FXCM Micro Withdrawls

[T-Bone Trader]

Are S&P futures brokerages like this as well?

This whole hedging thing, I mean.....

If this is the case, my best bet would be to close my fx account and open a futures trading brokerage account, no?

I'm really in it for the leverage....

What are the realistic chances that a firm like FXCM becomes insolvent in your opinion?

 

[Surdo]

Quote from T-Bone Trader:

Are S&P futures brokerages like this as well?

ES trades on CME/GLOBEX, a regulated exchange!
Your broker does not take the other side of your trades and bet against you.

Small difference.

 

[Eric215]

Quote from kxvid:

All of these micro accounts can be funded with a credit card. As a rule of thumb if you can fund a brokerage account with a credit card stay away.

I disagree with this statement. How an FCM or FX dealer allows its clients to fund their accounts makes no difference. You can either make money trading FX or you can't. How you fund the account makes no difference.

 

[cabletrader]

Quote from Eric215:

I disagree with this statement. How an FCM or FX dealer allows its clients to fund their accounts makes no difference. You can either make money trading FX or you can't. How you fund the account makes no difference.

That's because you don't understand the psychology behind it.

Retailing is a complex and fascinating business, shops will use any advantage they can get.

If these micro and nano lot bucketshops accepts credit cards then it suggests they're more interested in helping you spend money rather than make any, the implication I would have thought is obvious.

There, you've learned something today

 

[Eric215]

Quote from cabletrader:

That's because you don't understand the psychology behind it.

Retailing is a complex and fascinating business, shops will use any advantage they can get.

If these micro and nano lot bucketshops accepts credit cards then it suggests they're more interested in helping you spend money rather than make any, the implication I would have thought is obvious.

There, you've learned something today

What are you talking about? Here is the quote I was referring too, "All of these micro accounts can be funded with a credit card. As a rule of thumb if you can fund a brokerage account with a credit card stay away." This quote is stating that just because a dealer allows its clients to fund an account with a credit card, which I have done in the past, this some how means a trader should not trade there. So I will state it again, so that you might learn something, it MAKES NO DIFFERENCE how a trader funds his/her account, they can either make money or they can't. This fact could not be more simple to understand. Whatever psychological underpinning you think FXCM or whoever is using to market their product again makes no difference as to whether or not someone should trade through them. Your "reasoning" is like saying that a poker room has an ATM machine by the door when you walk in so you shouldn't play poker there. It is actually preferable for responsible traders to have multiple ways to fund an account. Your basically stating that the easier a dealer makes it to fund an account the more you will lose, lol. No offense cabletrader but your posts always seem a bit arrogant, to say nothing of ignorant. You have commented on my past posts in this manner and so again I will tell you, please try to actually think through the post in question before getting condescending. There is nothing more annoying on these boards then people who are arrogantly and proudly ignorant.

 

[cabletrader]

Quote from Eric215:

You have commented on my past posts in this manner....

Yes, and so far you've never been able to respond, you seem to make these types of outrageous claims and ill thought out arguments and when challenged you're simply at a loss and can't support your opinion. I doubt this will be any different than the 'hedging' thread which you abandoned.

Let me educate you about an issue you're trying to be smart about, you obviously lack any knowledge on the subject (or common sense it seems!)

Brokers who accept credit cards to fund a trading account don't do it primarily for their clients convenience. It's a researched fact that people spend more on their credit card than if they were paying with cash or taking it from their bank account (ie check or debit card). That's not opinion, it's fact. Retailers spend millions on researching consumer spending patterns so they can squeeze every last cent out of you when you visit their outlet, hence the offer of store cards, instant credit, interest free credit and the like. 'Have now, pay later' encourages the average consumer to spend more. That's the psychology of it.

