UFX Markets has received a lot of bad press at a number of different websites over the past months with a huge number of complaints flooding into various Forex websites in regards to the going on’s at UFX Markets the trading name of Reliantco Investments Limited. This has led many to suspect that a fine may be likely, if you take the reports of these websites seriously. Then on the 31st of January 2013 Cysec finally handed out a 100,000 Euro fine for possible wrong doing at the company.
It is important to stress that UFX Markets wasn’t found guilty of any wrongdoing rather they reached a compromise with Cysec to pay a 100,000 in light of the possible violations. It is important to note that in accordance with Cypriot financial regulation a company which agrees to such a compromise fine isn’t considered to have done any wrong doing. To read the original letter you should visit here.
However there was an interesting twist, on the same day Cysec released a second letter stating that the first letter regarding UFXMarkets was recalled with no explanation, the second befuddling letter can be found here.
The situation is very confusing, it has been speculated that the original letter was an administrative mistake and shouldn’t have been distributed on the Cysec website. The other thing that has been speculated that there was something going on behind the scene’s at Cysec.
Whatever happened it seems to be a very interesting but confusing case. I will of course report on any further developments.
- Regulation: ProSpreads, is part of the London Capital Group who operate Capital Spreads but is incorporated and regulated in Gibraltar by the Gibraltar Gaming Commission, as well as Gibraltar’s Financial Services Commission.
- Instruments: Indices, Commodities, Currency Futures and Forex.
- Features: Tight Spreads and Direct Market Access to order flows.
- Minimum Deposit: Initial Deposit £500, top up minimum of £100.
ProSpreads offer their own unique platform which allows their customers Direct Market Access, so the trader can see the current underlying price as well as seeing the order flow. While the platform isn’t the prettiest thing around, it still allows the trader to undertake full charting and other forms of analysis. The real bonus to the ProSpread platform is the access to the Direct Market which allows you to see the bids and offers, this gives a trader another tool to trade with which is not available at the majority of Spread betting firms. Looking at order flow can be very beneficial and is something that is often considered vital to trading success. As far as I can tell their is no mobile trading support, though I presume that ProSpreads probably allows their clients to open positions over the phone. While the ProSpreads platform may not be the most accessible trading platform it is clearly aimed at the professional or serious Spread bettor. For those interested in the ProSpreads platform I recommend that they check out the intro videos at the ProSpreads website.
The real special feature at ProSpreads has already been talked about the access to real market order flows and bid and offer prices. This information can really help inform your trading and is highly recommended.
The Spreads at ProSpreads are very competitive for example their Spread on the FTSE is only half a point. The Spreads on the majority of instruments offered on the platform are very competitive and are hard to beat. It should be mentioned that ProSpreads do not offer a huge array of instruments meaning that you can’t trade individual stocks on the platform, however their are a wide range of Forex, Futures, Commodities and Indices availiable to trade. If your only interested in trading these instruments ProSpreads may be a very good choice for you.
I have no direct experience with the customer service at ProSpreads, but I do have some experience with the customer service provided by the London Capital Group. All my experience with London Capital Group has been positive and I imagine that ProSpreads offer the same high quality of service as the other companies within the group. It appears the ProSpreads is relatively small company but offer a high quality of service to their limited customer base.
One downside to ProSpreads is that they are not regulated by a financial services authority but are rather regulated by the Gibraltar Gaming Commission. While Gaming regulation does ensure some client protection it is not quite as all encompassing as financial regulation, which may give some customers a bit of a concern. However, it should be pointed out that London Capital Group is itself regulated by the FSA and has a fine regulatory record, this fact may alleviate some peoples doubt about depositing with ProSpreads.
Overall, the Direct Market Access features at ProSpreads are very impressive and should be of interest to any serious Spread bettor. The only downsides to ProSpreads is the lack of financial regulation and the limited instruments available for trading.
Banc De Binary who recently became the second Cysec regulated Binary Options provider (if you exclude platform provider SpotOption Ltd.) have recently announced that they have entered into talks with the CTFC (Commodities Trading Futures Commission) regarding the regulation of Binary Options in America. They released an official statement which can be found at Forex Magnates.
