The last few years have seen a boom in communication technology which has positively impacted almost every industry. Needless to say, the virtual platform was completely transformed once the Internet became an essential for everyone instead of a luxury.
Trading online was not always the most welcome activity because a lot of people were scared to place their trust on virtual trading platforms. The fear was justified to an extent because they would be trading with their hard earned capital.
Now that the Internet has become a much more secure place, traders are popping up all across the world. The number of Forex platforms has increased dramatically over the past few years, and all figures indicate that there will be more growth in the near future.
Why is Forex popular in the United States?
The United States is one of the places which has seen a rise in the number of Forex traders. There are different reasons for that. Firstly, it is one of the most advanced countries in the world, and hence online trading received more acceleration there than anywhere else. Moreover, the dollar is one of the most powerful currencies in the world. It has more importance than most other currencies because of its global validity, and hence any pair with dollar is called a major pair.
No matter where you live, you do not have to worry about undertaking a lot of trouble in order to become a Forex trader. The process is very easy to follow. All you need is capital and the will to succeed. The only things you need to keep in mind are that you have a lot to learn and that you will not become a millionaire overnight.
You can decide to go your own way and create a Forex account by yourself. If you have no previous experience in the field of Forex, then you might find yourself making bad decisions and suffering from losses. While that is natural when learning a new skill, you can take steps to prevent it as well.
The best thing to do would be to hire the services of a Forex broker who will be able to help you out in every way. With the rise in popularity of Forex trading, the number of brokers has also risen which means that you have a lot of options to choose from. Since it is a business association, you need to do your research before choosing a broker.
American Forex brokers are bound by a stringent laws and regulations which prevent them from offering much flexibility to clients. The US government is especially particular when it comes to the financial market because they want to ensure that all traders remain safe. There are a number of regulatory bodies in place which look over the relationship that clients and brokers have. Unless brokerages agree to abide by all the laws, they cannot be certified. And unless you hire the service of a broker who has been licensed by the government, you will be risking your finance.
As an alternative, a large number of Americans have chosen to use offshore broker services.
Why choose an offshore broker?
Offshore forex brokers conduct all their major operations overseas, which means they set up headquarters in a place that does not have a large number of regulations and constraints. Hence, people find it easier to trade foreign currencies and make profits.
Hiring an offshore broker will increase your chances of making greater profits because of the increased flexibility. Offshore online brokers are an extremely important part of the Forex market because they offer some space to traders who want to break out of the regulations imposed by the American government. They can take advantage of better trading conditions in a different part of the world.
There are a number of advantages of using offshore brokers instead of the ones in your country.
- You do not have to meet a lot of requirements as opposed to the list of boxes that you have to tick if you hire an American broker.
- The lower spreads and better leverages offered by offshore brokers will enhance your trading experience and give you more opportunity to earn profits.
- Offshore brokers offer valuable promotions that you might not otherwise get. This is because they are not tied up by different kinds of taxes and can transfer all savings to the traders.
- Since the offshore Forex Trading Market is huge in size and continuously growing, you will have better earning opportunities that on-shore brokers do not have access to.
- There are no limitations whatsoever which means that you can take up any trade that appeals to you and use any technique or strategy that you think fit.
- You will face lesser due diligence from traders.
If you are an American citizen, you might have faced some problems when hiring an offshore brokerage. This is because a large number of companies are not taking US clients anymore because of the problems and paperwork involved.
The Dodd-Frank Act, which is a federal statute that has been in operation since 2010, makes it compulsory for Forex brokerage companies to get licensed by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) if they want American clients. The government introduced this reform to establish greater control over the financial market but it has proved to be troublesome for brokerages which do not want to get involved with the US government and its stringent Forex laws. They find the regulations to be restrictive as they render them unable to provide any advantages to their clients.
Offshore Brokers Who Accept US Clients
The thought of having to adhere to all laws stated by these regulatory bodies has deterred a large number of offshore brokers from taking on US clients. But if you are determined to find hire an offshore broker, then you can consult any one of the following companies.
FX Choice (Belize)
The company acts as an NDD/STP broker, and functions all the way from Belize. They are regulated by the International Financial Services Commission (IFSC) Belize. Among the platforms they offer are MT4 on which you can get a classic account and MT4 and MT5 which offer pro accounts. You are good to go after making the initial deposit of 100 USD. With a good combination of spreads and leverage to offer, the brokerage has become a rather popular option among traders.
Finpro Trading (UK)
Finpro Trading (UK), an STP/ECN broker, functions from Europe. It is not regulated by the American regulatory bodies and takes up American clients gladly. You can create standard or PAMM accounts while availing the advantage of having segregated customer funds.
You will be able to trade in commodities, stock indices, ETFs, and bonds. The brokerage offers the following platforms:
- FinproStation ( Web and Mobile)
- Zulu Trader (Web and Mobile)
You have to make a minimum initial deposit of 100 USD for STP accounts and 200 USD for ECN accounts). The maximum leverage: you will get with these brokers is 200:1 which is a great deal. Finpro even accepts Bitcoin in case you are into cryptocurrencies.
These trusted brokers may not be regulated according to American requirements, but will definitely take you on a client if you are living in the US. They offer STP, which includes premium accounts and fixed accounts along with ECN which are basically zero accounts.
LMFX offers an MT4 platform so that you can trade with no hassle whatsoever. You can access WebTrader, iPhoneTrader and Android Trader through the platform which means that they have made provisions for both phone and computer users. You have to make an initial deposit of 50 USD or 50 EUR. The maximum leverage offered by the company is a whopping 1000:1 which means that you will be in a very good position.
FXGlory (Dubai, United Arab Emirates)
This market-maker or dealing-desk broker functions all the way from the UAE, and you will not regret hiring them. They are not regulated by any of the American bodies, which means that they have no laws to follow. Established in UAE 2011, the brokerage has continued to expand its services in Georgia and Bulgaria.
They offer the following platforms for your trading needs:
- MT4 mobile
- FXGlory Web Trader
- Optional free VPS
The best part about hiring this broker is that you will have to make a minimum initial deposit of just 1 USD, and in return, you can get leverage up to 3000:1.
Trader’s Way (Dominica)
This Caribbean broker offers dealing-desk (D/D) and ECN accounts among other things. It is not regulated by any official body which means that you can become a part of their community even if you are an American. You can access the MT4 or the MT4 mobile platforms for your trading needs. The minimum initial deposit for D/D accounts is just 0 USD, and 10 USD is charged for ECN accounts.
Do not give up hope, because there is always a way if you really want to be a Forex trader.