For traders it's a slightly different scenario, same approach but with a twist. Traders who use a credit card to fund their account tend to look on it as free money, they're only borrowing it until the credit card statement lands on the mat. At worst they believe their trading activities will at least pay in excess of the interest so they're quite happy to max out their card and pay it back from their trading profits. If they were spending 'real' cash it comes straight out of their pocket so they tend to be more careful, ie spend less.

The benefits to a broker are obvious and that is their primary motive for offering credit card facilities. There are plenty of equally convenient methods of funding an account without using a credit card.

Bottom line is a card-accepting broker wants you to spend more, and chances are he'll do everything and anything in his power to ensure that happens, he's not in the cash-back business!

There, hopefully you've learned something but somehow I doubt it!

 

[kxvid]

Quote from Eric215:

What are you talking about? Here is the quote I was referring too, "All of these micro accounts can be funded with a credit card. As a rule of thumb if you can fund a brokerage account with a credit card stay away." This quote is stating that just because a dealer allows its clients to fund an account with a credit card, which I have done in the past, this some how means a trader should not trade there. So I will state it again, so that you might learn something, it MAKES NO DIFFERENCE how a trader funds his/her account, they can either make money or they can't. This fact could not be more simple to understand. Whatever psychological underpinning you think FXCM or whoever is using to market their product again makes no difference as to whether or not someone should trade through them. Your "reasoning" is like saying that a poker room has an ATM machine by the door when you walk in so you shouldn't play poker there. It is actually preferable for responsible traders to have multiple ways to fund an account. Your basically stating that the easier a dealer makes it to fund an account the more you will lose, lol. No offense cabletrader but your posts always seem a bit arrogant, to say nothing of ignorant. You have commented on my past posts in this manner and so again I will tell you, please try to actually think through the post in question before getting condescending. There is nothing more annoying on these boards then people who are arrogantly and proudly ignorant.

Credit cards have a high cost of doing business. Any merchant will tell you it costs minimum 2%, usually more like 3%+ to process credit card transactions. Not to mention charge back costs. Yet they do not pass on those costs to the customer. Any shop that accepts credit cards is being run more like an online casino than a legitimate brokerage. I do not know of a single SPIC insured brokerage that accepts credit card deposits. That alone should tell you something.

Quote from T-Bone Trader:

So which fx firms would you recommend then? Thanks in advance!


Also, you mention that these firms can become *insolvent* by not hedging...don't these firms have NFA-requirements or something like that to prevent that? Sorry for the weird questions - your response is freaking me out a little bit about FX.....so I could be the best fx trader...and if my firm goes belly-up - I still won't have a cent??? Even if my fx trading account is something like $85,000???

If your firm goes belly up, you are out of luck. Now your money is relatively safe with a major player like FXCM or Oanda. But there is other reasons that you shouldn't trade with either such as stop hunting, platform issues, and spread jacking.

Basically I wouldn't deposit more than a small amount of money that I could afford to lose at ANY bucketshop.

There are ways to trade forex that are very safe, such as trading forex currency futures. Also trading through a SPIC insured ECN such as Interactive Brokers which routes FX orders to the real market, so they won't gain from your losses.

Even if you choose to trade at a well known bucket shop, its infinitely more likely for you to lose money to the market than from your brokerage going under. Forex is a very very hard market to trade due to extreme volatility and unpredictable movements. In my opinion beginners would be much better suited starting out trading stocks, or index futures than forex. Plenty of opportunity in those markets, and much easier to trade.

 

[Eric215]

Quote from cabletrader:

Yes, and so far you've never been able to respond, you seem to make these types of outrageous and ill thought out claims and when challenged you're simply at a loss and can't support your opinion. I doubt this will be any different than the 'hedging' thread which you abandoned.

Let me educate you about an issue you're trying to be smart about, you obviously lack any knowledge on the subject (or common sense for that matter!)

