Baron Forex Review

I came across a unique MT4 broker about a month ago called Baron Forex. I generally like to try out places that offer something different from the standard fare. Baron Forex is headquartered in Belize, which in itself could be seen as a disadvantage from a legitimacy standpoint, but they are regulated by the IFSC. The fact that they are located in Belize also has other advantages due to its offshore location.

The two main draws that Baron Forex has is that they offer options as well as spot forex trading, and that they offer fixed spreads (under all market conditions) that are quite low compared to other market makers who keep their spreads fixed. Normally, most market makers who give their clients fixed spreads do so at the expense of a few extra pips and/or poor execution in illiquid markets. I have not noticed this while trading with Baron Forex - I even got filled without slippage on my stop loss order during the NFP release yesterday (not that I was particularly happy about it, but that's how it goes sometimes - at least my order was filled at the price I set).

I have not tried making any withdrawals yet so I can't comment on how successful that will be. I am experiencing a bit of a drawdown over the past few weeks, so chances are I won't be making a withdrawal any time soon anyway :). I don't foresee any problems, but I was a bit disappointed with the lack of withdrawal methods available and the associated fees - unless you trade high monthly volume, they will charge your for wire transfers and CC withdrawals, and those are the only 2 methods available. I would suspect that they will add a few more deposit/withdrawal methods in the near future. Baron Forex has only been around since 2008 so they probably still have a few kinks to work out in their back office.

Finally, Islamic traders can be accommodated with swap-free accounts, but again, extra charges do apply unless you trade high monthly volumes. They really do make every effort to increase clients' trading volume, which is understandable considering it's their bread and butter.

Overall, I would say that news traders should take advantage of the trading conditions on offer here: the combination of low, fixed spreads and excellent execution probably won't be around for long. Once they see the risk that exposes them to, they are bound to change some part of that deadly cocktail.

PROS:
Well-known MT4 platform;
Regulated offshore broker;
Low, fixed spreads;
News traders' and scalpers' best friend;
Great execution even in illiquid conditions (NFP!);
Trade options as well as spot FX;

CONS:
Haven't been around very long (2008);
Not many deposit/withdrawal methods;
Can't trade anything less than a mini-lot (10,000 units);

Quick Facts:
Headquarters in Belize;
Metatrader 4 (MT4) platform;
2 pip fixed spread on EUR/USD;
Established in 2008;

If you are interested in opening an account at Baron Forex, please click here.

MIG Investments Review

MIG Investments, or MIG fx, is a Swiss forex broker, regulated by ARIF. It offers fair trading conditions in one of the most tightly regulated environments in the world. It should be noted however, that ARIF regulated companies are not required to disclose their company capitalization records, and are not required to segregate client funds from company operating capital. They are one of the few non-US brokers that allow US residents to open accounts though opening up a great option to wealthy American investors.

Besides spot forex, MIG Investments also gives traders access to gold (XAU/USD) and silver (XAG/USD) trading through its Metatrader 4 (MT4) platform. Since Metatrader 5 (MT5) is due out soon, I enquired about when MIG Investments was planning to make the switch, but got no real answer, so we'll just have to wait and see (FYI, I hear Alpari is going to be one of the first MT dealers to make the switch).

Anyway, my trading with MIG Investments has been going quite well. Since there is nothing dodgy about them, I figured I was safe opening a fairly large test account with them ($5,000). If I really wanted to try them out I didn't really have a choice anyway, since minimum account opening is $2,500 for Standard accounts, and it goes up from there to $100,000 for a Professional account and $500,000 for an institutional account.

All trades are cleared through UBS, so liquidity is ample, at least for a $5,000 account holder. Maximum trade sizes are 200 standard lots (20,000,000 units) which is further proof that liquidity shouldn't be a problem even for big accounts. Scalping is discouraged, as is the case with all market makers, but I did close a few profitable trades in very short order and did not receive any warnings and no funds have gone missing from my account, so they are not absolute nazis about it.

