Underfunded fx daytrader looking for advice

S

skotten84

Hey guys,

So I am a retail trader currently making a living trading a small five figure account. Currently paying Interactive Brokers $14 a round trip per 100k lot of GBPUSD (as an example), plus a spread of +-1 pip, plus approx $50 a month to a charting provider for my data subscription.

I've been trading on and off for two years. Now doing it full time again for the last three months and want to make my next move.

I have been interested in changing to a prop trading firm for a while but am a little concerned at all the purported scammers and bewildered by the array of different alternatives.

My strategy is to take between 10 and 30 trades per day in one of the major fx pairs, risking 5 pips to make at least 5-10. As you can imagine the commissions are killing me with this strategy, even though I am highly profitable!

I am essentially first and foremost looking for a better alternative to my retail broker, cheaper commissions and lower spreads, am willing to put up 2-5k risk capital, and hoping for the option of progressing! I'm not interested in paying $1000s to be taught how to position trade based on fundamentals.

I am a UK citizen with no formal financial education currently on an extended holiday in South Africa.

Thanks for reading, any advice welcome!

Regards

Angus
 
I have a couple of things to offer you here:
1) Interactive Brokers charges 0.2 pips per trade, so 0.4 pips roundtrip. This means commissions should only be $4 per roundtrip, not $14.
2) The spread I am seeing on GBPUSD right now outside of London market hours is 0.7 pips on Interactive Brokers. I expect during market hours the spread would be even tighter.
3) Interactive Brokers offers free forex data. Not sure why you would pay somebody else for data.

Did you sign up to Interactive Brokers through an Introducing Broker? Your trading terms don't seem to be as good as what is generally available through that broker.

With an account as small as yours, I'm not sure you will be able to get much more favourable terms.

Ian
 
The best thing you can do is withdraw the money from your account, then convert it to cash. next, put it in your BBQ grill, douse with lighter fluid, and light it up. That will be much quicker than the inevitable result you will get, and free you up to do other stuff much more quickly.
 
ianlav said:
I have a couple of things to offer you here:
1) Interactive Brokers charges 0.2 pips per trade, so 0.4 pips roundtrip. This means commissions should only be $4 per roundtrip, not $14.
2) The spread I am seeing on GBPUSD right now outside of London market hours is 0.7 pips on Interactive Brokers. I expect during market hours the spread would be even tighter.
3) Interactive Brokers offers free forex data. Not sure why you would pay somebody else for data.

Did you sign up to Interactive Brokers through an Introducing Broker? Your trading terms don't seem to be as good as what is generally available through that broker.

With an account as small as yours, I'm not sure you will be able to get much more favourable terms.

Ian
More...

Wow thanks I genuinely (somewhat naively) had no idea that I was getting such a bad deal through my introducing broker! (The data subscription was for US and UK equities plus intraday emini data).

Have found a different retail broker who can offer me a much better deal! MB Trading offer tighter spreads and very cheap trading if you place a lot of limit orders.
 
MrN said:
The best thing you can do is withdraw the money from your account, then convert it to cash. next, put it in your BBQ grill, douse with lighter fluid, and light it up. That will be much quicker than the inevitable result you will get, and free you up to do other stuff much more quickly.
More...

Hahaha aaaaawwwwww did somebody blow their account?! So instead of trading you now spend your time hanging around forums insulting others? Shame man. Bless you brother, hope you find a style that works for you and learn to make some money.
 
skotten84 said:
Wow thanks I genuinely (somewhat naively) had no idea that I was getting such a bad deal through my introducing broker! (The data subscription was for US and UK equities plus intraday emini data).

Have found a different retail broker who can offer me a much better deal! MB Trading offer tighter spreads and very cheap trading if you place a lot of limit orders.
More...

Glad we cleared that up. MB Trading is a pretty good pick as retail forex brokers go. They have a better regulatory record than Interactive Brokers, and offer competitive trading terms. Their one black spot is that they have much lower capital reserves than Interactive Brokers. They have also been busted by the CFTC for not meeting their regulatory capital reserve minimums. This kind of thing matters during events like this January's Swiss franc debacle. If your broker runs out of capital, they can use client account balances to pay their creditors and you may have trouble getting all of your account balance back. This has happened in the past with other brokers who have gone under. Just want to ensure you are aware.

Details at this review page, and the overall picture for retail forex brokers, though note the site only covers US brokers. I think you can also get updates on MB Trading's capital reserves from the CFTC web site, as all brokers are required to submit that data to the CFTC monthly.

Happy trading.
 
First off if you are a UK citizen, why are you not considering a UK based forex broker? Under FSA (now known as FCA) rules, client money is kept in segregated accounts and may not be dipped into by the broker. That is a better level of protection than you will get in the US.

If you particularly do not want a UK broker, look into Dukascopy Switzerland, min USD10K. They have a commission based offering, so do the math. You have the option of Dukascopy Euro subsidiary, but they are registered in Latvia and that doesn't fill me with confidence.

I use Oanda Asia Pacific as I'm out in Thailand, no complaints so far. They have a UK operation so look into that if you like.
 
ianlav said:
Glad we cleared that up. MB Trading is a pretty good pick as retail forex brokers go. They have a better regulatory record than Interactive Brokers, and offer competitive trading terms. Their one black spot is that they have much lower capital reserves than Interactive Brokers. They have also been busted by the CFTC for not meeting their regulatory capital reserve minimums. This kind of thing matters during events like this January's Swiss franc debacle. If your broker runs out of capital, they can use client account balances to pay their creditors and you may have trouble getting all of your account balance back. This has happened in the past with other brokers who have gone under. Just want to ensure you are aware.

Details at this review page, and the overall picture for retail forex brokers, though note the site only covers US brokers. I think you can also get updates on MB Trading's capital reserves from the CFTC web site, as all brokers are required to submit that data to the CFTC monthly.

Happy trading.
More...

Thanks for your productive and helpful posts Ian! I wasn't aware one could check up on a broker's capital reserves.

Question, why do you think MB charge no commission and even pay out $0.50 per limit order? Do you think it's because they just match up your limit orders with other retail trader's market and stop orders in-house?
 
Wow lucky you,
justrading said:
First off if you are a UK citizen, why are you not considering a UK based forex broker? Under FSA (now known as FCA) rules, client money is kept in segregated accounts and may not be dipped into by the broker. That is a better level of protection than you will get in the US.

If you particularly do not want a UK broker, look into Dukascopy Switzerland, min USD10K. They have a commission based offering, so do the math. You have the option of Dukascopy Euro subsidiary, but they are registered in Latvia and that doesn't fill me with confidence.

I use Oanda Asia Pacific as I'm out in Thailand, no complaints so far. They have a UK operation so look into that if you like.
More...

Wow lucky you! I love Thailand! Would go back in a flash.

OAP lol. How are their spreads commissions and customer service?
 
skotten84 said:
Wow lucky you,


Wow lucky you! I love Thailand! Would go back in a flash.

OAP lol. How are their spreads commissions and customer service?
More...

Right now during London market hours EUR/USD has a 1.1 to 1.3 pip spread, USD/JPY 1.3 to 1.5 pips. There are no commissions. I trade on limit orders and slippage is minimal, in my favour sometimes, but I do not trade news releases.
 
You must log in or register to reply here.
Back
Top