Discussion in 'Forex Brokers' started by Gcapman, Jan 16, 2010.

  1. Gcapman


    Are US citizens (and currently residing in the US) allowed to open an account with Dukascopy?

    I'm very interested in:


    Anyone with experience - please chime in. Also, what has your experience as a trader with them been like?

    Thanks in advance!!!
  2. bstay


    have u checked with them? what did they say?
  3. Gcapman


    Sent an email but so far no response which is why I was hoping someone on this forum could help out with an answer

    The custodian bank option makes them really attractive - since essentially, my funds would be fairly well protected with the likes of SocGen, Barclays, etc...
  4. hoffmanw


  5. The custodian account requires an account balance (opening) of $250k, according to the sales rep I spoke with.
  6. cstfx


    You have to open an account with Dukas first before they forward your info to one of their custodial banks. Whether that means you have to fund your Dukas account first or just have it "opened" has not been clarified to me as yet, but I will only deal with them if my funds are not kept with them. And yes, you need minimum 250K USD to open custodial account.
  7. I talked in length with a customer service rep.

    He said the following:

    100k was enough to open an account with (I didn't ask what the minimum was - just if 100k was enough)

    You open an account by printing and filling out the forms they send you, have it notarized, and US only needs your drivers license or state ID (not a passport)

    You fund the account via wire transfer

    (withdrawing funds involves a notarized written request and takes about a week to process)

    For an account with 100k- pip spread is 1 pip (on EUR/USD)
    however- its NOT a fixed spread and on their test account I saw it typically be around 2 on up to 5 when the market had a rush of action.

    He said not to trade fridays closing market (last 3 hours) because the pip spread is very wide (over 30) and changes constantly.

    Commission: he said standard commission is $15 in and $15 out
    on a single trade basis. Trading over 30million in a month (1 contract =2 million) qualifies you for a discount (can't remember how much!) and trading over 3 billion (1,500 contracts) in one month lowers it to $5 in- $5 out. However- your charged at the $30rt rate till the end of each month- then you are credited back the $20per rt you were overcharged.

    The most important fact is:

    They are a true ECN.
    They NEVER are the counterparty to your trade.
    You are NOT trading a computer game.(off-exchange)

    EVERYONE- PLEASE read your contracts CAREFULLY!!! most of these
    firms are OFF-EXCHANGE systems. They take the counterparty position. The only way you'll make money is if they loose money.
    They can prevent you from making money because you are trading on an independent online computer game that they created = they control it. They spell it all out in the contract-

    Here is a portions of the CAPITAL GAIN contract I looked at 2 days ago:

    4.1. (portion of text)
    Each Bid Price or Ask Price shall be for a Spot Contract with a specified Value Date and shall specify each Eligible Foreign Currency or tradable U.S. dollar-based currency pairs involved where applicable. ** GAIN Capital expects that these prices will be reasonably related to the bid prices and ask prices available in the market at that time for similar transactions, but a number of factors, such as communication system delays, high volume or volatility can result in deviations between prices quoted by GAIN Capital and other sources .**GAIN Capital makes no warranty, express or implied, that Bid Prices and Ask Prices represent prevailing bid prices and ask prices. In addition, these Bid and/or Ask Prices may reflect, at the direction of the Introducing Broker named above, additional pips added to the BID and/or ASK price that may result in an increase of the dealable spread available for the Customer’s account as well as a per trade or per lot commission and/or fees. See Section 11-Charges.

    4.2 (portion of text)
    .In cases where the prevailing market represents prices different from the prices GAIN Capital has posted on our screen, GAIN Capital will attempt, on a best efforts basis, to execute trades on or close to the prevailing market prices. **These prevailing market prices will be the prices, which are ultimately reflected on the Customer Statements.This may or may not adversely affect customer realized and unrealized gains and losses.

    (that means the prices you see on your screen are NOT what your really trading at. Your trading at the real market prices. And they tell you above: "GAIN Capital makes no warranty, express or implied, that Bid Prices and Ask Prices represent prevailing bid prices and ask prices."

    That means they know their prices don't represent prevailing prices.

    you are agreeing to trading blind.)

    4.3. (selected text)

    Trade Matching. GAIN Capital or its affiliates may, at a future date, establish a trade matching system or determine to route Customer’s orders to a trade matching system operated by third parties.In that event, GAIN Capital, and/or any one or more of its affiliates, shall have the right (but not the obligation), in the sole discretion of GAIN Capital or any such affiliate,*** to act for its own account, and as a counter party or as a broker to GAIN Capital customers, **in the making of markets and the purchase and sale of Foreign Exchange Contracts, Cross Currency Contracts and Metal Contracts via any medium, including without limitation, over any trade matching

    4.5. (full text)

    Position and Trading Limits. GAIN Capital reserves the right to **limit the number of Open Positions that Customer may enter or maintain in Customer’s Account. GAIN Capital reserves the right, in its sole discretion, to refuse to accept any Order opening a new position or increasing an Open Position.


