MoneyTec 2.0 - Online Forex Traders & Brokers Social Networking Community » Trading Talk » Career Trader

[Norman1]

Hi all,

Over the last 9 months my trading has been going quite well. I have received capital from a few investors and have managed to keep my returns stable. Everyone is happy.

This has caused word to spread and now I have more investors wanting in. This is certainly not a problem as this means more $$$ for me and trading other people's money doesn't seem to effect my trading.

The one thing that I am concerned about is my trading setup. Firstly, my broker is FXCM, I have read many bad things about them and I have noticed it's getting harder and harder to enter trades during busy periods, but generally they have not done anything to upset me. Now that I am getting larger amounts of capital, should I be going to a bank or something?

I really am setup like a novice trader...I'm using FXCM, 1 PC, trading from home, with an average ADSL connection. Should I be making changes?? I am worried that if I do make changes it might effect my trading...Any help would be appreciated..

Norm

[MickMason]

Hi Norm

If it ain't broke don't fix it!

You'll always find something bad to read about all marketmakers, if FXCM works for you then why change?

Depending on the size of your fund you may be able to negotiate a deal with FXCM (rebate), their spreads aren't really that competitive. Do they offer a fund manager front-end, manual accounting could become a chore if you end up with more than a handful of clients.

[Norman1]

Hi Mick,

Thanks for your thoughts....You're right about the rebate, I should look in to that...

The spreads are pretty bad, but I like the fact that they are fixed...I really don't like the thought of having to check the spread before I place a trade, especially when the market is moving fast...

Does anyone around here trade with a major bank? If so what advantages have you found as opposed to trading retail?

[ForexTrader1980]

Hey Norman, I once tried out FXCM's PropFX platform as it is specifically made for larger clients, minimum investment is $10k. Its sort of the FX version of Level II trading. I decided it wasn't for me but I have heard of a lot of happy traders using it and the spreads are a lot tighter. In my experience with that firm, best thing to do is call them up, tell them what you are concerned about and see what they say...what's the worst that could happen? And def ask them about PropFX, they have a demo..

[Norman1]

Thanks FT1980,

I'll have a look at PropFx...I did have a quick look at them when they were marketed aggressively a while back...I think I got turned off because of the non-fixed spreads...

But I will take another look..

[LonelyTrader]

Norman,

If you are trading in size, the liquidity pool and ease and speed of execution become more important. You will absolutely need a pro platform. If you stay with FXCM, you will at some point need to renegotiate your relationship with them. They are flexible to a point. You do have other options and you need to be proactive about them and do the due diligence.

If you're worried about the effects a different platform or broker/dealer will have on your trading, you can always start with a demo and incrementally ease yourself in. I trade a primary account, a secondary account, and a demo account, all from different brokers. I use three charting platforms. I am always interested in a cheaper option and FXCM is definitely NOT competitive in terms of transaction costs. Nor are they competitive in terms of their execution and, despite what they would have you believe, they have problems with fills on their NDD and PropfX platforms. Their customer service is excellent, but at some point the returns on this as an advantage diminish to marginal importance in the face of all their other problems. That said, try to negotiate a more advantageous position for yourself, depending on how large your account size is and depending on the volume of your transactions each month.

One thing I can say you will absolutely need to do as your account grows, is to protect your clients' money. You need to find a broker/dealer who will insure your account. Anything over $100K, IMO, needs to be insured. As a private fund manager, you will need to develop special working relationships with your liquidity providers. You might have to pay for this relationship, but you can pass the cost of this onto your clients (and they will almost certainly understand this as evidence of your integrity and success). It's up to you how much you charge. But your clients deserve to be protected from the kind of problems that an unregulated industry is prone to.

The edge in trading is not just in your entry and exit tactics or the indicators you choose to use -- it is also in the relationships you build with stakeholders in the FX community.