I have a ThinkorSwim paper money trading account and I'm doing great with the FOREX. My question is what type of qualifications are needed to be approved to trade the Forex real money? I just found out there is a check you have to go through. What qualifications do you need?
There is a check you have to go thru to open any type of trading account. It is simply for the Broker to cover there a$# and it is also where they get you to sign all of the disclosures. The only QUALIFICATIONS I've ever found for opening any type of account is the minimum $$$ they require to open the account. You also have to consider how much money the Broker will require you to have in your account to buy a Lot for forex or contract for futures. Example....if you were trading futures TOS might require you to have $5600 in your account for every contract you bought on the ES, but Infinity Futures might only require you to have $500. This can be important b/c on entering the trade the most important thing is the amount you are risking...let's say 2%. So if you opened the account with 10K and purchased 1 contract your stop would be at -$200....where it gets interesting if the trade moves in your direction and you have reason to believe it has a lot of room left you can purchase another contract which will bring your cost basis up but now your making double the profit if the move continues. If I've already reached my weekly or monthly goal I'll keep scaling in which gives the ability to make a HUGE leveraged profit if I'm willing to raise my stop to my average buy/sell price (cost basis) and risk getting stopped out for a scratch trade. The reason I mentioned this is with TOS you will be able to buy less contracts than with other brokers.
Leverage is bad if a trader risks too much on entering a trade...but it is great if your scaling in to a Winning Runner.
This example was based on futures not forex but while I'm a fan of TOS there margin requirements tend to be on the high end. Not sure if there requirements are different on Forex vs. other brokers but it is worth looking in to. I recently spoke to a few forex brokers and to buy the EUR/USD they required around $2400. Call TOS and see what they say.
If you like the TOS platform for making decisions many Forex brokers have ways you can enter trades without having to have their trading platform open. For example a small window that will sit on top of your TOS platform, or many will let you place orders via a web browser...smart phone app...iPad app etc..
For information, some brokers indeed require some "qualifications".
For instance, when opening an account at Interactive Brokers (IB), one should give the following information:
- Personal financial situation: Net Worth, Liquid Net Worth, Annual Net Income
- Investment objective: preservation of capital, income, growth, trading profits, speculation, hedging
- Investment experience for each type of instrument: nb of years, nb of trades per year, total trades
This information is apparently processed by the broker since IB sent me an e-mail to have some clarification on one of the topics. However, no evidence or justification paper was asked (in my case).