    5. (partial text)

    MARGIN REQUIREMENTS. Customer shall provide to and maintain with GAIN Capital Margin in such amounts, in cash or other such forms, and within such limits as GAIN Capital, in its sole discretion, may from time to time require.Customer’s Account will be under the control of GAIN Capital. ***READ THIS:*** GAIN Capital may change Margin requirements at any time, without prior notice to Customer, and **may call for additional Margin (“Margin Call”) at (x) any time Customer’s Margin Balance falls below GAIN Capital’s Initial Margin Requirements or Maintenance Margin Requirements as applied to that Account; and (y) any time GAIN Capital, in its sole discretion, believes that it is prudent to do so. GAIN Capital may at any time liquidate Customer’s Account in accordance with Paragraph 9. ****GAIN Capital may withdraw funds from the Customer’s account without notice:(x) to ensure that Posted Margin equals or exceeds Required Margin; and (y) to satisfy any payment obligation to GAIN Capital, including commissions, fees and charges in respect of Customer’s Account.

    (MAY call means its an option- they don't have to)

    LIQUIDATION OF ACCOUNTS AND DEFICIT BALANCES. In the event of: (a) an Event of Default; ***(b) insufficient Margin, or GAIN Capital’s determination that any Collateral deposited to protect Customer’s Account is inadequate, **regardless of current market quotations, to secure Customer’s Account; or (c) any other circumstances or developments that GAIN Capital, ***in its sole discretion, deems appropriate for its protection, GAIN Capital may, in its sole discretion, take one or more, or any portion, of the following actions: (1) satisfy any obligation Customer may have to GAIN Capital (either directly or by way of guarantee or suretyship) out of any of Customer’s funds or property in the custody or control of GAIN Capital; (2) sell or purchase any or all Contracts and any securities or other property held or carried for Customer; and (3) cancel any or all outstanding Orders or Contracts or other transactions or commitments made by or on behalf of Customer. Any of the above actions may be taken ***READ THIS:**without demand for Margin or additional Margin, without prior notice of sale or purchase or other notice to Customer, Customer’s legal representatives, heirs, executor, administrator, trustee, legatee, successors or assigns and regardless of whether the ownership interest is held individually or jointly with others.

    (this means: they can change your margin requirement without notice or reason- or margin call- They then have the right to liquidate your account- again- without ever notifying you.)
    Agreement To Use Collateral (partial text)

    Customer authorizes GAIN Capital to sell, pledge, rehypothecate, assign, invest, commingle and otherwise **use any Collateral held by GAIN Capital, including, but not limited to,** using the Contracts as collateral for a loan to GAIN Capital,
    (your giving them the right to use any and all of your money - your margin- however they want- whenever they want- including putting it up against a loan to them. That means if they fail to pay their loan- your money is whats taken)

    After reading this- would you want to open an account with them?
    After reading the fine print for the top 15 brokers I can tell you- none of them sound good. All of them are having you agree to allow them to mess with their numbers. ONLY ECN BROKERS TRADE THE FOREX. All others are running private online games they wrote the programs for. Your playing the dealer on a rigged table.

    I think as traders- we need to unite against whats going on here. Demand some regulations- rules. They have you all believing your trading the forex when your really trading on an online video game. You cant win against a games programmer because they control the program.
  8. What does: They are off-exchange mean?

    There is no central clearing for Interbank.
    There is no exchange for Interbank.
    There is no "Close" price for Interbank.
    There is no "High" price for Interbank.
    There is no "Low" price for Interbank.
    There is no "Open" price for Interbank.

    There are only Bid/Ask prices for Interbank. Therefore, there can be no exchange for Interbank because all exchanges require Time & Sales data, which in turn requires an Open, High, Low and Close price structure within some segment of a 24hr time-frame.

    Before, and after Bretton Woods, there was no central exchange for foreign currency. So, when did this "Exchange" that current Forex Intermediaries 'don't belong to' ever come into being? People often times confuse the word "Exchange" in FOREX (Foreign Exchange) to mean that there is some kind of central clearing. There is none. There are current attempts by some being made right now, that would push the Forex into a transparent Global ECN Matching System, but that does not exist for the estimated $5 Trillion being turned-over right now.

    The word "Exchange" in Forex, simply means a protocol for converting one currency into another, that's it. Not a centralized mechanism for settling currency transactions. All Forex settlement procedures right now are mostly proprietary in nature and vary among Interbank participants, depending on who your Intermediary might be.

    So, please clarify the word "Exchange?"