the next position as "President" of the free world, telling the rest of us we're too stupid to be allowed to trade. Lasting change only comes by education, not by voting for the mud-slinging middle school student of your choice as the next head of state.

IMHO, best to all,

Afp