Forex Blog

One Financial is quite a new Forex broker, that is actually specializing on CFD and other futures trading, but offers Forex trading services too. They offer Muslim-friendly accounts (with no interest or swap) and Arabic support — so, it’s quite clear that they are aimed on the traders from Middle East. Their trading conditions are quite common — 3 pips spreads on EUR/USD, $1000 minimum positions, wire and credit card deposits and a custom platform that can be ran in browser. One Financial claim that they are registered and regulated by FSA (United Kingdom), but I’ve failed to find any mention about One Financial on FSA site. I can also note that their support isn’t very professional — it took me a lot of time to find out that they offer mini-Forex services.

I’ve added a very new Forex broker to the site today — Forex-Metal. Its website is still very raw and there is not very much information about this broker on the internet. But I thought that it should be listed because it has one rare feature — it supports both MetaTrader 4 platform for trading and PayPal payment system for deposits and withdrawals. It also supports WebMoney and wire transfers for billing and also offers CFD trading (as almost every MT4 broker). Of course, this broker is still very new, it’s not regulated and it has no reputation, but it may be an interesting opportunity to start trading Forex. Anyway I don’t recommend depositing too much funds in Forex-Metal before it becomes more reputable.

An interesting Forex broker reached my attention recently — DeltaStock. It’s a Bulgarian registered brokerage company, which is operating on the on-line Forex market since 2001. DeltaStock also offers CFD, metals, commodities and stocks (only Bulgarian companies) trading. It offers both fixed and variable spreads to choose from and both downloadable and browser trading platforms to trade. I think that this broker would be quite interesting for the Bulgarian Forex traders and those outside Bulgaria who are searching for some good trading conditions.

OK, CFD trading is a bit offtopic for the Forex blog, but as many Forex brokers also offer CFD trading services and it is in a lot way similar to Forex trading (high leverage, MetaTrader platform, no dividends), I thought that it would be interesting to share my results for 2007.

I’ve decided to use standard demo account of $10,000 solely for CFD trading in January 11, 2007 with the condition to close all positions before the end of the year and see the results. I’ve closed the last position last Friday, before entering the low liquidity market pre-Christmas period.

Unsurprisingly, the minority of the losing positions outweighed the majority of winning ones. As I was a total newbie to CFD at that moment, my first several positions were badly thought out and planned. So here are the stats:

Total Positions: 26
Profitable Positions: 14
Losing Positions: 12
Total Profit: -$800.10
Total Profit, %: -8%
Average Profitable Position: $417.86
Average Losing Position: -$554.17

Most profitable symbols: #t (AT&T), #mcd (McDonalds), #ibm (IBM).
Most losing symbols: #aig (American International Group), #c (Citigroup), #jpm (JP Morgan Chase).

And yes, all the trades were long (I think there is no point to go into long-term short positions in the bullish stock market). No surprise here - the biggest losers are related to the financial sector, which experienced a very bad year; biggest winners are from IT and consumer’s sectors that wasn’t disturbed by the subprime lending slump.

When I opened positions I’ve used the financial ratings from the various on-line agencies as well as my own vision of the company’s future (that usually proved wrong resulting in the major part of my losers). Stop-loss was usually set to some psychological support level (also wrong, technical support levels with lower loss level proved to be better), take-profit was set the recommended target level or slightly below (in most cases it worked fine).

After six months of CFD trading I started to understand my mistakes and tried to improve my strategy. So I’ve came up with these important “cornerstones” of leveraged CFD trading:

1. Use Alpha and Beta parameters as the indicator of the stock potential (I’ve used the ones from MarketEdge.com).
2. Don’t buy a symbol if some major financial institution states some real reasons against it, or if it has a rating below A.
3. Stop-loss shouldn’t be greater than your take-profit.
4. Close positions that are in a negative zone for more than a month - it’s better to free up some margin to buy a better symbol, there are plenty of them.

I will be trading CFDs for the whole next year too and I will probably start a separate real trading account specifically for such trades. I hope my 2007 experience will help me to gain at least as much as the raw S&P 500 index in 2008.

I’ve updated the brokers section adding another Muslim-friendly Forex broker that doesn’t charge or give any overnight interest over the open positions. While being crucial to Muslim traders this quality can be useful to other traders that prefer positions with negative overnight interest. GCI Financial is not a new Forex broker, it operates since 2002, which is rather old for the on-line brokers. GCI Financial also supports PyaPal as an account funding method with the minimum Forex trading account size starting from $500.

Some good news from LiteForex broker came on Friday - the cost of CFD trading has been lowered twice. Now the commission on opening a CFD (NYSE stocks contracts for difference) position is 0.05% only, which is below the average level of other CFD Forex brokers:

Dealing centre LiteForex has always tried to provide the best trading conditions for our customers and today we have just made a big step forward to it. Since today Liteforex is a first MetaTrader broker who can provide 2 times lower comission! Now it will be 0.05% only!

Some traders don’t like trading with brokers registered in some offshore zone with a little or no regulation at all. For these customers exist such Forex brokers as marketindex. ABN AMRO marketindex is the broker which offers financial market trading services as the division of one of the largest banks in Europe. marketindex offers Forex, CFD, commodities and indexes trading. They offer their own custom Java based platform (you don’t need to download anything) with some interesting functions, like box trading. Actually, I would prefer MetaTrader 4 or even Marketiva’s Streamster to this platform, and the trading conditions are a bit below the competition level, but this broker is a good choice for traders which don’t want to risk losing their funds fraud or broker’s bankruptcy.

Synthesis Bank is a registered banking body, located in Switzerland (Geneva and Zurich) and offering Forex trading services. Besides Forex they also offer CFD, Futures, Stocks and Bonds trading which makes it quite a good choice for those that wish to diversify their portfolio as much as possible. Synthesis Bank doesn’t offer Metatrader 4 platform, instead they provide their own platform - Trading Floor. Their spreads are quite good - from 2 pips on EUR/USD, but lack of mini Forex accounts doesn’t serve as an advantage of Synthesis Bank brokerage services.

A new Forex broker with quite a long on-line history and good stand (since 2004) was added to the Forex brokers section of a site. FIBOGroup allows CFD and Forex trading via both Metatrader 4 and Metatrader 3 trading platforms. The minimum deposit is $300 and the leverage at which account are set up is 1:200. At FIBOGroup accounts are easily opened on-line, but they don’t allow e-gold deposits (closed this option due to the problems with e-gold) - but they may reopen this option in future.

Great Britain looks to be rich on Forex brokers (probably, because of slightly less hard regulatory environment than U.S., but with great financial possibilities which London City possesses). IG Markets is Forex broker which started as a CFD broker and then added spot Forex trading to its on-line services. You can trade using both java platform and standard downloadable program. But with IG Markets you are limited to 1:50 leverage. The minimum to start trading with them doesn’t bite – moderate $200. Except standard ways of money deposit/withdrawal (bank wire, credit card, check) Moneybookers is also available.

Trade at Man is a British Forex broker (division of a Man Group company) with $10,000 minimum account size and a low leverage – 1:40. Such conditions are looking very unattractive to most Forex traders, especially beginners, who got used to 1:100 leverage with $1 minimum. But they have a newbie-friendly trading platform which is completely insufficient for professionals. So, it is kind of difficult to understand whom are they aiming for. But if you deposit $10,000 with Trade at Man, you’ll be able to trade not only Forex, but also CFD, options and futures with this regulated broker.