Cobra Trading review
This broker was not featured in our 2022 Broker Review Audit. This is because, in the past 12 months, it has failed to pass our initial screening process and is not recommended by our team of experts. As such some of the information found here may be out of date.
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Cobra Trading is basically a stock broker from the US that also offers Forex trading and other allied products as part of its brokerage services. Traditionally, Forex brokers from the US have not been as successful as some of the more established Forex trading companies that are located in Europe and other parts of the world. Moreover, stringent trading restrictions from the CFTC and the NFA on Forex trading have also rendered a negative image on US Forex brokers, which have resulted in traders from around the world to avoid US Forex trading companies and instead opt for brokers from Europe and Asia-Pacific.
|Forex, Precious Metals, Equity Indices, Energies|
Cobra Trading Regulation & Restrictions On Trading
Cobra Trading is regulated by major US regulatory agencies such as the NFA and the FINRA, as per the regulatory guidelines issued by the CFTC. US brokers are required to satisfy larger capital requirements than Forex brokers in other jurisdictions, which are mainly introduced to protect investors from any type of broker irregularities. Larger capital requirements mean that brokers may tend to impose higher minimum deposit requirements for their traders, along with other costs of trading, in order to offset the cost of setting up a brokerage in the US. Most modern day brokers avoid the US markets due to the obvious drawbacks such as high operating expenses, stringent CFTC guidelines, and an overall harsh trading environment. The CFTC has been active as an organization for imposing several trading restrictions on traders and companies dealing in the Foreign Exchange market. After the economic downturn in 2008, the CFTC and other leading Government organizations have been slowly curbing the amount of freedom that traders used to enjoy in the Forex market. Nowadays, US citizens are forced to trade with US Forex brokers, as it has been deemed illegal for US FX traders to invest their money with overseas Forex brokers, which may attract significant penalties and legal issues. CFTC has also imposed restrictions on FX trading that have virtually banned traders from indulging in any strategies that include hedging, scalping, or freedom to open and close positions according to their convenience. For instance, the CFTC has imposed a maximum leverage of 1:50 for all the main currency pairs, with the organization contemplating a plan to lower the leverage further, and minimize the risk to their traders. Rules such as FIFO and no hedging prohibit a trader from investing freely, as he/she cannot open multiple orders at different times on the same currency pair, which also prevents traders from opening a buy and a sell order on a single currency pair. Therefore, if you are not a trader from the US, always consider the implications of the CFTC rules and the restrictions that are imposed on Forex trading.
Is A Cobra Trading Account Expensive?
Traders should deposit a minimum of $30,000 for a Cobra Trading brokerage account, which is exceedingly higher than traditional Forex deposits. The maximum Cobra Trading leverage is set at 1:50 as per the CFTC rules, which means that a trader will have to risk a significant portion of his trading capital to open a sizeable position in the market. The risk of leveraged trading apart, new traders won’t have the sufficient expertise, nor the market knowledge required to manage such a significant amount of trading capital at the beginning of their trading career. Lower capital requirements and higher leverage may pose a greater risk to traders, but it will at least help new traders to learn about the risks of the market before investing huge amounts of money. Professional traders may benefit from the CFTC and NFA protection, which is further helped by the different markets and products that are offered as part of a standard trading account. Traders do get access to US stocks, commodities, indices, and other ETFs, which can help a professional trader to create a diversified investment portfolio. Nevertheless, the minimum deposit requirements of $25,000 may be considered as a significant amount of money, unless you are looking for a professional trading account that comes with all the features of a direct market access brokerage.
The Cost Aspect Of Cobra Trading ECN Accounts
Cobra Trading spreads may be slightly more expensive than conventional ECN accounts, as most FX currency pairs are quoted at a minimum of 1.8 pips as standard. Share and indices trading are accompanied by commissions per trade, which depends on the instruments and the market prices for a particular financial asset. You should always ensure the price and cost of trading before opening or closing orders, as there might be significant changes in the quote and strike prices as a result of market volatility and slippage. Deposit options are limited to wire transfers and check payments, as is the norm with traditional US-based Forex brokers. The company does not allow any form of credit/debit card payment or e-wallets such as PayPal or Skrill. It’s hard to make such huge payments by any other means; therefore, wire transfers and checks are the most preferred means of deposits and withdrawals. Nonetheless, your funds are safe and secure with Cobra Trading, as the NFA and the FINRA offer the best standards of regulatory guidelines for the protection and security of client funds. All Cobra Trading trader deposits are held in segregated accounts and are protected by the Securities Investor Protection Corporation (SIPC), which provides the means for retrieving funds, establishing stock ownerships, and for taking care of any other reimbursements in the event of a broker winding up its business without warning. The SIPC works tirelessly to ensure that all investors are protected under this scheme, and it is the responsibility of a broker to update their clients’ trading balances with the SIPC and the NFA on a periodic basis through timely audit reports.
Cobra Trading Mobile Trading & Desktop Trading Platforms
Cobra Trading platforms are perhaps one of the most expensive platforms in the market for Forex platform, where traders are required to pay around $150-$250 per month for the proprietary trading platforms, including RediPlus, RealTick, RealTick Express, and the Sterling Trader Pro. A majority of Forex brokers do not charge their clients for access to a dedicated trading platform, and we would not advise traders to pay for a service that they deserve for free of cost. Even the Cobra Trading mobile apps have a monthly maintenance fee, which is certainly more expensive than the amount required to open a full-fledged Forex trading account at established mainstream Forex brokers. It does not make sense to deposit a significant amount of money into a Cobra Trading Forex account for pretty ordinary brokerage services, as traders can receive excellent services at a fraction of the cost from other leading Forex trading companies. Search through our recommended list of Forex brokers for unprecedented access to the world of Forex trading, where the broker won’t force their clients into spending more money in the hope of earning profits from unfortunate traders.
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