Why LMFX Is A Good Choice For U.S. Traders, Too
Before reviewing LMFX broker, what should you consider when shopping around for a Forex online trading broker, either for the first time or, if you’re an experienced trader? For U.S. traders, due to rather severe restrictions imposed by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) in this country, many U.S. Forex traders have opted to open an account overseas, where these restrictions don’t apply. Some of the advantages of having an offshore account are:
- Higher leverage (up to 3500:1)
- Hedging is allowed, within the same currency pair
- No FIFO, (first in first out) which means, a trader does NOT have to close the oldest opened positions first, in case they are dealing in multiple trades of the same size and pair.
These are the main advantages you get from overseas brokers (basically anywhere outside the U.S.), and these are a big deal, especially the higher leverage. Higher leverage means, simply put, more buying power, within a trade. Which equals higher profits. There is a gigantic difference between 50:1 leverage vs 500:1. You can make 10x the profit on the same trade, with the higher leverage. This is why many U.S. traders open foreign accounts. And yes, it’s legal to do so.
In a moment, I’ll go into why LMFX is also one of the best Forex broker for beginners.
Do All Overseas Brokers Accept U.S. Investors/Traders?
No, they don’t, so the question is, which offshore brokers do accept U.S. traders? There are only a handful of really trusted ones. You don’t want to go with a brand new, unproven broker, or those who seem to have a questionable reputation based on whatever info you can find on them, online. One of the best places to get unbiased reviews on brokers, where traders share their experience in the forum, is Babypips.com.
LMFX is one of the reputable, trusted, European Forex brokers that accepts U.S. traders. So, who is LMFX and how do you sign up with them? There are just a few steps involved.
LMFX has been in business since 2015 but I could not obtain any specific info on who founded it. This seems to be the norm with offshore brokers, you can’t always get background on ‘who is the management’. But, the most important fact to make note of, is that they deposit client money in segregated accounts not linked to their own, so if anything were to go wrong, they would reimburse all investors from that separately maintained account. Therefore, no conflict of interest.
It is very easy and quick to open a trading account, but it’s always good to start on a free Forex demo account first to test out the MT 4 trading platform, just to be sure. Are there any glitches with the platform? Is the execution of trades fast? It’s good to check these things for yourself before you go live.
What Is Needed For Opening An Account With LMFX?
You simply fill out the sign-up form, and then select your funding option. LMFX funding methods include wire transfer, credit cards, and payment processors such as Skrill, and Neteller. (Brokers outside the U.S. don’t usually set up with Paypal.) Once your account is funded, you can start trading right away. You will however, need to provide documents for withdrawal of capital, such as driver’s license, and a recent bill to show your current residence.
LMFX seems to have excellent customer service, so that is an important indicator of how reliable and professional they are. I have used their chat window to get answers right away.
Their customer support, via email, gets back to you within the same business day. I’ve found their response to my queries to be impeccable, and their English is very good.
They have offices in several locations around the globe, their main offices are in Macedonia, which was a state of the former Yugoslavia.
Additional Services LMFX Offers Its Traders
LMFX has really gone all-out to help, and accommodate its clients, with educational material. This makes it great for beginners, you start on a demo, you go through their video tutorials, and learn about the trading tools available to you, and how to use them. You can also win money by using the demo through their monthly contest. Keep reading!
They also have a daily and weekly market analysis, and a trading calendar enabling you to see at a glance, what news announcements will be coming up that can impact the market. This helps you to stay out of the market where prices can spike suddenly, and can sometimes trigger stop losses, due to temporary spikes in price.
LMFX also allows you to trade commodities, indices, metals & oil, as well as ‘shares’. What is ‘shares’ trading? It means you can buy and sell stocks within your trading account without actually purchasing the underlying stocks.
Known as single stock CFD trading (a ‘contract for difference’, a form of derivative trading), CFD trading enables you to speculate on the rising or falling prices of fast-moving global financial markets like indices, commodities and currencies.
Does LMFX Have Bonuses?
When you start trading, it’s a good idea to start with a smaller account and build it up over time. One way to expedite that process is to take advantage of the broker’s matching bonus, which is something many brokers offer. It means if you deposit 1K to begin with, the broker will match that amount and you will have a 2K account to work with then.
The only ‘downside’ is that, you must meet their requirements for withdrawal, which could take up to several years. You would have to trade at least 100 lot sizes with closed positions, to withdraw your bonus capital.
This is both good and bad. It’s bad if you didn’t understand the terms to begin with, and you want to withdraw some of your profits before you meet the requirements. It’s good if you are looking at your trading account as a long term investment, of ‘building it up’ for several years, through compounding.
So What Is The Verdict On Receiving Matching Bonuses?
My recommendation is, don’t opt in for the matching bonus unless you clearly understand its terms, and are prepared to wait, maybe a much longer time than you expected, to fulfill the broker’s requirements. It is how they make their money back, by you placing a certain amount of trades first, through spreads and commissions. It can take a looooong time to trade 100 standard lot sizes if you start with a tiny account.
If you are patient, however, this is the way to go, to have higher trading capital to start with, thus increasing your profits faster. Many newbies don’t get it, and become livid when they realize what they consented to but did not really understand! But, the rules are the rules, and once you receive that bonus, brokers have no mercy and will not budge!
They also offer something called the Phoenix Recovery Bonus, because they know that sometimes newbies can ‘blow up’ their first account, and they help you out with that!
They give you a 15% recovery bonus so you can start up again. I had never heard of this before. That’s pretty cool!
Contests, Awards, And Crystal Balls, Oh My!
This broker loves contests! They offer what’s called the ‘Learn And Earn’ contest, which is for beginners starting out on a demo account. This is an excellent way to get your motivation on, and start moving your learning curve ahead, as a trader. Win money through simply using your demo account, without any risk.
Then there is the LMFX ultimate traders contest, where top traders with live accounts can win up to 1k per month.
And last but not least, they have the ‘Crystal Ball Contest’, where traders predict the most accurate future exchange rate of the currency pair of the week. You register with your mobile number and the three closest estimates to the closing price will win first, second and third place with rewards up to 1K USD!
Is It Easy To Withdraw My Money?
I have not been able to find any recent, serious complaints about LMFX’s withdrawal times and methods. There were complaints going back several years, but I think they have worked out their issues, because they are now a top recommended FX broker, and that would not be the case if withdrawal of client capital were a problem.
The truth is, even good companies get complaints, the question is, do they handle it? I think LMFX is on top of their customer service, and resolves all issues promptly. I definitely recommend this broker, and taking full advantage of all they offer. (For another Forex broker comparison, read here). So if you have your own questions for LMFX, go to their site, and contact customer support.
I wish everyone the best in their journey. Always be aware of the risks associated with trading, so be wise, and trade well! If you would like a bit more info on trading strategies that can help you safely speed up your profits, go here for more details.
Please leave a comment or question, I would love to hear from you!