All in all, I think MIG Investments offers a very safe and fairly inexpensive (2 pip variable spreads on EUR/USD) entry into the forex market, but capitalization is key. Much like Swiss banks, their brokers also seem to have set the bar pretty high with regards to who they do business with - that $500 micro account you wanted? Sorry, your money is no good here. With a half-mil account, you get better spreads (1 pip on EUR/USD), direct access to their market research team (not sure how worth it that is) and they will even program you EAs for you (I don't see why they choose to take on that responsibility... but they do).

PROS:
Allow American account holders - combined with Swiss secrecy and high standards;
Decent spreads;
Deep liquidity and good execution;
MT4 platform;
Gold and Silver trading;
Swiss regulation (ARIF);
$1.5 rebate per 100,000 RT on Pro accounts;

CONS:
They won't talk to you if you're poor;
Limited number of tradeable instruments;
Accounts not segregated;
No scalping policy;

Quick Facts:
Headquarters in Neuchatel, Switzerland;
Metatrader 4 (MT4) platform;
2 pip variable spreads on EUR/USD (Standard & Pro accounts);
1 pip variable spreads on EUR/USD (Institutional accounts);
Liquidity provided by UBS;
Established in 2003;

To open a 90 day demo account, please visit MIG Investments SA. Thanks for stopping by.

HY Markets Review

I opened an account with HY Markets just over a month ago and have had a really good run trading with them. I would like to warn anyone who thinks of day-trading with these guys though - don't! Besides the no scalping policy, HY Markets has unusually high spreads, particularly for smaller accounts, so if you are in and out of trades often, your costs will add up very quickly. They offer 3 types of accounts:

• Mini - $50 min. deposit, 2,000 unit min. trade size, 7 pip variable spread on EUR/USD;
• Standard - $750 min. deposit, 10,000 unit min. trade size, 5 pip variable spread on EUR/USD;
• Premium - $2,500 min. deposit, 100,000 unit min. trade size, 3 pip variable spread on EUR/USD;

I had a Standard account, and was really feeling it every time I opened a trade. I had a strong run of trades which made it seem insignificant, but I know that if I had had a string of losses, those costs would have been unbearable. The Premium account, while offering slightly better spreads (although still higher than most brokers), has the disadvantage of standard lot deal sizes. There is no way someone with a $2,500 account could handle standard lots, so I find the combination to be somewhat predatory in nature - they push traders to upgrade their accounts by providing better spreads, but then screw them by making them over-leverage due to huge minimum deal sizes.

Still though, a trader has only himself to blame if he is taken in by such practices. An experienced trader would never allow himself to be taken advantage of like that. The fault ultimately lies with you if you agree to such trading conditions.

On the positive side, for those who are well capitalized and/or don't mind the high spreads (read, longer-term traders), HY Markets offers investors a solid package, mostly because of the vast array of tradeable instruments on tap. You can trade anything from silver to cocoa to IBM to EUR/USD on the HY Markets MT4 platform. The best thing about it is that because of the way HY Markets structures their CFDs, all the instruments can be traded long or short at any time.

HY Markets also provides the safety offered by an FSA (UK) regulated broker and the financial stability of a well capitalized business that has been in the finance world since 1977.

These facts alone can easily overcome the negatives, particularly for those who are not necessarily just looking to trade forex, but other instruments.

PROS:
Safety of FSA regulation (FSA #186171);
Long-term business commitment;
Well capitalized;
Client funds are segregated from company operating capital;
Staggering array of tradable instruments;
Ability to long and short any of the instruments available;
Stop losses guaranteed against slippage;
Swap-free accounts available to Islamic traders;
Deposits and withdrawals available by Visa and MasterCard;

CONS:
Ridiculously high forex spreads for Mini and Standard accounts;
Mediocre swap rates;
Inflexible deal sizing for Premium accounts;
No demo accounts available;

Quick Facts:
Henyep Investment (UK) Ltd. in business since 1977;
Offices in London, Dubai and Hong Kong;
Downloadable (MT4), Browser, and Mobile (Pocket PC) trading platforms available;
Deposits and withdrawals by Visa, MasterCard, PayPal, Wire Transfer;
Maximum Leverage 200:1 on all account types;

If you would like to open an account, please visit HY Markets. Thanks for stopping by!