In the statement they talked about being the first Cysec regulated Binary Options provider (strictly not true TopOption run by Safecap Investments pipped them to that). This Cysec regulation they claim gives an air of legitimacy to the claim that non-exchange traded Binary Options are a legitimate financial instrument. However, it should be noted that Cysec are still currently the only MiFID regulator who recognizes Binary Options as a financial instrument. So it has hardly achieved great acceptance among Europe’s regulatory regime’s.
They also announced that in line with CTFC regulations they would not be accepting anymore American clients, which seems to suggest they currently do have US Customers. Something I can’t see going down well with the CTFC especially since Banc De Binary is currently on the SEC’s PAUSE list. They go onto to state that since their inception in 2009 they operated in full accordance with all federal and state laws regarding banking and compliance. There has simply been no regulation regarding Binary Options.
In fact there has been regulation in place for Binary Options but only exchange traded Binary Options as available on the CBOE and AMEX since 2008. There is no provision for Binary Options as offered currently on Banc De Binary and on the majority of Binary Options platforms.
So what are the chances of Banc De Binary achieving US regulation? I would say that is extremely unlikely if there US platform continues to offer Binary Options as currently offered. Having previously accepted US clients won’t go down to well with the CTFC, so that seems to be something else that will go against them.
It is more likely that Banc De Binary could achieve CTFC regulation if they offered a real exchange Binary Options business like the one currently offered by CTFC regulated Nadex who are ultimately operated by IG Group. If they did start up such an offering and transferred existing US customers to this kind of platform. It shall be interesting to see what happens.
Update 13th Feb 2013: Banc De Binary Retract Original Press Statement, Full Story Can Be Found Here.
- Regulation: ECMarkets is one of the trading names of Safecap Investments Ltd. Who hold a Cysec licence and operate a number of other websites, including TopOption, Markets.com, Finexo and ForexYard.
- Instruments: Forex, Stocks, Commodities, Indices and Bonds.
- Features: Wide range of Instruments and Platforms.
- Leverage: Up to 200:1 on Forex, Up to 100:1 on Commodities & Bonds, Up to 20:1 on Stocks.
- Minimum Deposit: $100
Being a Safecap Investments brand ECMarkets offers a similar range of platforms to the other brands in the Safecap stable. At the core of the ECMarkets offering is the well known and renowned MetaTrader 4, many will already be familiar with MetaTrader. The MetaTrader platform from ECMarkets functions as you would expect allowing you to use Expert Advisors and undertake all the technical analysis you would expect to be able to make. However Expert Advisor Stop Losses must be set at least 80pips away from the opening price which would mean quite a significant loss. ECMarkets customers also have the option to use the Srix Webtrader which is a well known Java based webtrading application and while not being as advanced as MetaTrader allows you to trade the markets successfully from any computer which doesn’t have MetaTrader installed. There is also the ECMarkets mobile trader which supports Mobile trading from most smartphones and while the mobile trader doesn’t offer a huge degree of different options it is still powerful enough to open and close positions while on the move. There is additional the option to use ECMarkets Mobile trader which I believe is a version of the popular social trading software Mirror Trader, this allows a trader to copy other traders trading signals thus automating their own trading.
What is unique to the Safecap Investments platforms of which ECMarkets is among, is the wide range of different instruments that one can trade. These include a decent range of Stocks, Commodities and of course Forex, but more interestingly those who trade at ECMarkets can trade a range of different Bonds. Another decent feature of ECMarkets is that they offer a decent range of trading platforms to trade the markets.
The Spreads on offer aren’t the greatest but they are also not the worse. Major Forex pairings all have 3 pip spreads which is considerably larger than offered at some of the more competitive brokerages, however these spreads are still tighter than those on offer at websites such as eToro. While Spreads on Forex are fixed Spreads on other trading instruments tend to be floating and when at their lowest are quite competitive but due to the nature of floating spreads can widen during periods of high market volatility. But some of the Spreads on Stocks are not too bad and make ECMarkets a good option for those wishing to trade particular European Stocks.
