In principle I completely agree with you that local domain is sometimes good sometimes bad. The obvious intent of the law is to make it so retail brokers must submit every trade to the prime broker, which then gouges the market in commissions. The retail broker earns no spread, and needs to charge commission. The only leverage the retail broker can offer is the leverage the prime broker offers. The lot sizes are dictated by the prime broker and they tend to be 5 lot minimum right now. ECNs take a hit, because you need a separate buy and sell account, and the ECNs still rely on the prime brokers for settlement, and the prime broker commissions and the ECN commissions stack. In other words, everybody gives away all of their profits to the prime brokers, nobody trades net, and the leverage/credit you get are entirely dictated by the prime brokers.

I think this qualifies as bad especially since it makes MT4 illegal. MT4 can *only* do net trades. We're trying to hack in Straight Through Processing and it is hard. Even that isn't enough. I'm sure I'll be able to continue trading after the bill passes, but I'm also sure that if the bill passes, leverage and most brokers are gone. The only ones that are left are expensive.

This info is great.

I just want too say Metaquotes should pay attention to this and not us. They're very busy with MQL5 and the "color mirrors" when what we really need is more or different features with the platform/server, like fully support to ECN trading or a decent screen. MT4 has become small with the new market conditions and the pressure will keep growing up, at least for the US/Canadian market.

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Understand the snips of the post by an obviously biased opinion, see below. MT4 and the other birds of the feather are trying to hang on to what they have.

By making the market more transparent...we will know what our commission is...instead of MT4 hiding it for the dealers and presenting it.

MT4 has never been on our side...the gig is up...

and guess what dealers?...your 100K investment and up in MT4 may now become worthless...and those naughty plug-ins...HA!. MT4 you ought to be ashamed of yourself, you dirty bastid's.

ES

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ElectricSavant Challenge™

Live Portfolio

ElectricSavant, how do you plan to bypass the trade execution before MtSrvTradeTransaction in order to fulfill the requirements of 4b(D)(ii)?

Also, please provide a list of STP feed connectors, because the BostonTradeTechnologies doesn't work well and the 2 other connectors both have killer bugs. I've used all 3 in live trading.

I do agree most MT4 brokers should be very ashamed, and Alpari/MetaQuotes made MT4 to do easy price injections. Those price injections now carry a 3xProfit penalty or $10 Million whichever is less.

So what do you think this means to the market? How do you envision the Retail Forex Brokers surviving? Under what business model?

Its too strict in my opinion..I think brokers like Oanda, interbankfx would be forced to open subsidiary branches in panama or Switzerland joining up with local company...to serve folks like me who are not in US but trade online

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I'm waiting for the golden age 12/12/2012

It’s due diligence time once again. With the Farm Bill set to become law the trading public needs to start preparing for the changes just over the horizon. The following U.S. registered firms do not currently meet the first 120 day benchmark ($10 million) the Congress has recently set for Retail Forex Dealers according to the latest CFTC Net Capital Report:

http://www.cftc.gov/stellent/groups/...cmdata0308.pdf

Now obviously some of these firms can come up with the money as several have large parent companies who are loaded (CMC and Hotspot for example.) But just as past dead pool members were unable to meet the former $5,000,000 mark so too is it likely that some Autumn Equinox Pool members will be unable to meet the upcoming $10,000,000 mark which is set to go into effect at the end of September should the legislation become law before Memorial Day as expected. Which firms may fold as a result? No one can say for sure. But I certainly would not want to be a trader at Bacera, Advanced Markets or Money Garden right now.

Since the worst of the forex dregs were purged in the last dead pool the likelihood of any of these firms going belly up like One World Capital is slim. That’s the good news. The bad news is firms that know they are going out of business have a strong incentive to really screw over their customers and give them the worst execution possible as they try to grab some traveling money before they have to hit the road. This is why I’m recommending that traders avoid opening new accounts or depositing any additional funds with Advanced Markets, Bacera and MG Financial until they clearly demonstrate they can meet the new capital requirement.

