EA's work with US brokers, it is unfortunately best to trade with
non US brokers if you have a small budget.
To trade safely with US Forex brokers you need a larger initial deposit which unfortunately makes it harder for hard working poor or middle class citizens in America to trade Forex if they don't have enough extra income set aside they can afford to lose in Forex if trading does not always go their way.
Unfortunately the US has made it harder and harder for US citizens to get Forex accounts with non-US Forex brokers.
In fact, to avoid all the expense and paperwork of allowing US citizens to open accounts with them several overseas brokers have simply banned any new US clients from opening an account with them. They did this by simply removing "United States" from the "Country" tab when you go to fill out a application.
FinFX is a
non-US broker who accepts US clients (at the time of writing this).
They have micro accounts available (allows 10 cens a pip lot size),
as well as ECN accounts. But the ECN accounts need to be funded
with a minimum of $1000, and the minimum lot size in ECN accounts
is $1 a pip. FinX also has ECN Pro accounts, but the minimum
required deposit is $10,000.
my Honest Review about
FinFX if you are seriously considering opening an account
with them. I gleaned a lot of info from Forex forums to come up
with a accurate review condensed in one place to save you
Traders Way (MT4 ECN account) accepts US clients, and is my choice (at the time of writing) for using Ed's Price Action EA and Ed's Candle Pattern EA default news trading settings.
Traders Way accepts US and Non US Clients, and at the time of writing they are offering 100% credit to your account.
For example, if your deposit is $1000, they will give you another $1000 credit to increase your leverage. (But obviously you cannot withdrawl the cedit).
In the back office area you can change your leverage anytime you want.
Traders Way offers up to 1000:1 leverage.
I have sucessfully deposited and withdrawn money from my Traders Way account, but keep in mind you can only withdraw money using the same method you used to deposit finances into your account. (Unless it has changed).
If you are a US citizen and you choose a non-US broker you are responsible for reporting the sum of your Forex gain or loss to the IRS (please see simplified tax info below).
To be accepted by a Forex broker you need to fill out an online application and send them a photo copy of your id + utility bill or proof of current address (but this may vary from broker to broker).
Once your application for a live account is accepted you can fund your account. But it is best to first practice on a demo account that is supplied with virtual funds for you to practice with.
The method of depositing and withdrawing funds to and from your broker account varies from broker to broker. The methods often used are: Wire Transfer, Check (in the mail), e-check, credit card, Paypal.....and various other payment methods. But not all Forex brokers use Paypal, and might only use wire transfer and check. If you are thinking about signing up with a particular broker it is best to research them first.
Simplified Forex Tax Info
Reporting Forex Gain/Loss info on your 1040 Tax Form if you live in the US , but Trade with a Non-US Broker
This is only an example about how to record your Forex Gain/Loss on your 1040 Tax Form as of 2012 (laws are subject to change over time).
PLEASE CONSULT A TAX PROFESSIONAL. Tax rules often change.
If you have a US Broker they will send you the forms and info you need.
If you live in the US, but have an account with a non-US Forex broker, you are responsible for reporting your Forex Gain/Loss on your 1040 Tax Form.
You need to report your total Forex gain or loss on Line 21 of your 1040 Income Tax return where it says "Other income".
On that line you need to write: Ordinary gain/loss from IRC 988 cash forex transactions.
If you have a overall loss for the year in Forex then put the amount in a negative value, such as -$5000.
That amount will be subtracted from your gross income that was reported from your W2 form from your employer if you have a job, and/or from your business gross income if you own a business.
If you come out ahead and have a yearly gain in Forex, instead of a loss, then add your Forex yearly gain (such as $10,000).
then be added to your gross income, and taxed.
So if you have a overall loss in Forex you won't be taxed on your losses. But if you have a overall gain in Forex you will be taxed on that income just like you are taxed on your job or self employment income.
Again, please CONSULT A TAX PROFESSIONAL. Reporting your Forex gain or loss may not be as complicated as you may think.
Types Of Forex Brokers
ECN Forex Brokers (#1 choice)
ECN Brokers simply provides the best possible price i.e. the best spread based on current market participants. The price on their platform comes straight from the InterBank market and there is no manipulation of the spreads. Spreads as you know are the bread and butter of market maker brokers. Since there is no mark-up on spreads by ECN brokers, the only way they can receive money is to charge commissions fees. Paying commission works out more economical than the higher spreads on market maker platform. (Copied from firepips.com)
While you may find a few brokers that are ECN, there are even fewer that offer a ECN version of MT4.
FinFX is a non-US ECN broker who accepts US clients.
MB Trading (US broker) offers a ECN version of MT4. 50:1 leverage.
STP Forex Brokers (#2 Choice)
Some brokers claim that they are true ECN brokers, but in reality, they merely have a Straight Through Processing system.
Forex brokers that have an STP system route the orders of their clients directly to their liquidity providers who have access to the interbank market. NDD STP brokers usually have many liquidity providers, with each provider quoting its own bid and ask price.
Let's say your NDD STP broker has three different liquidity providers. In their system, they will see three different pairs of bid and ask quotes.
Their system then sorts these bid and ask quotes from best to worst. In this case, the best price in the bid side is 1.3000 (you want to sell high) and the best price on the ask side is 1.3001 (you want to buy low). The bid/ask is now 1.3000/1.3001.
Will this be the quote that you will see on your platform?
Of course not!
Your broker isn't running a charity! Your broker didn't go through all that trouble of sorting through those quotes for free!
To compensate them for their trouble, your broker adds a small, usually fixed, markup. If their policy is to add a 1-pip mark-up, the quote you will see on your platform would be 1.2999/1.3002. You will see a 3-pip spread. The 1-pip spread turns into a 3-pip spread for you.
So when you decide to buy 100,000 units of EUR/USD at 1.3002, your order is sent through your broker and then routed to either Liquidity Provider A or B.
If your order is acknowledged, Liquidity Provider A or B will have a short position of 100,000 units of EUR/USD 1.3001, and you will have a long position of 100,000 units of EUR/USD at 1.3002. Your broker will earn 1 pip in revenue.
This changing bid/ask quote is also the reason why most STP type brokers have variable spreads. If the spreads of their liquidity providers widen, they have no choice but to widen their spreads too. While some STP brokers do offer fixed spreads, most have VARIABLE spreads. (Copied from babypips.com)
HotForex is an example of a Forex broker that uses STP in their MT4 platform.
Market Maker (Dealing Desk) Forex Brokers (#3 Choice)
As the name suggest they “make” the price, as in change Bid and Ask value. Say for example they receive 1 pip spread from InterBank Market on EURUSD, but instead for us they display 3 pips spread (spread is the difference between Bid and Ask). Brokers can vary this from time to time and sometimes even show tighter spreads on Demo accounts but when you open live account it is a totally different story.
Every time you open and close a trade you lose the spread. This adds up to a significant value if you trade frequently. Not only this but market maker brokers are notorious for creating spikes, they do it in order to take out customer’s stops. Some market maker brokers also freeze their platform during news announcements or increase spreads by 20-30 pips which is quite common. Since Forex is not tightly regulated as other markets there is not much NFA or similar organizations can do.
The only advantage of using a market maker broker is that they require less funds to open account and usually offer platforms that are easy to use. They also offer higher leverage, benefits of which are debatable. (Copied from firepips.com)
For a list of brokers Click Here.
information about different types of brokers Click Here.