AvaFX Review

If you are looking for an offshore forex broker, I would recommend giving AvaFX a chance. AvaFX is a recent entrant into the forex arena, but has built a solid reputation among traders. Over the past few weeks, I found out first hand why that's the case. Although the company is not regulated by any government body, it is audited by Ernst & Young, which adds a layer of legitimacy to it. It is also owned and operated by a large instituion - Clal Finance Ltd., with over $17 billion under management. This is also where the liquidity comes from.

To be quite honest, I could find no serious flaws with any aspect of AvaFX. Maybe it's because of the nightmare I had with the last broker I reviewed, but I don't think so. Everything I tried seemed to work well - even extremely fast trading is accepted, which is fairly unusual for a market maker, particularly one that fixes their spreads. There were some execution problems as a result of the fixed spreads during fast market moves, but this is to be expected.

The fact that Islamic friendly no-swap accounts are available at no extra charge, and to the general public (no need to "prove" your religion) is a bonus to those seeking this type of account. There is also a wide range of instruments at your disposal, from a few exotic spot currency pairs to quite a few commonly traded CFDs. A wide variety of deposit and withdrawal methods are available, and no administrative fees apply to any transactions (although there is a $500 minimum wire transfer withdrawal limit). All transaction methods are listed in "Quick Facts" below.

Depending on your trading preferences, you can choose between 3 platforms:

1. Ava Trader - a downloadable trading platform, which is the most stable;
2. AvaJava - a Java platform which runs in your browser and is Mac compatible;
3. AvaMobile - an i-Mode or WAP application that can run on any internet capable mobile phone;

PROS:
Stable, functional, versatile platform;
Fixed Spreads;
Loads of tradable instruments, including many common CFDs;
Swap-free "Islamic" accounts avalable with no extra charges;
Offshore location;
Financially stable ownership;
Excellent customer support;
Large bonus for first deposits (up to $1,200 in free cash);

CONS:
Unregulated broker;
Mediocre liquidity and execution;
In business only since 2006;

Quick Facts:
Offices in the British Virgin Islands (BVI) and Cyprus;
Deposits/withdrawals by Diners Club, MasterCard, Visa, Moneybookers, NETeller, PayPal, WebMoney and Wire Transfer - all with no fees;
Maximum Leverage 200:1;
Minimum trade size 5,000 units (0.5 mini lot);
Fixed spreads, EUR/USD spread 3 pips (0.0003);
AvaFX customer support available in Arabic, Chinese, Dutch, French, German, Italian, Japanese and Spanish;

If you would like to open an account at AvaFX, please click here. Thanks for stopping by!

ForexGen Review | ForexGen SCAM WARNING!

OK so I tried to find myself another decent swap-free broker and I came across a "company" called ForexGen. This is the reason I haven't been posting a lot lately - this scam has completely taken up my time.

From day one I could tell there was something fishy about this broker - from stolen copy on their website, to an agreement that makes very little sense etc... They are based in Norway, which I thought was a pretty safe bet, since the Scandinavian countries are known for their tough stance on crime. I thought wrong. Luckily my hunches stayed in the back of my head and I kept my account very small. This is what happened:

I opened an account and deposited some money. They took $10 out as a "deposit fee" (who does that?). OK, fine. Then I started trading. Opened a position on EUR/USD and set my exit orders as per my trading strategy, just like a good little trader ought to. The next day, the market came close to hitting my stop loss, but didn't. About 48 hours after that, my take profit target was hit, and I was a happy trader. But wait - my position didn't close. I checked my orders and they were all right. I checked the current price and it was more than 20 pips beyond my take profit order. OK, I said to myself, why not take the extra 20 pips this broker just handed to me, and close the position manually right now. No such luck. Their MT4 platform kept returning "Off quotes" and similar messages when I tried to close the position.