Customer Service at ECMarkets has a pretty decent reputation with staff members working diligently to resolve customers problems. ECMarkets also provides a number of different toll free numbers for those who want to get into contact with them. All the different customer service interactions I have had with Safecap Investment companies have been pleasant enough and I imagine it to be the same at ECMarkets. There is also the option to communicate with ECMarkets through a 24/5 Live Chat feature, with you being put through to a customer service agent within a couple of minutes. Overall, customer service seems pretty reasonable and doesn’t ring any alarm bells.
As I have mentioned before hand ECMarkets is one of the trading names of Safecap Investments Ltd. which hold a full Cysec licence allowing them to accept clients from throughout the whole European Union. To the best of my knowledge ECMarkets has never gotten into trouble with the Cypriot regulatory authorities and has a totally clean regulatory record. While Cysec isn’t considered Europe’s toughest regulatory body you will still receive the minimum protections as set out in MiFID, which is something which can help you sleep better at night.
Overall, ECMarkets is pretty decent but I wouldn’t place it among the elite level group of Contract for difference providers. However, ECMarkets may be a good place to trade depending on the instrument you intend to trade.
- Platform: Powered by the SpotOption, the industry’s largest platform provider.
- Regulation: TopOption is a trading name of Safecap Investments Ltd. the operator of Markets.com, Finexo, ECMarkets and ForexYard who have held a Cysec licence for a number of years. TopOption’s platform provider SpotOption also holds a Cysec licence which they acquired in 2011.
- Unique Features: TopOption offers 1 to 1 coaching and was the first Binary Options platform to operate with their own Cysec licence and not under the SpotOption label.
- Instruments: Over 200 different instruments including Stocks, Commodities, Indices and Forex.
- Minimum Deposit: $100 and minimum Option size $100
As TopOption is powered by the SpotOption platform things are pretty much as you would expect. If you have used a Binary Options platform powered by SpotOption before you will instantly recognize the layout and you should be able to start trading in no time. Those who have no experience with Binary Options trading should be able to learn how to use and trade Binary Options in no time. Due to the fact that TopOption is powered by the SpotOption platform there is nothing particularly unique about the TopOption platform as their are a number of other platforms which offer similar features etc. This being said the design of the TopOption platform is pretty nice and is easy on the eyes which is always a plus. However as far as I can tell their is no mobile trading platform on offer at TopOptio which is a little disappointing.
Being a SpotOption powered platform there is nothing particularly unique when it comes to the trading platform. However, TopOption offers one to one tuition regarding the trading of Binary Options. I can’t answer how good this one to one tuition really is, but it is still may be a nice feature for those who have no clue about trading or Binary Options. More interestingly TopOption was the first Binary Options platform to be fully MiFID regulated in its own rights, previously all platforms relied on the regulation of SpotOption who powers the software of the platform. However recently other Binary Options providers have gained full regulation most notably Banc De Binary.
I can’t find many neutral reviews of TopOption yet, so its hard to judge the quality of the customer service. But generally Safecap Investments Ltd. gets pretty decent coverage regarding their customer service. I had a brief live chat with the operators at TopOption and they seemed helpful and nice enough. TopOption also provides a number of different ways to contact the customer support at the company. The location of where TopOption is based is also very transparent, so my first impressions seem pretty positive.
TopOption is trading name of Safecap Investments Ltd. who hold a full Cysec licence. As Cysec is part of MiFID this allows TopOption to accept clients from throughout the Eurozone. It also provides investors with up to 20,000 Euros compensation should Safecap Investments Ltd. go under. This provides you with a decent amount of protection should Safecap Investments fail. Currently Safecap Investments Ltd. has a completely clean regulatory record with Cysec.
Overall, while I don’t rate Binary Options as a product preferring CFD’s or Financial Spread bets, I would have to say that TopOption is probably one of the better Options for those who want to trade Binary Options.
For those who do not not know what a Fibonacci retracement is I will give a quick introduction. Fibonacci retracements are a popular piece of technical analysis used to determine resistance and support levels. They are named so due to their use of the Fibonacci sequence discovered by Leonardo of Pisa who was also known as Fibonacci. The use of Fibonacci retracements is based on the idea that markets will ultimately retrace a portion of a move in a predictable manner, after which the market will continue to move in the original direction.
