I think you are conflating several issues. Pros and cons of prop outfits are one thing, fx cash an entirely different thing. I am not a fan of any prop shop that asks traders to put up their own money. Financial markets offer sufficiently leveraged instruments. If that is not enough then a retail trader simply is exceeding prudent risk levels. Period. But pros and cons for or against fx cash is an entirely different story. From a risk perspective cash fx is one of the safest instruments after investment grade bonds one can trade (that some beginners abuse leverage is their own fault) . The market is the most liquid in the world, fx are kind of macro instruments, meaning they are not jerked around by some bank analysts or pump and dump schemes, they trade 24/5, one can get in and out at any time at minimal cost. Leverage is sufficient and volatility is more than manageable. The question arises which broker to trade fx through. And there is unfortunately no good one for Americans because of regulations. I do not even consider bucket shop brokers. I consider a good broker one that has been in the business for over 10-15 years at least, never had a major incident of theft or client funds disappearing. A broker who is very prudent in managing its risk. A broker that passes through bank and ecn liquidity with zero markups. And even for non Americans there are very few choices: Interactive Brokers, Dukascopy, Lmax, Baxter, Pepperstone, and perhaps 2 or 3 others. The rest of the fx brokers are utter garbage who are either dishonest or have not been in the business long enough, or overcharge, or are not prudent enough re risk management. PS: this post was more in response to your post than the OP. I think he is not experienced enough and does not understand that trading at leverage multiples of greater 20 is a recipe for disaster. Even in fx markets there is the occasional 2-5% melt-down/up, sometimes within seconds or minutes, sometimes within hours and that would mean at worst a total loss of investment even with 20:1 leverage levels. And larger moves such as the depeg of Euro and Swiss Franc can even end up in debit balances and debt to the broker.
I guess there are two important points A) Business model of the "Broker" or shall we say "Trading venue" in other words Market maker or true exchange style transparency B) Client money protection in case broker goes burst With A) With Equity this is easily solved Exchange traded is better than OTC CFD With Futures or Futures based OTC CFD> Futures is better With Fx, SPot OTC or Fx Futures on a Exchange , each has pros and cons With B) As on today ( IMHO) in a English speaking western world for a retail spot FX trader the best protection a client can get against broker going broke is UK regulated FX broker Next best thing is FX futures via Uk regulated Futures broker or US SPIC covered "Hybrid " broker like IB who claims ALL money in the a/c is protected under SIPC even if the account can trade both equity and spot FX ( which I guess is IB own MM business model) There might be alternatives in other EU jurisdictions Certainly AUS and NZ client money protection is piss poor Please correct me if this observation is incorrect
I trade through a range of FX brokers through outside US entities and I know of none offering what you are looking for. FX Prop is thin offerings these days.
So you got offshore companies that signed up with non-US FX brokers basically? (I catch on quick, no? )
There are no buy-in prop firms in FX. There were a couple but they quickly went broke or ran off with the deposits. There are no K-1 partnerships in the space, so just find a offshore broker with 100:1.
1. What is "buy-in" prop firm? Meaning you bring your own capital? 2. The problem is that offshore FX brokers that will take U.S. residents are the shady ones where you don't wanna be anyway. CFTC goes hard u know what I mean? The arms of the empire are long you know and it does go after brokers who accept U.S. residents and are not registered with CFTC. So that leaves completely shady ones who dgaf
I might have mentioned it already but FX "brokers around the globe" don't accept US residents because that would be against CFTC regulations and they don't want Uncle Sam to sodomize them on a family trip to Disneyland.
OP thinks prop FX firms are safer than offshare FX brokers. That is the only reason he prefers prop FX firms I guess. But I don't think prop FX firms are safer.There are also scams with prop firms . There are a few scams in offshare brokers but most are ok. CFTC only goes after a few but most offshare brokers business as usual. If you played online poker you will understand the situation. There are a few scams but most offshare pokerooms are trustworthy. US government goes after a few of them,but most of them are business as usual.Currently ten of thousands of American poker players actually live on play online poker at offshare pokerooms.