Then I had a brilliant idea. I figured there was something wrong with their order execution system, so I tried to "hedge" my position by opening an equal and opposite trade, in order to lock in my profits and become market neutral. Execution was terrible, but the market kept moving in my direction so when I finally got my hedge in (about 15 minutes and another 20 pips later) I breathed a sigh of relief. I could now let the broker figure out what went wrong, and everything would be just fine.

WRONG. When I tried to log in the next morning, my account had been shut down. Now I started getting a really bad feeling about this whole situation. I tried contacting the broker with no success - their customer support staff are useless. I requested withdrawals, pleaded, cried and threatened, to no avail.

To make a long story short, I ended up receiving my original deposit back several weeks after the events described above had taken place, and even that only after reporting the company to local authorities. My profits had disappeared. The authorities had already been informed of this operation and were "investigating" it when I had contacted them. Yet somehow, this operation is still in existence today.

I hereby WARN anyone considering opening an account with ForexGen - I urge you to reconsider. This is not just a badly run business - it is a deliberate scam, and the authorities in Norway are simply too inept or too corrupt to deal with it in any meaningful way.

Alpari Review

I would like to note first that the Alpari I'm talking about here is a separate company from Alpari UK and Alpari US, although the strings are pulled by the same Russian puppet masters. Alpari is run by Russians as a Seychelles company until recently (now a New Zealand company). I somehow seem to always find myself faced with a possibly dodgy situation to trade in. Maybe it's just that trading itself has lost its excitement, so I am looking for another thrill... But to be quite honest, I have had a much better experience trading with Alpari than with brokers found in much more "reputable" places. I will talk more about that in my next post, as there is a broker I have gotten myself into quite a dispute with. I have to give them a chance to unbreak my account before spewing vitriol about them, but stay tuned, it's coming.

Anyway, this post is about Alpari, and Alpari is well known among the hardcore retail forex traders as being very fair when dealing with trading disputes or ambiguities. Alpari is also well known among the same group of traders as having the best quality free historical charts data available. As a result, most people doing backtests on their MT4 Expert Advisors use Alpari data, unless they can bankroll some paid data, which is rare in the case of retail traders.

I have had personal experience with Alpari now, and can confirm that most of this reputation comes for a reason. There have been no disputes yet, so I can't report on that right now, but I have had all my orders respected to the pip so far. Combined with low spreads and a wide range of instruments to trade, Alpari is as competitive as any other MT4 broker out there. If you like MT4, then there is no reason not to give Alpari a try. Good reputation, low spreads, tons of instruments to trade, and a well-known, reliable trading platform are what you can expect from this broker.

PROS:
Stellar reputation for resolving disputes in a fair and logical manner;
MT4 platform ease of use and reliability, as well as automated trading heaven;
Lots of tradable instruments (see Quick Facts below);
Low spreads (from 1.8 pips on EUR/USD);
Been around since 1998;

CONS:
Unregulated, capitalization unknown;
MT4 platform lack of features;
Dodgy legal setup;

Quick Facts;
Tradable instruments: 51 spot currency pairs, CFDs on various US stocks, CFDs on index shares, CFDs on futures on stock indexes, CFDs on commodities and precious metals, etc.;
Headquarters in New Zealand and Moscow, Russia;
Target spread on EUR/USD is 1.8 pips (0.00018);
Established 1998;
Metatrader 4 (MT4) platform;

If you would like to open an account at Alpari, please visit their website.

New Reviews Coming Soon

I've been away for a little while, but have been actively trading and testing out a few new brokers. I just wanted to let everyone know that I'm in the process of reviewing several different brokers, including ForexGen, Alpari, and a few others. My live accounts are in place, but it takes a little while to get a good sense for each broker, particularly when it comes to processing withdrawals. I also like to test each broker over a number of different trades and in different market conditions, which also makes my reviews a lot more accurate for my readers.



