BarroMetrics Views: Selecting Brokers
As we recede from the brink, at least for the moment, traders begin to forget the risks associated with our game. Trading is difficult enough without losing money because a broker has not complied with regulatory legislation.
The greatest area of concern for me is the FX industry. There is no system of insurance in Singapore, the USA and Australia to protect the FX client if a broker fails to segregate client funds from its own funds. Sure the broker is in breach and in some countries liable to criminal prosecution but that does little for the client who becomes an unsecured creditor.
In all the three countries mentioned, I believe Singapore’s Monetary Authority to be the most diligent and the worst to be the US SEC; Australia’s ASIC falls somewhere in between. Still, I was very happy when I found a solution that protected my funds without having to rely on some government agency.
Before I explain what I mean, let me say that this avenue of protection may not be available for US residents and citizens. You will need to make your own enquiries.
Here’s the deal: Under present Swiss legislation, a broker, including FX brokers must obtain a banking license. Since Swiss law guarantees all deposits, a client’s funds are effectively guaranteed by the Swiss Government. Of course, you are guaranteed against the broker defaulting, not for your trading losses.
Recently I came across a Swiss broker ACM. I have to say I am impressed by the level of service I am given and the spreads I am quoted. The execution package is first rate; but the charting package needs much improvement - still at least ACM supports Metatrader4 which is an OK charting package.
I rate ACM the equal of Dukascopy whom I had believed to be head and shoulders above the opposition.
If you are In Singapore, ACM is doing a soft launch on August 24. Register on this link:
http://www.nextview.com/
If you turn up, come up and introduce yourself and let’s have a chat, I am one of the speakers.
OR You can contact Ana Wang at email: yintrader@gmail.com - for a demo account.
Usual disclaimer: I do not receive a referral fee. I recommend ACM because I have been impressed by its level of service.
By the way, if you ever want to do some due diligence on brokers the ForexPeaceArmy is a good place to start. Membership is free. Make sure you read the commentaries. Some are just whinges but others make good points. Also I like to see at least 15 reviews and prefer at least 30. I have found that 3 stars denote an average broker.
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