Do Fibonacci retracements work? Well there are certainly a huge number of people who claim that you can make huge profits from using Fibonacci retracements. However I think there are plenty of reasons to be skeptical about the use of Fibonacci retracements. For example, Burton Malkiel who is best known for his book A Random Walk Down Wall Street completely rejects the idea that you can use Fibonacci retracements profitably. When he studied the use of Fibonacci retracements and technical analysis in general he found that one could not make any valuable predictions using Fibonacci retracements.
What then explains the appearance of Fibonacci retracement levels acting as support or resistance levels? Well according to Malkiel, asset prices display signs of a random walk and the fact that Fibonacci retracements appear to sometimes act as support and resistance levels can be explained away by pure coincidence. With traders being unable to outperform market averages over the long term.
This view seems to align with my own experience with Fibonacci retracements. I have never found them to be a particularly reliable predictor of market behaviour, for example take a look at the above 5 Minute chart (Click Image to Englarge). I have highlighted a number of times when it appears that the Fibonacci retracments are acting as support and resistance levels, but as you can see more than most of the time they don’t appear to work. I have spent today drawing a number of different retracements with very little success.
One reason that Fibonacci retracements are supposed to work is due to the fact that a large number of traders put their faith in them. This makes Fibonacci retracements some kind of self fulfilling prophecy with traders opening and closing position on the basis of these retracement lines. As I see it, there are two problems with this view. Firstly, I’m not sure that many traders do put faith in Fibonacci retracements and even if a decent proportion do this may still not be enough to sway the market. Secondly, Fibonacci retracements are quite subjective in the sense that it is possible to draw a trend line in a number of different ways, each which would effect where the retracemnts are placed.
In conclusion I really sincerely doubt whether Fibonacci retracements can be used on their own to any effect. For me the jury is still out on whether they can be used in conjunction with other forms of technical analysis, but personally I think any application that Fibonacci retracements can have is really quite limited.
- Regulation: Appears to be a completely unregulated company based in the Seychelles, Caesar Trade is the trading name of Caesar Trade International Ltd a Seychelles registered company with a PO BOX address. However from their Youtube videos it appears that the sites owners are American.
- Instruments: Forex, Commodities and Indian Shares
- Features: Nothing Unique.
- Leverage: Of up to 100:1 but depends on the Instrument.
- Minimum Deposit: $25
Caesar Trade offers MetaTrader 4, a SRIX Webtrader and SRIX Mobile trading platform. All of these are reputable platforms which many people will have heard of before. In fairness to Caesar Trade they allow their traders unlimited use of Expert Advisors and do not put any limit on scalping advisors. However, I didn’t personally download the platform as I was worried about the security of the application. As Caesar Trade has one of the least professional looking webpages of any Forex brokerage I have come across, though a number of websites do state that the site is clean of Malware and Spyware.
Caesar Trade offers traders the ability to trade Indian shares as well as the ability to open a free demo account. Apart from this there is nothing unique or special about Caesar Trade.
The lowest fixed Spreads on Caesar Trade are 3 pips on major Forex pairings, but when it comes to more exotic pairings the pips become quite significant with the spread on GBP/NZD being a huge 25 pips. On some of the Indices and Commodities there are no spreads but absolutely huge commissions for example the IBEX35 has a fixed commission of $65. The Indices and Commodities which don’t have these huge rates of commission have instead huge spreads. In conclusion I feel that CaesarTrade.com offers very poor value for money.
I have no idea what the customer service at Caesar trade is like, but you can book a chat with the owner on the main page. Weirdly enough I can’t find any reports on other websites about the quality of customer service on other websites. Which is bizarre to say the least, though it does appear that Caesar Trade is a very small operation meaning that it hasn’t received the kind of coverage you would expect to find on the major Forex websites. The Caesar Trade website has both a contact email and telephone number which has a Dayton Ohio dialing code which seems to confirm my suspicion that site owner is based in the United States of America.