Please check back in a few days or better yet, subscribe to my Atom feed.

FXCM Review

FXCM was one of the first brokers I ever opened an account with. At the time I didn't have much to compare it to, but it seemed like a decent package. Everything worked, and it was easy to learn the ropes and it was easy on the eyes. It was not until much later that I learned just how powerful FXCM's Trading Station really is, at least in comparison to a lot of the other platforms out there. Don't get me wrong, I am not saying that everything about FXCM is peachy - it isn't - but the platform itself really is one of the best out there. It has everything a professional trader would desire, such as great charting, one-click trading, many different order types and execution preferences. It has all the flexibility a trader could desire, and not much in the way of complexity. It is very easy to use, and has a distinctively short learning curve.

When it comes to actual trading conditions and customer support, FXCM does fairly well, too. I understand that when I am doing business with a big company such as this, I have to expect a certain amount "canned response" type stuff from their front line support guys. That is always the disadvantage of dealing with a big company - they simply don't care about you - there are a million other clients to think about, each being equally unimportant. FXCM was not much different, but they do get things done when you press them.

I had an experience, early on in my forex trading career, before I knew much about trading. It went something like this:

I had opened a trade on USD/CAD and was looking for a short score of like 20 pips. I didn't know how far I would let the trade go against me before deciding to turn tail and taking the loss, I hadn't thought it through that far. I figured I would know when to get out, and anyway, the trade was definitely going my way. As it turned out, the trade didn't go my way. In fact, nothing went my way. Soon after a strong burst against my position, my internet connection passed out. I almost did too... What was I supposed to do? I couldn't even see my baby!

So I called up FXCM phone dealing and they closed out my trade very quickly and efficiently. There was no long procedure or waiting on hold, or anything of the sort. I was connected right away and they understood exactly what I wanted to do and did it without any problems. I was quite impressed. Although I was a novice trader (to put it mildly) I knew a quality product when I saw one. To this day I still use my FXCM account for certain types of trades.

PROS:
Excellent trading platform functionality, ease of use, and reliability;
Good execution;
Good customer support and phone dealing;
Regulated and well-capitalized broker;

CONS:
No guaranteed order fills - you get what the market gives you;
Lack of tradeable currencies - no exotics, oil or gold;
Large, faceless company that doesn't care about you;

Quick Facts:
Offices in New York, London, Hong Kong and Tokyo;
Accepts deposits by ACH (US), Visa, MasterCard, Wire Transfer, Check;
Maximum Leverage of 200:1 on all retail accounts;
Server-side trailing stops, OCO and if/then orders available;
Scalping OK;
Account can be held in any of the following currencies AUD, CAD, EUR, GBP, JPY, NZD, USD;

If you would like to know more, please check out this FXCM Review as well.

Finexo Review

I had heard some really good things about Saxo Bank and had been looking at opening an account when i came across Finexo. Finexo is a white-label partner of Saxo, and as such I didn't really expect to get anything from them that I couldn't already get at Saxo. To my surprise though, I found that Finexo offers up tighter spreads on EUR/USD (because they give up a bit of their commission, as I found out later). They offer a few other advantages over Saxo, most of which translate into better trading conditions for many retail traders. For those of you who have traded Saxo, you know that there is a learning curve to the platform. It is powerful, but difficult - with great power come great headaches. Finexo gives you a much easier-to-use platform, and it's browser based so even you Mac guys out there can play. The downside is that it doesn't offer all the reliability of SaxoTrader.

Along with all that they also accept more payment methods for those of you who use PayPal instead of a private bank in the Cayman Islands. I found the trading conditions to be quite good since they tap Saxo's liquidity. Overall, it feels like a small brokerage but with the backing of a large institution when it comes to liquidity and financial stability.