Brokers who accept credit cards to fund a trading account don't primarily do it for their clients convenience. It's a researched fact that people spend more on their credit card than if they were paying with cash or taking it from their bank account. That's not opinion, it's fact. Retailers spend millions on researching consumers spending patterns so they can squeeze every last cent out of you when you visit their outlet.

For traders it's a slightly different scenario, same approach but with a twist. Traders who use a credit card to fund their account tend to look on it as free money, they're only borrowing it until the credit card statement lands on the mat. At worst they believe their trading activities will at least pay in excess of the interest so they're quite happy to max out their card and pay it back from their trading profits. If they were spending 'real' cash it comes straight out of their pocket so they tend to be more careful, ie spend less.

The benefits to a broker are obvious and that is their primary motive for offering credit card facilities. There are plenty of equally convenient methods of funding an account without using a credit card.

Bottom line is a card-accepting broker wants you to spend more, and chances are he'll do everything and anything in his power to ensure that happens.

There, hopefully you've learned something but somehow I doubt it!

Ok, this is the last time I will state again what I stated above. If you don't get it then I don't know what else to tell you. Here, again, is the quote that I was responding too, "All of these micro accounts can be funded with a credit card. As a rule of thumb if you can fund a brokerage account with a credit card stay away". So, again, this quote is implying that if a dealer offers credit card funding that a trader should not trade with that dealer. Now, please cabletrader, read the quote. I am not debating how people or traders use credit cards or how a business uses different and easier tactics to fund an account as a marketing scheme to attract more traders. This part I agree with. What I don't agree with is that by a dealer offering credit card funding some how a trader has a disadvantage by trading there. Let me put it veeerrrry simply so maybe you can understand. If I fund two accounts, one with a $1000 wire transfer and one with a $1000 credit card charge and I place the exact same trades in each account, I WILL MAKE OR LOSE THE SAME MONEY IN BOTH ACCOUNTS. So, aside from ranting about how dealers are using marketing to lure new clients, give me one disadvantage to a profitable trader for using a dealer that allows credit card funding?? Like I've said from the beginning, and I will quote my original comment, "How an FCM or FX dealer allows its clients to fund their accounts makes no difference. You can either make money trading FX or you can't."

So the question stands cabletrader, give me one disadvantage to a profitable trader for using a dealer that allows credit card funding??


And as far as leaving the other hedging thread, I don't have time to continually debate with people who don't get it no matter how many times I say it.

 

[cabletrader]

Quote from Eric215:



marketing scheme to attract more traders.


If I fund two accounts, one with a $1000 wire transfer and one with a $1000 credit card charge and I place the exact same trades in each account, I WILL MAKE OR LOSE THE SAME MONEY IN BOTH ACCOUNTS.


dealers are using marketing to lure new clients

lol, too funny, read my previous post and if you're too stupid to understand the issue then I'm not sure how else I can explain it.


Here's a clue...
Bottom line is a card-accepting broker wants you to spend more, and chances are he'll do everything and anything in his power to ensure that happens, he's not in the cash-back business!


It appears you're more interested in trying to be right than actually trying to understand.


.....sheeesh, there are some incredibly stupid people in this business, no wonder the failure stats are so high!

 

[Eric215]

Quote from cabletrader:

lol, too funny, read my previous post and if you can't understand the issue then I'm not sure how else I can explain it.

It appears you're more interested in trying to be right than actually trying to understand.


.....sheeesh, there are some incredibly stupid people in this business, no wonder the stats are so high for losers!

Again, more insults, what a surprise. I'm not trying to be right, I'm just defending my original true statement from someone who arrogantly attacked it. If you would have had a different, more respectful, tone to your first point this discussion would have gone totally different. Maybe it would have been a civilized debate. Lastly, I am not going to get into how profitable I am because if I told you the truth you wouldn't believe me anyway. I have been trading for over nine years and FX full-time for about four with mine and OPM, so you can use your imagination. I post comments on these boards because I have time to fill during the trading day and like to help out newer traders. Either way, good luck sir.