This post is a review about Forex.com, but do note before reading the rest of the article that 73% of traders lose their money when trading with this broker. You could risk losing your capital as well, so please consider if you fully understand complex financial instruments such as CFDs before you start trading or seek the opinion of your investment adviser.
FOREX.COM | REVIEW
Minimum Deposit: $50
Spread (EUR/USD): 1.1 with Standard Account
Regulation: FCA, CFTC, FSA, IIROC
FOREX.com has been active in offering online currency trading services since 2001. Their parent company, GAIN Capital, is based in Bedminster, New Jersey, and trades in the New York Stock Exchange (NYSE).
Here's an overview of Forex.com's pros and cons as a broker:
What can you Trade?
FOREX.com allows you to trade currencies, shares, indices, commodities, and cryptocurrencies.
- Forex: The available currency pairs you can trade with them are currently ninety-one (91).
- Indices: The number of tradable equity indices is currently at seventeen (17).
- Shares: You can trade more than 4,500 equities.
- Commodities: There are five (5) metal CFDs and nine (9) commodity CFDs available on their MT5 platform.
- Cryptocurrencies: The cryptocurrencies they have available are: Bitcoin, Ethereum, Litecoin, and Ripple.
How are they regulated?
FOREX.com and its affiliates are regulated by the Commodity Futures Trading CommissionCFTC in the U.S., the Financial Conduct Authority (FCA) in the U.K, the Financial Services Agency (FSA) in Japan, the Investment Industry Regulatory Organization of Canada (IIROC), and the Australian Securities and Investments Commission (ASIC).
What types of forex trading accounts can you open?
There are three types of accounts you can open: standard, commission, and DMA (Direct Market Access) account.
The standard and commission accounts differ in spreads in that the standard account has larger spreads. However, with the commission account, clients get charged with a commission after each transaction.
The DMA account is similar to the commission account as both are charged with a commission, but the DMA provides access to bids and offers coming from a pool of liquidity providers. This is great for traders looking for the best prices in the market. However, the Direct Market Access account is limited to only 58 currency pairs along with gold and silver.
One benefit you can take advantage of is the Active Trader Program, which grants you cash back for a certain volume traded.
This means that whenever you reach an amount threshold each month, a fixed amount of dollars go back to your account.
For example, you reached $30 million in trade volume in one month, $3 will be the rebate per $1 million -- that's equal to $90, which is $3 x 30.
One thing to note about the Active Trader Program is that you have to deposit a minimum of $10,000, or your trading volume must add up to a minimum of $25 million each month. And, this program is available only to the Standard and Commission accounts.
What is the minimum deposit?
The minimum deposit is only 50 units of your selected currency. For example, your currency is USD, so the minimum is $50.
However, they do recommend at least $2,500 because $50 places you at a 20:1 leverage already, which means that it doesn't take more than -500 pips on a micro lot to knock you out of the market.
What are the spreads?
With a standard account, the spread of an actively traded currency pair like the EUR/USD can go as low as 1.1.
With the commission account, the spread is 0.2 for the EUR/USD, but as mentioned, there is a fee, which is $5 fee for every 100,000 units traded.
And, with the DMA account, there's no additional markup from FOREX.com on spreads, and the commission gets discounted upon reaching higher and higher volume.
For example, if the traded volume is less than $100 million in one calendar month, the commission is $60 per million, which totals $6,000. But if the volume exceeds $100 million but not more than $250 million, the commission is reduced to $40 per million traded.
FOREX.com tries to provide the best pricing for their clients through optimum execution, and as a result, they're able to improve the pricing of their clients' limit orders. Their average execution speed is 0.03 seconds.
There is a $15 fee for an account of less than $10,000 without any trading activity for 12 months or more.
What are their trading platforms?
The trading platforms are accessible on mobile and desktop. The classic MetaTrader 4 is also available but is deficient in advanced charting features, other types of orders, gold and silver trading, and others.
FOREX.com does have its own trading application called the Advanced Trading Platform, which boasts more than 100 technical indicators and 15 chart timeframes that you can directly trade from.
The Advanced Trading Platform also includes features like a trailing stop order that is designed to limit your losses and a partial close order, which is used for securing profits while letting the remainder of your trade exposed in the market.
With mobile trading, FOREX.com has its own app for trading too, unlike other brokers that use the MetaTrader version.
Do they provide learning tools?
From the Education section of FOREX.com's website, you'll find a wealth of information about forex trading.
You have the option to select from beginner to advanced level, and it's all for free. You can also take a quiz on the same page to know what type of trader you are.
Do they provide research?
Although their research may not compare to IG's DailyFx, it does do a good job of compressing daily information from the market and making a concise analysis of how it could potentially affect the financial markets.
The technical analysis they provide offers only a pretty standard technical outlook on the major currency pairs and how some events had affected particular currency pairs.
And, in case you want someone to hold your hand as you analyze market data and develop a trading plan, FOREX.com extends an option to trade with a market strategist, provided that you qualify for it.
Do they have client support?
Mainly, there are three ways to get in touch with client support: phone, email, and chat. And, they're available from between from 10 am Sunday to 5 pm Friday ET.
For general questions, FOREX.com has an FAQ section that answers questions that range from Account Opening to information about their products.
FOREX.com is great for active traders because of their fast order execution and their cashback feature enhances the overall trading experience. Moreover, their trading platform is exceptional in that it provides rich technical studies as well as the capability to develop indicators.