Choose your broker wisely

This is an interesting read and for the newcomers take note.


http://financefeeds.com/fringe-fx-br...-certificates/

And trading with a US NFA/CFTC regulated broker benefits me how exactly? Is it the fact that I need to deposit 10 times more money for margin to execute the same size trades? or maybe not being allowed to hedge or having to close positions in a certain order? Nah, must be the fact that my funds are not protected whatsoever.

Trading with a US NFA/CFTC broker benefits you in ways you may not realize. Off the top of my head, the NFA independently verifies that their brokers do not have asymmetric slippage policies. Unregulated brokers usually offer fantastic spreads and reasonable commissions, and then make additional money off a trader with negative slippage exceeding positive slippage. The trader does not even know he is getting scammed. An obvious way to spot this is to check the broker's affiliate program payouts. If your broker offers higher affiliate commissions than what they charge the trader in commissions, you are begin impacted by asymmetric slippage. A savvy unscrupulous broker will instead make the affiliate payout based on a percentage of revenue earned from a trader in order to mask the inconsistency.

Just look at all the behaviors that the NFA and CFTC fined brokers for in 2009 - 2012. Those are all the ways that unregulated brokers are cheating traders today. It is also the reason why so many brokers left the USA -- they could no longer engage in these bad behaviors. Now they go offshore to run these operations without regulatory oversight.

You make some good points regarding the downsides of the industry in the USA, the biggest of which is the lack of a compensation fund when a broker goes bankrupt. However, if you look at the remaining players, they are mostly solid compared to the competition outside the USA.

I guess there are few offshore brokers which are focusing on compensation funds but who knows when any broker turned into scam so it is better to go with those broker which have a repute in the market.

Only 21 trades ? since 2013 ?

As my experience always taught me - you must always count on the fact that there is no perfect broker and adjust your trading strategy to that. There can be scams with tickets, bids, withdrawals so do a little research before you giving up your cash (or credit card number).

Yes.
Its all about performance than turnover.
Strategy is longer term and fundamental based.