When June started, I said that I was going to try to be consistent in following my forex trading systems. Fast forward one month and I did nothing I said I was going to. Fortunately I know what the problem is. I’ve been putting in overtime at my job and when I do have free time, I spend it concentrating on subjects relevant to my job. How did this happen. I’ve been trading forex over the last three years to become less dependent on corporate America yet I now find myself more dependent than ever. Today I reflected on the last couple of months and came to this realization. I’ve strayed far off the path to self sufficiency. I want to get back on that path. I’m going to try to do this now before it’s too late.
Six months through the year, my forex trading has produced a return of 3.6%. I could have just as easily deposited the funds in a money market account and got about the same return in interest. I have to pick it up over the next six months. I plan on trading more by bringing additional systems online this month. I still won’t risk more than 2% on any given trade but I believe that I have to trade more frequently than I have been.
I’ve updated all of my forex trading graphs that show my monthly profit/loss in USD, equity curve, monthly profit/loss percentage, rolling 12 month profit/loss percentage. http://www.forexproject.com/My_Forex_Graphs/
Rankings of the most visited forex websites were updated last week. http://www.forexontop.com
All Financial Commission Merchant reports have been processed at Broker on Top. See where forex brokers rank based on excess net capital and see trend data associated with this. http://www.brokerontop.com
Here’s one trader’s perspective of what big banks will mean to Forex.
I actually think the development of the big banks coming to Forex is a good thing. They delayed their entry for years because of the "reputational risk" that exists when average joe trader does not like a fill or Trusting Joe lets Shady Jim blow, I mean manage his Forex account, and post nasty things about the dealer. The good thing is that their entry makes Forex chic to a huge number of people who did not know about forex or who were sitting on the fence. Their marketing budgets are much deeper than that of the large FCMs. With more traders coming on board, the clout of retail trading will just get much bigger than the 10% of the daily turnover that we currently represent. I think a thing or two should be said about the "smart money" that is already part of the system. The logic is: smart money -> more operational sophistication -> more safety for investors. Of course, money alone will not be sufficient to make Forex free of Refco-like implosions, but it will make it less likely. Several very well funded private equity firms are equity partners of multiple Forex dealers: Gain Capital: 3i, VantagePoint, Tudor Ventures, Edison Venture Fund, Cross Atlantic Capital Partners, and Blue Rock Capital; FX Solutions: Francisco Partners; Interbank FX: Spectrum Capital; Oanda, GFT, the list goes on. . . most FCMs with $10m or more in adjusted net capital today have private equity money helping them to compete with the likes of DB and Citi. I think it makes it very interesting for all of us going forward.
Citi has been in the retail FX market for a couple of months now but it signals a continuing trend of big financial institutions trying to get a piece of our forex action. Deutsche Bank was the first big bank to get in a couple of years ago (from what I remember) but it’s interesting to note that all these big banks did was partner with the bigger forex firms. They blew up the sub-prime mortgage business, will they do the same to Forex?
Here are the notable partnerships between big banks and forex specific firms:
Deutsche Bank is partnered with FXCM.
ABN Amro and UBS are partnered with Oanda.
Citi is partnered with Saxo Bank.
Goldman is partnered with CMC Markets.
This came as a complete surprise to me but I absolutely welcome it. FXCM announces they will offer Metatrader in 2008.
FXCM plans to introduce the MetaTrader online trading platform in the beginning of 2008.Because many traders have expressed an interest in this trading platform, we would like to keep them informed of our progress. Please complete the form below if you would like us to send you information about the upcoming release of MetaTrader.
The only place I know where you can get free forex tick data is at Gain Capital’s site, http://ratedata.gaincapital.com but from my experience and from other traders I’ve spoken too, the data is spotty at best. There are gaps, format differences, and data overlaps. What can you expect though, the data free. I tried for a long time to fill gaps and clean up the data but I gave up. There was just too much data and it was going to be impossible to verify.
A trader sent me an email a couple of days ago about Oanda providing tick data. It’s free but with a condition. You have to have at least a $1000 account with Oanda. You then can request tick data for one currency pair (GBP/USD, EUR/USD, USD/JPY, USD/CAD, or USD/CHF) that goes as far back as January 1st, 2004. Oanda’s states that it may take up to two weeks for them to send the data to you and you can only have one request open at a time. So if you want tick data for all five currency pairs, it will take about ten weeks.