Caesar Trade is the trading name of Caesar Trade International Ltd. a company registered in the Seychelles. As far as I know the Seychelles doesn’t have any regulation regarding Contracts for difference, allowing Caesar Trade to operate completely unregulated. They state there primer brokerage is Leverate and it appears to me that Caesar Trade is using some kind of Leverate turn key solution. Whether they are covered by Leverate’s Cysec regulation is dependent on whether they are handle client monies themselves. If they do engage in any handling of client monies it would mean that they aren’t covered by their White Label Provider. From their website it appears to me that they do engage in some handling of clients money, which if true means that they are in fact unregulated. The situation regarding the regulation of Caesar Trade is confusing but I have the feeling that they are unregulated entity.
Overall, I would recommend that individuals avoid Caesar Trade as they appear to be both poor value and also appear to be operating without proper financial regulation which if true is very concerning.
Early this week it was announced that Banc De Binary gained Cysec regulation, having launched a new headquarters in Limassol, Cyprus. This Cypriot office will serve as Banc De Binary’s European and Middle Eastern headquarters and according to the company represents a multi-million pound investment in the country.
Banc De Binary was established in 2009 and was one of the first providers to adopt the SpotOption platform for the provision of Binary Options to it’s clients. It’s listed headquarters are New York but this new office and regulation in Cyprus allows Banc De Binary to operate throughout the European union on the basis of MiFID’s outward service directive. Banc De Binary follows in the footsteps of their platform provider SpotOption who became the first Binary Options provider to become regulated by Cysec. This was all after Cysec changed its opinion on Binary Options concluding that they were in fact a type of financial instrument and therefore covered under MiFID.
This decision made Cysec the first MiFID member to treat Binary options as a financial instrument and has garnered a degree of criticism among those who feel that Binary Options are closer to a form of gaming than they are to a type of Over-the-counter financial instrument. In fact a number of Binary Options websites most notably OneTwoTrade have sought gambling regulation instead of financial regulation.
The licence offers an additional layer of transparency, accountability and security to individuals who are clients of Banc De Binary, whose accounts will now be backed by the Investor Compensation fund in full accordance with MiFID regulation. If the company was to collapse etc. amounts up to 20,000 Euros would be refunded to clients.
Obviously those at Banc De Binary are very excited about these events and this is reflected in Banc De Binary’s CEO Oren Laurent’s positive attitude about the prospect of financial regulation. (see 3-5:00 in following video).
It is estimated that the regulation of Binary Options will bring an extra 1,200 jobs to Cyprus over the coming year, as well as contributing much needed tax revenue to the country during a tough economic period for the small Island country.
Many are unaware that there are two different types of Contract for difference brokerages. Firstly, there are those who simply take the role of agents executing all orders on the underlying exchange, this type of brokerage gives it’s customers direct market access. In contrast with Direct Market Access brokerages their are Market Makers who make a market and then live off the spread. With Market Makers taking a number of different measures to manage their risk. To learn how Market Makers manage their risk check this post out.
When trading with a brokerage that offers Direct Market Access, the bids and offers on display will match those in the underlying market. This means that the spreads on offer are much tighter than brokerages that operate on the Market Maker model. Though when trading with a CFD brokerage that offers direct market access you will have to pay fixed commissions on each position opened. This can really eat into smaller traders profits.
With a Market Maker, they will determine the spread on the given instrument to manage risk and to increase profits the Market Maker will often offer spreads considerably wider than those found in the underlying market. When hitting buy you may also experience slippage and re-quotes which is particularly annoying, however you are less likely to have to pay a commission on each position opened with the brokerage. Which can be beneficial to those who have limited funds to trade with.
Choosing whether to use a Market Maker or Direct Market Access brokerage really depends on your needs and what products you intend to trade. The shorter your trading time frame the more beneficial a Direct Market Access brokerage will be. However if you want access to a wider range of global markets a Market Maker may offer you a better range of instruments to trade. This is due to the fact that a Market Maker can theoretically create a market for any tradeable financial instrument, whereas a Direct Market Access brokerage would need access to the particular market. A lot of professional traders will use both for these very reasons.
