Mon. Oct 26th, 2020
forex.com review by intellinvestors

FOREX.com Review

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

BROKER: FOREX.com

Minimum Deposit: $50

Spread (EUR/USD): 1.1 with Standard Account

Regulation: FCA, CFTC, FSA, IIROC

Rating: 4.0/5


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).

OVERVIEW

Here's an overview of Forex.com's pros and cons as a broker:

Pros

  • Fast Execution
  • Wide range of products to trade
  • Advanced charting package
  • Well-regulated
  • Offers direct market access

Cons

  • Trading platform is not for beginners
  • Cryptocurrencies are not available with MetaTrader

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.

Cashback

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.

forex-dot-com-spreads

(source: FOREX.com)

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.

Price Execution

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.

Inactivity Fee

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?

advanced-trader-forex

(source: FOREX.com)

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.

Conclusion

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.

8 thoughts on “FOREX.com Review

  1. Interesting, I had,’t heard of this platform before now. Great article with in-depth information about the product ! I think it’s cool that you can start with only 50$ in caparison to other platform that has a minimum a big higher. I’m currently not involved with any trading platforms, but if one day I will, then I’ll definitely check out Forex.

  2. This looks like a really useful platform for people to use who are interested in trading stocks on a regular basis. My brother does this for a full time living so I am going to share this page with him, as he may find it interesting.

    However, I wouldn’t advise everyone to simply jump in and invest without any experience, as you could lose a lot of money if you are not sure where to put it. My brother studies the companies books before he buys any shares in any company.

  3. What an incredibly interesting and insightful article. I have always been intruiged, especially by cryptocurrency. I will certainly be reading the rest of your site in more detail and will bookmark it for future reference. Thanks again.

  4. I opened an on-line trading account in the UK about a year ago and am investing small amounts in ETF’s and Index trackers. The site you are reviewing appears to be very expensive in terms of their commissions and fees and doesn’t look as if it is for the small investor. But maybe I’m wrong?

    Volume that needs to be traded is also very high, which makes me think this is a platform for institutional investors, rather than the man in the street. It also appears that they focus on currency trading, although you do mention shares, commodities and crypto currencies. Are their fees the same for all trading?

    I’d appreciate if you can give me some more details please.

    1. Hi LineCowley,

      Thanks for the comment.

      You have to weigh what works for you. Spreads or commission. 

      Works the same way for the other markets:

      Standard Account = spread

      Commission Account = lower spread + commission ($5/standard lot)

      DMA Account = commission only

      And, also remember that trading CFDs involve margin and leverage which is something you should be wary of and this makes volume appear high.

      Moreover, there’s no required volume for you to trade.  There’s just a certain amount of volume traded that can get you CASHBACK.



  5. Thanks for the Forex review.  I am been curious about online currency trading services for awhile now but have not pulled the plug and gotten into investing in this fashion as of yet.  I found your review very helpful from the standpoint of explaining what is involve as well as the review of forex in general.  The 4.1 rating is encouraging.  Thanks again.  

  6. Well, I have heard quite a lot about forex, I have some friends who make use of the trader, it sounds pretty good but I haven’t given it a go myself. I like how you have given full details on forex,com. One thing I know about trading is that sometimes it can be risky. So would you recommend forex for a beginner like me?

    1. That’s up to you.  Determine the risk and your capacity to learn.  If you think you can do it, then create a plan and commit to it.

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