I heard recently that regulation of forex brokers is much tougher in the US. So far, I’ve only researched Europe based brokers. I wanted to take a quick peek at how they do things across the pond before signing up for an account.
Forex.com was founded in 2001. Although it’s based in the US, it services clients from over 180 countries. It is subject to many different regulators including the CFTC, NFA, and SEC in the US, the FCA in the UK, the FSA in Japan, SFC in Hong Kong, and ASIC in Australia. With such a long operating history and so much regulatory scrutiny, it’s bound to be a solid and reliable broker.
Forex.com allows you to trade around 50 currency pairs as well precious metals like gold and silver. If you want to trade commodities, you’ll need to open another trading account with another company called Daniels trading. The other brokers I’ve seen so far allow you to trade commodities and stocks in the same account so this seems pretty inconvenient.
Forex.com offers a number of different platforms including Forex Trader Pro, MetaTrader 4 and Tradable. There are also mobile app versions of these platforms for your phone and tablet so I can trade on the go. If I can a break between classes or am stuck in a boring lecture, it will be nice to check on how my trades are doing with these apps.
Forex.com also offers some webinars and online courses on trading techniques and strategies. They also offer live trading sessions where you can ask experts about their trading secrets for making good money.
Forex.com offers customer support via telephone, fax, email or Live Chat. They also won the “FX Empire Best Customer Support Award for 2014.”
Forex.com requires a minimum deposit of $250 to open an account. This is substantially more than the European brokers – for example, I can open an account at HotForex with just $5.
They also have many fewer deposit options. You can send money with a wire transfer or check but you can’t use your credit card or online payment services like paypal, skrill, neteller, etc…
Leverage seems to be much lower as well with max leverage of 50:1. Although this is probably enough for my purposes, it’s always nice to have the option to increase leverage as my experience and risk appetite may grow over time.
Although the forex spreads seem pretty reasonable, Forex.com does charge a lot of miscellaneous fees. For example, I’ll get hit with a $40 fee if I make a deposit via international wire. If I deposit $250 to open an account, that means I’ll lose 16% of my funds before I even trade.
They’ll also charge me a $15 inactivity fee. With classes, exams and papers, there will definitely be times I can’t watch the market. I wouldn’t want my money to be sucked away if I don’t have the time to trade.
While Forex.com certainly does appear to be a solid broker, the fees are significantly higher than Markets.com, HotForex and Avatrade. It also doesn’t offer any promotions, which makes me think the forex broker business in the United States is much less competitive than Europe.
While I don’t think I’ll go with Forex.com, it was certainly interesting to be observe some of the differences between US and European brokers.