NOTE: Although I had some doubts in my mind about their connection to the British Virgin Islands, the fact that they are backed by a well-known broker alleviated most of my concerns. My hunch was correct, and all my deposits and withdrawals went without a hitch.

PROS:
Wide variety of deposit/withdrawal methods;
Decent spreads;
Scalping is allowed;
Easy to use platform;
Mac-compatible platform;
Deep liquidity (Goldman Sachs, Dresdner Kleinwort Wasserstein, Deutsche Bank, Marex Financial);
and UBS.;
Orders are processed through an automated dealing desk according to the "Best Execution Policy";
Server-side trailing stops;
OCO and if/then orders available;

CONS:
Platform reliability is questionable;
No automated trading;
Registered in the British Virgin Islands - a bit shady;
No Islamic swap-free accounts;
No oil, gold, or exotic currencies;

Quick Facts:
Finexo is a white-label partner for Saxo Bank;
Registered in British Virgin Islands and Germany;
Regulated by BaFin (Germany) with ID 108861;
In business since 2003;

For more detailed information, you can visit this Finexo Review, or visit their website here.

Oanda Review

As one of the most respected retail forex brokers out there, Oanda is certainly worth a look for most serious traders. While trading short-term with Oanda, I found that the execution was excellent during all market conditions. Having said that, however, Oanda does seem to "massage" their spreads into getting wider than most during news times. I am not particularly fond of news trading however, so this is not a big deal for me. I would not recommend Oanda to any news traders out there though. Short-term trading is also hindered by the fact that many intraday moves tend to be technical in nature, and technical analysis is made difficult by Oanda's poor charting capabilities. An external charting package is highly recommended.

Swing trading is what this broker was made for. By paying hourly swap instead of daily, and by giving smaller account holders the flexibility of trading single units, there is really not much more a swing trader could ask for. I would still recommend some external charts, but most professional traders would opt for that anyway, no matter who their broker is.

The platform itself has its ups and downs, with reliability being the main complaint. It can crash at times and become disconnected from the server more often than some more robust platforms. On the upside, it runs in your browser so it is completely Mac-compatible. Very detailed reporting is also available. Traders can easily calculate their exposure to each currency in their portfolio, for example.

PROS:
Single unit trade sizes allow for flexible position sizing and precise money management;
Browser-based platform works on any operating system;
Low spreads during normal market conditions;
Pays interest on account balance;
Server-side trailing stops;
Hourly swap payout;
Well capitalized;
NFA regulated;

CONS:
Poor charting;
Not many pairs to trade;
Very wide spreads at news times;
Questionable platform stability;

Quick Facts:
Headquarters in Toronto, Canada;
NFA member since 2003 (ID 0325821);
Over $170 million in capital as reported to the CFTC;
Target spread on EUR/USD 0.9 pips (0.00009);
Server-side trailing stops allow for them to be honored even when platform is closed;
50:1 maximum leverage (in most cases, this is not a bad thing);

For more information, please visit this full Oanda review.

eToro Review

In my last post I talked about shorting the carry trade with a swap-free broker to avoid paying the overnight swap. I was unwilling and unable to open a large account at any single dodgy broker, so I chose to spread my risk over several. The second swap-free broker I chose was eToro, located in yet another offshore location (Cyprus). They have a US-based arm called eToro USA which is regulated by the NFA, but eToro proper is only regulated by its Cyprian counterpart CySEC - again, not exactly confidence inspiring. This outfit was started up by an Israeli group coming over from the gambling industry (the business model is remarkably similar), and it is quite obvious: the trading platform looks and feels like a game. When I first opened it up I thought it was a joke. They have a "visual mode", and no words can do it justice - you have to see it for yourself - if you buy say USD/JPY, you will see a fat cowboy racing a sumo wrestler down a track. While certainly amusing, any serious trader will shudder at the mere thought of turning the serious business of trading into a game. In all fairness however, these guys are serious about their business, just like they were in the gambling industry, and they do also offer an "expert mode" without the gimmicks. They are in it for the long haul, which is always a good sign that differentiates a legitimate business from the cut-and-run scammers that are running rampant in the industry.