I suspect the remaining firms will have enough capital to meet the $10 million requirement but traders who have accounts with these firms should be sure to speak with them and discuss the firm’s long term strategy for dealing with the full $20 million requirement. There is going to be a lot of mergers in the industry in the next twelve months and traders are likely to suffer in the chaos as customer service gets chopped up and dealing desks start really squeezing traders in their last dying days. Know in advance what you are in for and be sure to do your due diligence now more than ever.

Scooby pointed out in the Retail forex almost illegal in US thread that it may be possible for brokers to legally offer net trades as long as there is explicit permission to not execute trades that are submitted. Those are my words, not his. I recommend checking out his analysis and I hope that more people start reading the law and discussing it.

Since starting up this thread many former forex firms are now pushing up the daisies, dead parrot style: YouTube - Dead Parrot

Indeed, these firms have passed on. They have ceased to be. They have expired and gone to meet their maker. They’re stiff. Bereft of life they rest in peace. They have kicked the bucket and joined the bleedin’ choir invisible. These are ex-forex firms:

Rest in Peace
-The following firms are no longer functioning as independent registered forex dealers.

1. United Global Markets (Died May 2007. Cause: Undercapitalization)
2. Forward Forex (Died June 2007. Cause: Busted for Fraud)
3. Worldwide Forex (Died June 2007. Cause: Busted for Fraud)
4. Cal Financial Corporation (Died March 2007. Cause: Undercapitalization)
5. Nations LLC (Died July 2007. Cause: Undercapitalization)
6. FX Option1 Inc (Died June 2007. Cause: Busted for Fraud)
7. Trend Commodities (Died June 2007. Cause: Undercapitalization)
8. Performance Capital (Died June 2007. Cause: Buyout)
9. FiniFX (Died July 2007. Cause: Undercapitalization)
10. CFG Forex (Died February 2007. Cause: Undercapitalization)
11. Tradex Swiss AG (Died August 2007. Cause: Busted for Fraud)
12. Spencer Financial (Died June 2007. Cause: Undercapitalization)
13. One World Capital (Died November 2007. Cause: Undercapitalization)
14. ANTC (Died August 2007. Cause: Buyout)
15. Royal Forex (Died August 2007. Cause: Buyout)
16. Northfinance (Died May 2008. Cause: Buyout)
17. VelocityFX (Died December 2007. Cause: Undercapitalization)
18. Direct Forex (Died December 2007. Cause: Buyout)
19. E-FX (Died November 2007. Cause: Undercapitalization)
20. Solid Gold (Died December 2007. Cause: Undercapitalization)
21. FXLQ (Died December 2007. Cause: Busted for Fraud)
22. SNC Investments (Died December 2007. Cause: Undercapitalization)
23. WestCap FX (Died April 2008. Cause: Autopsy not Complete)
24. AleccohFX (Died February 2008. Cause: Busted for Fraud)
25. Finex (Died sometime in 2007. Cause: Busted for Fraud)

That’s twenty five firms by my count that have been closed or bought out on the Savior’s watch. Thousands of traders have lost millions of dollars as a result of the chaos in the forex industry the past year and a half. Don’t allow yourself to be the next victim. Be sure to trade with a well capitalized firm and make sure they are prepared for the coming capital requirement increase to $20 million.

While we await the President’s veto I thought I would pass along one of the funniest forex related websites I have seen in a while. It is called Caveman Forex.
Caveman Forex

The troglodyte running this website claims to be selling a winning “formula” guaranteed to make traders rich. Says Caveman Forex, “Due to the nature of the Cavemanforex formula, the success rate of these trades ranges from 60% to 70%. This ultimately gives me a profit ranging from 200 to 500 pips, sometimes more.... EVERY WEEK!”

Uh huh.

And get this. He’s only selling this secret formula for $89! As Don Corleone once said to The Turk “Why do you come to me? Why do I deserve this generosity?”

I’ll tell you why, because it ain’t generosity. You’re more likely to earn money betting on Eight Belles to win the Triple Crown this year than you are trading the forex market based off signals given to you by the cast from the opening scene of 2001: A Space Odyssey.

But I give Caveman Forex points for showmanship that’s for sure!

President Bush will officially veto the farm bill today per Reuters:

Congress may initiate an override vote as early as this evening. We are nearing the end game now.