Sneak A Peak Into A Highly Regulated FX Broker – Forex.com Review
Forex.com is a hugely popular name in the Forex market and has evolved into a mainstream broker ever since the company was founded in 1999. Forex.com is the brokerage arm of Gain Capital Holding, Inc., which is a company listed on the NYSE with a large market capitalization. The broker is known to transact millions of dollars in trading through their multiple brokerage firms on a daily basis, which is a clear testament to their market strength and sheer global presence.
Forex.com has been the subject of numerous controversies, mainly due to the complexity involved in catering to a huge customer base and the typical problems that affect mainstream FX brokers. Nonetheless, Forex.com has surged through all the turmoil to emerge as a highly successful and one of the most established Forex brokers that the markets have ever witnessed.
Forex.com is a market maker and offers its brokerage services as an STP broker through an automated dealing desk. While this is in direct conflict with a trader’s interest, Forex.com has been proactive in ensuring a fair and honest brokerage service that aims to reduce investor complaints. In this Forex.com review, we cover some of the major aspects of the company to find out the overall trading experience, and what one should expect while dealing with the firm.
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Has The Broker Taken Care Of Implementing A Good Regulation Status?
Forex.com regulation is an integral feature of the company that has allowed it to capture a significant market share in retail Forex trading. Almost all modern day traders are very particular about choosing a highly regulated Forex broker. In recent times, several regulatory authorities have revamped their regulatory protocols to enforce strict regulations that aim to prevent instances of financial fraud, cheating, and malpractice.
Under normal conditions, an FX broker is usually regulated by a single regulatory agency, which should provide them with a regulated broker tag that is required to satisfy a majority of traders in the market. Only a handful of brokers takes the time and effort to establish their presence in different parts of the world and become regulated by multiple regulatory authorities.
Forex.com is a proud member of that elite group of multi-regulated brokers. The firm is regulated by the FCA (UK), the ASIC (Australia), the FSA (Japan), the SFC (Hong Kong), the IIROC (Canada), and most importantly, Forex.com is also regulated by the CFTC and the NFA. Therefore, Forex.com is one of the very few brokers that accept traders from the US, albeit with modified trading conditions than those offered in other parts of the world. The very fact that Forex.com has committed to extensive regulation should instill an enormous amount of confidence and security into the minds of their traders, which is one of the reasons why the company has seen a tremendous rise in popularity over the years.
Does The Regulation Hinder Options For Small Traders?
The broker provides only one type of Forex.com account for all traders, irrespective of the deposits. Traders can join Forex.com using a $250 initial deposit, which is not a huge amount, but comparatively, the barrier of entry is slightly higher than most of the other established brokers. There is a premium account option available for deposits larger than $25,000, but the benefits and other features are customized to suit individual trader requirements.
US based accounts can utilize a maximum Forex.com leverage of 1:50 without the option of hedging, which is designed to satisfy the CFTC and NFA guidelines. All other traders from around the globe can enjoy a maximum leverage of 1:200 along with the opportunity to use hedging strategies. We prefer trading on lesser margin, but some traders are always on the lookout for the highest amount of margin and lowest amount required for opening an account. These traders will be disappointed to find that Forex.com does not offer a lower initial deposit or a higher leverage.
Traders can choose between two different Forex.com platforms, the standard MT4 and the FOREXTrader Pro version. Traders can choose either of these platforms at the time of signing up, and the FOREXTrader Pro version offers a few additional advantages over the MT4 platform. FOREXTrader Pro is a proprietary Forex.com trading platform that was designed and developed to meet the rigorous demands of their traders. Having spent the best part of two decades in the industry, Forex.com has amassed a wealth of information, which is evident in the way their platform performs under the real market conditions.
Forex.com mobile traders can use the mobile versions of the FOREXTrader Pro or the MT4 using their global account information. The FOREXTrader Pro mobile app is significantly more advanced than the MT4 mobile app, but traders who are comfortable with the Meta Trader platform will find it to be less intrusive than the company’s proprietary platform. Mobile trading platforms are made available for all smartphones and tablets running on iOS or Android operating systems.
Are The Forex.com Spreads Competitive?
Forex.com spreads float around 1.8 to 3 pips, which is fairly higher than ECN accounts. However, the lack of any commission should help to keep the costs in check. Forex.com does not provide ultra-competitive spreads, which is a major weakness for the company, considering that similar market maker brokers offer spreads starting from 1 pip. As a market maker, all trades are executed by Forex.com at market conditions. Hence, it is common for traders to experience wild swing in spreads, slippages, as well as re-quotes. The broker does compensate for such price variations by offering super-fast trade execution times, which guarantees to open and close positions in under one second. It is imperative for all Forex.com traders to be wary about slippages and accommodate price differences in their trading strategies.
Trading on Forex.com offers a unique sense of security owing to their strict regulation and the vast amount of experience in the industry. It is virtually impossible to exist in the market for such a lengthy duration if a company does not satisfy its clientele. Therefore, despite the negative feedback that the broker has gathered over the years, there are still huge positives that should enable the company to continue being a market leader in the highly competitive marketplace.