PROS:
Chat feature right in the platform so you can interact with other traders and customer support;
Excellent customer support available for chat even on weekends (for real account holders);
Wide range of transaction methods (listed below under "Quick Facts");
Fixed spreads;
Multi-language platform;
Some great promotions, such as $500 free when you deposit $1,000+;
Segregated accounts;

CONS:
Relatively high spreads;
Mediocre execution;
Weak platform that relies more on gimmicks than functionality or reliability.
Trade sizes are in 10,000 units, not leaving many money management options to smaller accounts, which they specifically target. This is a predatory practice;

Quick Facts:
Headquarters in Cyprus, regulated by CySEC
In business since 2004
Client accounts segrated from operating capital and held at Marfin Popular Bank, Cyprus
US-based clients should visit eToro USA (NFA regulated)
Payments: Credit Card, Moneygram, NETeller, PayPal, Western Union and Wire Transfer
Maximum 400:1 leverage

You can visit eToro here, or get more information here. Thanks for stopping by.

Marketiva Review

When I first opened an account at Marketiva, I was fully aware of the risk I was taking. A forex broker registered in the British Virgin Islands doesn't exactly inspire confidence in a trader. They have been in business for some time however (since 2003) and have a fairly good reputation among traders. Moreover, I really wanted to short the carry trade for the long-term, and Marketiva is a swap-free broker, meaning I would save a lot of money by not having to pay negative swap on my long-term short positions in the high-yielding currencies. Marketiva also allows a maximum of 300,000 units to be traded at any one time, so I couldn't go all in anyway. As it turns out, shorting the carry trade was one of the best decisions of my trading career, and having a broker account in the Caribbean didn't hurt my cause - I was able to close my positions and withdraw my profits without any complaints from Marketiva.

It seems that, as far as market makers go, Marketiva offers a fairly decent and honest product. It is certainly not intended for highly-capitalized professionals, but more for the smaller novice retail trader. Marketiva allows trades as small as 1 unit, and offers vibrant chat community within the trading platform itself. I never found much use for it, but it can be helpful (or distracting, depending on how you look at it). In any case, I can recommend Marketiva to my readers with a clear conscience, as long as you are not looking to trade millions, and can live with the poor charting and basic functionality of the trading platform.

Quick Facts:
Headquarters in the British Virgin Islands;
FSC member (646819);
In business since 2003;
Does not accept clients from the USA;
Deposits by e-Dinar, Liberty Reserve, WebMoney, Wire Transfer;
Target spread on EUR/USD: 0.0002 (2 pips) variable;
Accounts can be held in USD, EUR, GBP, CAD, CHF, AUD, JPY

More details about Marketiva here.
Visit Marketiva

InterbankFX (IBFX) Review

To begin with, I would like to review a few brokers that I have used in the past. IBFX is a very well known and trusted broker, and is one of the first brokers I trusted with my money. I don't have many complaints. Here is a summary of some of my more interesting experiences with IBFX:

A few months ago (September 2008 to be exact) they introduced a number of new currency pairs to trade and were offering extremely high overnight interest rates on those pairs (namely USD/ZAR $140/lot/day, EUR/DKK $21/lot/day). After taking into account each pair's daily ATR (Average True Range) and pip value, I determined that trading EUR/DKK would be the way to go if I am only going after the swap. DKK is a part of ERM2, and is required to stay within a 2.25% band of a pre-determined rate against EUR. The Danish central bank will defend those levels. Moreover, we have never come even close to the edges of the band since it was imposed. This gave me the extra assurance that this pair was not going to move much and that it would yield some profits as a result, since I could open large positions without worrying about the pair running off with my money. I still couldn't figure out why IBFX was offering such ridiculous swap rates though so I spoke to their customer support and they assured me that these rates were real, although they couldn't explain exactly how the rates were determined. So I traded huge positions, particularly on Wednesdays when they triple the swap. Even one day's worth of interest would make up for the spread paid so it was easy to open a position a few minutes before swap time and then close it soon after. This was free money.

