The FTMO ban on USA traders is in light of the illicit use of CFD products, meaning traders in America now have to find an alternative product to trade with, even if it is through a prop firm. Before this, traders were able to get away with it since the prop firm was the asset owner and the trader simply took a fee for their efforts. Now, CFDs are taking a further hit as prop firms no longer accept USA traders.
So what alternatives are there for Americans, and will they change the rules once again forcing people to learn a new platform and asset class?
Explainer Video: FTMO Ban US Traders
Can Americans Trade on FTMO?
FTMO offers CFD contracts for their traders to use on Metals, Forex, Indices and Crypto, meaning that Americans are no longer eligible to trade with FTMO. This is due to the use of CFDs rather than futures. Americans cannot trade with FTMO anymore but there are alternatives.
Does FTMO do Futures?
FTMO do not offer futures, which is why they no longer accept US clients.
Prop Firms that Accept USA Traders
Trade Day – Preferred selection for futures trading however there are fewer discounts. The big key is the drawdown rules are fairer.
Apex Trader Funding – Most popular futures prop firm based in Texas and offers amazing discounts. Get a minimum of 50% offor the best offer provided by Apex at the time, sometimes up to 90% off. One this to note though, is the trailing drawdown trails on your open trades, not just closed trades balance.
Futures Prop Firms
At the moment there are less futures prop firms on the market than CFD prop firms. This could change though, as the USA demand for prop firm access will likely be a key driver for business and prop firms may look to shift into the futures trading space.
As mentioned above, the main two prop firms using futures are Apex and TradeDay
Are Futures Prop Firms Difference from CFD Prop Firms?
At the moment, prop firms using CFD offer better rules when it comes to drawdowns, holding positions overnight and more. This could be due to the extensive competition in the CFD industry globally, pressuring prop firms like FTMO and Funded Engineer to introduce better rules. One major change that was recently introduced into the industry was the removal of time limited evaluations. The industry standard for a challenge to reach around 10% return was 30 days (including weekends). Since this was forcing a gambling mindset to try pass within the timeframe, regulators stepped in and changes were pushed. Now prop firms generally offer challenges that don’t have a 30 day time limit so you can take your time and actually trade like a pro to pass.
Can USA Trade Forex CFDs?
USA citizens can no longer trade forex via a CFD or contract for difference. Americans can however trade forex using futures contracts. This allows US citizens to trade forex and other assets by using a futures contract instead of a CFD contract.
What is the Difference Between CFD and Futures?
The difference between CFD and Futures is that a CFD is not a centrally exchanged product and can be manipulated by market makers and brokers. It also hides the flow of orders to the larger market because brokers have their own order flow that isn’t released as information. That means that the volume information is only that of the liquidity provider being used, rather than the entire market as a whole. On the flip side, futures contracts are traded through a central exchange, giving transparency and clarity on order flow. That means that every trader has full view of all orders flowing in and out of the market.
Can Americans Trade Forex?
It is still legal to trade forex, but the product used to trade forex is important. USA still allows the use of futures contracts to trade forex. The pricing moves basically the same way, but the common platforms are different and the way the money side of it works is a little different to, but essentially it all works the same way.
