FXOpen Review – A Broker For Both Small & Large Investors
FXOpen has been in the FX trading business since 2005, which makes it a fairly established company in the current crop of FX brokers. The entire project began in Egypt during 2003 as a research and educational center for technical analysis, but gradually, the founders moved into the brokerage business by setting up a full-fledged Forex brokerage company. FXOpen is also well-known for their introduction of Sharia-compliant accounts, where are directly aimed at Muslim traders who are required to follow all Islamic rules of trading such as the elimination of SWAP and other interest-based fees.
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FXOpen is proactive in keeping up with the times and has evolved into a competitive broker that has designed its services to suit all types of investors. One of the primary attractions of FXOpen is their ability to offer FX trading products for a small initial deposit of just $1, which should help traders to test the market with a small capital before taking the plunge and investing huge money.
FXOpen was successful in opening up the FX market to a ton of new traders, who were previously unable to enter the world of FX trading due to high deposit requirements. FXOpen should be attributed towards bringing FX Trading to the masses, even though some companies had already started offering Micro accounts for amounts as small as $50. However, FXOpen rewrote the rulebook by providing a trading account for a minuscule amount of just $1, which was indeed considered revolutionary at that time.
Does A Small Deposit Mean That FXOpen Is Not Regulated?
For a large part of the company’s FX operations, the broker was not regulated by any agency, which saw it facing criticisms and consumer complaints from a majority of their clients. The lack of regulatory oversight does prevent companies from being completely honest with their traders. However, the company soon realized that they had to move into a different region and become a part of a regulatory organization if they are to survive in the highly competitive financial market. In 2011, FXOpen switched its operations to New Zealand, and at present, FXOpen regulation is taken care of by both ASIC as well as the FCA.
FCA and ASIC regulated Forex brokers are highly regarded for their reliability and security, which should offer a sense of confidence and peace of mind while trading with FXOpen. Regrettably, FXOpen does not provide its services to US traders, which prevents US citizens from taking advantage of the Forex markets using a small initial deposit. CFTC rules of 1:50 maximum leverage also prevent traders from opening any sizeable position using a negligible equity such as $1. Therefore, it doesn’t make sense for FXOpen to offer micro accounts in the US, but they could have set up a dedicated brokerage in the US for standard accounts, as a CFTC and NFA regulation would have added further credibility for the company’s FX operations.
Account Options, The Maximum FXOpen Leverage, Spreads, & Other Costs Of Trading
FXOpen has three different types of account that are classified according to the type of deposit and trading features. The micro account is the smallest account option that allows clients to start trading using an initial deposit of $1. The micro account is a market maker account, which attracts the highest spreads, re-quotes, and slippages. Although the micro account is ideal for small traders, the overall trading conditions are not favorable for long-term trading. The high FXOpen leverage of 1:500 also puts a strain on the trader, as lower equity and higher leverage are always considered to be the downfall of a trader.
The other two types of accounts are known as the STP and the ECN accounts, which are available for deposits higher than $300. Once again, the company displays its dedication to its clients by offering a full ECN account for a small initial deposit. Some Forex brokers offer access to their ECN accounts only for deposits higher than $1000 or even $5000. Regarding the trading conditions, STP and ECN accounts have similar features, with the exception being the FXOpen spreads and commissions per trade. While ECN accounts are associated with commissions per trades, STP accounts have higher spreads. Perhaps one of the major drawbacks of FXOpen is the spread on major currency pairs, as the broker is known to display spreads ranging from 3 to 7 pips for the majors such as EUR/USD and USD/JPY, which is certainly higher than the industry norms. All overnight trades attract a SWAP unless the trader has opted for an Islamic account, which eliminates the concept of interests on margin or other fees.
Does FXOpen Have A Proprietary Trading Platform?
Traders have access to the MT4 terminal as the standard FXOpen platform for all types of ECN, STP, and Micro trading. The broker hasn’t bothered to develop a proprietary trading interface, which is not necessarily a bad thing, considering that the MT4 is the most widely used trading software in the world. FXOpen mobile traders can also log into their trading accounts using the MT4 app designed for Android and iOS. FXOpen uses a bridge technology for trade execution, which is developed by the company for their ECN accounts. ECN accounts are by far the best regarding trade execution and server speeds. However, the Micro and STP accounts are slower in comparison.
FXOpen offers access to a VPS server for traders looking for lower latency and super-fast execution speeds, which are available for high-volume traders. Other traders can avail this service for a $30 monthly fee.
FXOpen also supports a wide variety of payment options, and all deposits and withdrawals are made instantly. The withdrawals do take some time for verification, but FXOpen is one of the best Forex brokers when it comes to initiating fast withdrawals. Although users can make payments through bank transfers, credit card payments, or through electronic payment systems, FXOpen charges a fee for each transaction. FXOpen clients should check with the FXOpen representatives regarding the fees and cost of a transaction before making a deposit or withdrawal.
FXOpen is the perfect broker for investors with a small initial capital, or for institutional traders who are looking for a reliable and secure Forex broker. Traders can also test their trading skills using an FXOpen demo account, but the ability to make a small deposit is certainly a good way to test the markets without risking too much. Apart from a few complaints about the inefficiency of their customer service department, FXOpen is certainly a high-quality broker that is perfect for traders from different backgrounds.