Given the advantages of brokerage who offer Direct Market Access (DMA) why do people use Market Makers? Well Market Makers have a number of benefits for one they tend to offer a wider range of markets, including foreign and illiquid markets. They also tend to allow traders to access the markets with less capital and undertake smaller size trades. For example to trade CFD’s with DMA broker you may need to open account with at least $2500, but many Market Makers allow you to trade the markets with as little as $100 (theres even a few regulated brokerages that allow you to trade the markets with as little as $5).
Liquidity can also be an issue with Direct Market Access brokerages. For example suppose you want to buy 500 Shares of a particular company if there are only 10 Shares available to buy you won’t be able to execute your order. It is for this very reason that one can’t take advantage of guaranteed stop losses at a DMA brokerage, due to the fact that there is a chance that you won’t be able to close a position at that particular price.
Both Direct Market Access and Market Makers have their own advantages and deciding which to trade with will largely come down to what your particular needs are. In an ideal world it would beneficial to have access to both a DMA and Market Maker, but many will forced to pick one over the other and they should consider which brokerage model would suit them better.
- Regulation: Oanda Europe Ltd. is a registered company in the United Kingdom and is fully regulated by the FSA.
- Instruments: Forex, Commodities and Indices.
- Features: Good range of platforms with plenty of mobile trading support, as well as very tight spreads on the Forex pairings on offer.
- Leverage: Maximum Leverage of 50:1
- Minimum Deposit: No minimum account size
At the core of OANDA’s offering is their own propitiatory trading platform fxTrade, which I have remark is a very nice and easy to use platform. It has to be one of my preferred non MetaTrader offering being very versatile and should meet most traders needs. However, if your a fan of MetaTrader OANDA also offer MetaTrader 4 for their customers, which works just as one would expect. This a nice feature for those who are fans of the MetaTrader platform allowing you to operate Expert Advisors and do all the other things that the platform is well renowned for. OANDA Europe also has an impressive range of different mobile trading applications including support for Blackberry’s, Android devices and of course Ipad’s and Iphones. All of the mobile platforms work perfectly and are quite impressive allowing the trader to do much of what they would normally do on the PC or Laptop. All in all, OANDA has a decent range of platforms all of which should satisfy most traders.
While their is nothing particularly remarkable or unique about OANDA, their CFD offering is of exquisite quality offering very tight spreads, decent trading platforms as well as providing a high quality of service. OANDA also offers demo accounts to those who want to try out the platform before they deposit real money. There are a couple downsides to OANDA with traders be unable to trade stocks and the maximum leverage available at OANDA only being 50:1.
The Spreads at OANDA are particularly impressive being some of the tightest around with the majority of major currency pairings having spreads as small as a signal pip. The spreads for the more exotic currency pairings do of course widen, however the spreads for these currencies are still very competitive and you would probably do a lot worse than the spreads on offer at OANDA. I would say that the spreads on offer at OANDA are very competitive and are significantly tighter than at a number of well known industry players. The spreads on commodities also appear to be particularly tight as well providing the trader with value for money across the board. While overall the spreads at OANDA are very tight one should still search around for the best value, especially if you intend to trade a particular instrument.
OANDA Europe has a very good reputation when it comes to customer service, with a number of OANDA customers having praised them for the high quality of service. In my personal experience contacting OANDA has been unproblematic. Depositing and withdrawal have gone smoothly with their even being the option to withdraw funds to a verified Paypal account. This high quality of customer service has gone unnoticed with ForexMagnates picking out OANDA as the best broker of 2012. I personally have no reservations recommending OANDA and would be surprised if you could find many people who were completely dissatisfied with the service offered by OANDA.
OANDA Europe is based in London and is regulated by the FSA this allows OANDA Europe to accept clients from throughout the European Union. The FSA is considered to be one of the best European regulators and OANDA Europe has a clean regulatory record. OANDA also happens to be regulated in the USA and Japan, meaning that the brokerage is a serious international player. I wouldn’t have any worries about depositing cash with OANDA as I know it would be safe with OANDA being a properly regulated firm.
Overall, I would reccomned OANDA to anyone in Europe who wished to trade Forex and Commodities. It is unfortunate that OANDA doesn’t offer Stocks, but I see that as the only major drawback to the OANDA offering.