A month later though, they announced a "Significant Change to the Swap Rates" and the window was closed, but they never reversed any of my trades and I got to keep all that free money. To this day I don't know what they were thinking, but they left a huge gaping hole in their risk profile for an entire month. Still, they were fair enough to suck it up and take the losses in stride (I'm sure I'm not the only one that took advantage of this opportunity).

Another point for them is the fact that they fill resting orders at the desired price, if the price trades, or even if we gap over the price. This happened to me only once, so I can't say it is their policy per se, but I had an open position over the weekend a few months ago, and price was getting near my stop loss on Friday close. Sure enough, when trading opened the following week, price gapped over my stop loss by quite a margin. I don't remember the exact number, but it was more than 20 pips. Despite that, IBFX closed my trade at the exact stop out price I wanted, even though, technically, that price never traded. I was obviously not happy about my trade getting stopped out, but I gained an extra layer of trust for IBFX that day, because 99% of other brokers would have filled my order at the "next best price" and I would have sustained a much larger loss.

Quick Facts:
Headquarters in Utah, USA;
NFA member (0326091);
In business since 2001;
$40,892,161 in capital as of November 30, 2008, as reported to the CFTC;
Deposits by Check, Discover, Visa, MasterCard, Wire Transfer;
All orders passed straight through to liquidity providers BofA, JP Morgan, Citigroup and Goldman Sachs;
Metatrader 4 (MT4) platform;
Target spread on EUR/USD: 0.0002 (2 pips) variable;
Credit/Debit cards available to US-based clients;

More details about IBFX available here.

What this Blog is about

First of all I would like to introduce myself and my experience as a forex trader. I started dabbling in forex in early 2006 and was immediately enamoured with the idea. Before that I had absolutely no experience in any financial market and to be quite honest, had no real idea about how the world's financial markets even functioned. I had no idea how prices were set or what traders were really buying or selling. I had a vague recollection of someone telling me about options and futures contracts, but had no knowledge about them other than the fact that they existed. I certainly didn't know what margin and leverage were, and even less idea of what hedging was. The year 2006 changed all that. I was earning a fair amount from my business and was looking for something to do with my savings. I quickly became passionate about financial markets in general, and the forex in particular. I traded a demo account for a little while and became confident that I had a good strategy. I opened a real account, and sure enough, I had tripled it within a few weeks. Easy as pie. Then things quickly turned around and within a few days I was down to half of my original deposit. Something wasn't right. I had to figure out what went wrong.

So over the past few years I have been studying, and studying, and studying everything I could get my hands on. One thing I discovered is that choosing the right forex broker is prerequisite to success in trading. It is not the key. It is not the holy grail. It is certainly not the only thing you need, but it IS prerequisite. Unless you know exactly what's happening in the background, how your broker functions, what you can and cannot reasonably expect from your broker, you are shooting in the dark regardless of how sound your actual trading strategy is.

The reason I'm starting this blog in part, is to try and shed some light on how brokers work, but it is mostly to evaluate the many forex brokers out there using small, real accounts, and to publish my results here. This is something I am doing for myself first and foremost, but if you find the information beneficial, then please help yourself to it. I find that most brokers, beyond the obvious scammers, have something to offer that is unique and attractive to some sub-section of the forex trading group as a whole. Choosing the right one can be difficult for new traders who are not sure what to look for, but it can be so for experienced traders as well because until you have traded a real account, there is no way to know exactly how things will go. This is the missing piece of the puzzle I am trying to connect with this blog.

Please note that this is a hobby blog. Its purpose is NOT TO GENERATE REVENUE. You will never be asked to buy anything, to sign up to any services, or to open accounts with any particular broker (for which I just happen to be an IB). I want this blog to be completely bias-free.