If you’re an academic faculty member, you don’t need an account open with Oanda. You can get an exemption and obtain the data for free.
More details are available at https://fxtrade.oanda.com/cgi/fxticks/order.cgi
For more forex related posts from the Forex Project, check out:
- Forex Historical Data
- Where Do I Get Forex Historical Data?
- Building Up Historical Forex Data
- Lots and Lots of Forex Data
- Forex Real Time and Historical Data
Do you want to support the Forex Project and at the same time get a more in-depth view into 1 of the 24 remaining NFA registered forex brokers? I’ve never explored Forex Club and don’t know much about them. I like to keep my options open though when it comes to forex brokers so I’m always on the lookout to find out more about one. To support this website, you’ll need to fully sign up for a demo by clicking on the link to the right…. or don’t.
The December 31st, 2007 FCM report was released from the CFTC and processed on http://www.brokerontop.com today. Some notable mid-cap Forex brokers who remain in financial shape based on Excess Net Capital are:
- Oanda’s excess net capital decreased 1.85% from the previous month to 149 million dollars.
- FXCM’s excess net capital decreased marginally from the previous month to 61 million dollars.
- Gain Capital (Forex.com) excess net capital decreased almost 2% from the previous month to just over 44 million dollars.
- Interbank FX excess net capital decreased by over 40% from the previous month to 15.7 million dollars.
- FX Solutions excess net capital decreased by 49% from the previous month to 13 million dollars.
- GFS Forex and Futures increased excess net capital by 248% to just over 9 million dollars.
- CMS Forex increased excess net capital by over 22% to just under 9 million dollars.
- Alpari (US) had excess net capital decrease by over 44% to just over 3 million dollars.
- Easy Forex had excess net capital decrease by over 48% to 2.6 million dollars.
These numbers don’t tell the full story of any FCM’s financial health. Perform your own due diligence to try to determine if a forex firm is financially stable. I prefer the mid-cap brokers but we all know what happened to Refco a couple of years ago so you never know. Even though Refco seemed like they were financially stable, if the company is hiding bad debt and performing creative accounting, your money could be gone forever.
I spoke to someone over at the NFA today and they sent me over a current list of forex dealer members who have ceased operations since September 1st, 2007:
American National Trading Corp.
Direct Forex FX
Farr Financial Group
Hamilton Williams LLC
One World Capital Group LLC
Royal Forex Trading LLC (Freedom FX LLC)
SNC Investments, Inc.
Solid Gold Financial Services, Inc.
This is a list the NFA sent me today of all registered Forex dealers as of December 21st, 2007:
Advanced Markets Inc.
Capital Market Services
CMC Markets US LLC
E FX Options LLC
Easy Forex US Ltd.
Forex Capital Markets
Forex Club Financial Company LLC
Friedberg Mercantile Group, Inc.
FX Solutions LLC
Gain Capital Group Inc.
GFS Securities and Futures, Inc.
Global Futures & Forex Ltd.
Hotspot FXr, Inc.
I Trade FX LLC
IFSCL USA, Inc.
IFX Markets, Inc.
Interbank FX, LLC
MB Trading Futures
Money Garden Corporation
ODL Securities Inc.
Peregrine Financial Group, Inc.
RJ O’Brien Associates Inc.
I missed this on Friday but the NFA announced that four forex brokers ceased operations due to the $5 million capital requirement. They don’t announce which four. I noticed an "Under Maintenance" page from Direct Forex which had reported to the CFTC in November but other than that, there’s no for me to know at this point.
It’s definitely not GFS Forex and Futures which have a note on their website stating they received a $6 million capital infusion. So they’re fine for now.
The November 2007 Futures Commission Merchant report was released today and has been processed on http://www.brokerontop.com. Here's an updated status of the broker's I mentioned may be in trouble earlier in the week:
- CMS Forex (needed 10 million, barely compliant in October) increased excess net capital by 4%
- Hotspot FX (need 5 million, barely compliant in October) increased excess net capital by 1%
- Forex Club (need 10 million, seriously undercapitalized in October) increased excess net capital by 65%
- MB Trading (need 10 million, seriously undercapitalized based on October report) increased excess net capital by 168%
- Easy Forex (don't know their leverage but still seriously undercapitalized based on October report) increased excess net capital by 184%
- Alpari (need 10 million, seriously undercapitalized based on October report) increased excess net capital by 271%
Check out the Small-cap Brokers.