2021 FX Providers

Pepperstone – Fx Broker For Experienced Traders

Pepperstone has tailored its offering those with expert trading experience due to their:

1. Active traders low commission for high-volume traders
2. Low minimum deposit requirements
3. Strong reputation amongst forex traders
4. Range of forex pairs including exotic and minor currencies
5. Fundamental and technical analysis updated daily
6. Regulated by ASIC (Australian Securities and Investments Commission)

Key elements are discussed below or you can view a comprehensive Pepperstone review here.

Pepperstone Has The Lowest Spreads (Especially For High Volume Traders)

Below compares the spreads for Pepperstone’s ECN-like account – The Razor Account. ECN-style accounts are the choice for advanced and high-volume traders looking to lower trading fees and gain access to Direct Market Access spreads.

Pepperstone charges competitive, low commissions, especially when you consider commissions are charged in AUD.

These commissions are even lower once you trade over 100+ lots and become an active trader for a month. These rebates on commissions start at 10% and for higher volume traders, meaning Pepperstone is the best forex broker when it comes to low fees.

Pepperstone Has The Lowest Minimum Deposit

Technically, Pepperstone has set a minimum deposit of $200 US Dollars (or the equivalent in the base currency chosen such as the Australian Dollar). Pepperstone supports 10 different account base currencies including British Pound (GBP), Euro (EUR), Japanese Yen (JPY) and some minor currencies. While is higher than some of the largest brokers, Pepperstone is open that this is not actively enforced allowing for smaller deposits to be made.

What sets Pepperstone apart is they don’t charge funding or withdrawal fees. Only some payment methods such as international transfers may see the financial institution themselves charge fee for money transfers. The funding methods include:

• Bank transfer + BPay
• Visa + Mastercard
• PayPal
• Union Pay
• POLi
• Neteller + Skrill

Pepperstone Has The Best Customer Support And Broker Reviews

While most brokers would argue they have the most satisfied customers and best support, Pepperstone has the reviews and awards to back-up their claim. A benchmark annual study by Investment Trends surveys active forex traders, recognising Pepperstone’s excellent customer service with various awards.

Another gauge of the forex broker reviews is from Trustpilot, which in 2020 gave the score for Pepperstone:

• 519 reviews
• 9/10 score

This is the highest of the forex broker reviews that have over 500 reviews.

The Sweet Spot For Pepperstone

Pepperstone is the best forex broker for expert traders looking for a low fee fx provider with strong customer service. They offer all major forex trading platforms including MetaTrader 4, MetaTrader 5 and cTrader. As well as an excellent selection of trading platforms, Pepperstone is regulated by top-tier authorities such as the Australian Securities and Investments Commission and the Financial Conduct Authority (Registration Number 684312) in the UK.

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Should You Trade Forex?

FX trading occurs throughout the day, with no limitations on short currencies. If you believe a currency will fall, sell it and if you feel it will increase in value, buy it (buy low, sell high). Trading forex comes with high levels of risk, with the potential to lose or gain money at any time. The fact that most traders concentrate on a few currencies means there is plenty of people trading. This makes it easy for you to get in and out of trades at any time you prefer. The liquidity available is deep and allows you to trade at high leverage to take advantage of market movements. However, you need to remember that it might increase your profits as well as your losses.

Low trading costs are another reason why there are plenty of Australian forex traders and brokers. Usually, there are no hidden mark-ups or charges associated with liquidity providers, with most trading accounts offering tight, ECN-like spreads with competitive commissions. Forex trading creates international exposure, with investors always looking for new opportunities to make net profits. Forex is the easiest way to invest in other markets without the need for financial statements and securities laws.

An Overview of the Forex Industry

Forex describes the act of trading currencies often undertaken by speculators and investors in the foreign exchange market. For example, if the U.S dollar weakens in value relative to the Australian dollar, a trader will sell U.S dollars and buy Australian dollars. In case the AUD strengthens, the USD’s purchasing power increases. In such a case, the trader can buy more USD, thus making a profit, with the process similar to stock trading. Traders purchase stocks that they think will increase in value and sell stocks whose value is likely to depreciate in the future.

How to read a quote?

Since traders compare one currency to another, they are quoted in pairs on the forex market. Reading a quote is a straightforward method. For example, you compare the value of one Australian dollar to the U.S dollar. The first listed currency is known as the base currency, and the currency is quoted in this currency.

What is a lot?

A ‘lot’ represents the number of units that are bought and sold when trading currency. FX accounts in Australia use ‘standard’ lots, made up of 100,000 units of currency. Other types of lots available include mini-lots which are 10,000 units and micro-lots which are 1000 units. You can trade as many lots as you wish, as long as they are in increments of the chosen lot. Ie: if you trade 5 standard lots, that will be 500,000 units.

One thing to look out for when trading lots is the cost charged by the broker per lot. Costs of trading with smaller lots may be more expensive, especially since a trader may need to buy or sell more lots to achieve the same volume as a single standard lot.

What is margin/leverage?

Online forex brokers and CFD brokers allow you to execute trades using borrowed money, allowing traders to take advantage of a margin. Leverage of 100:1 enables you to trade with $10,000 in the market by using $1000 dollars as a security deposit. This $1000 is known as the margin. You can take advantage of margins to control more money in the market than you have in your account. However, leverage comes with high risk and can also substantially increase your losses. FX trading is not a suitable venture for all investors who are not willing to take risks. A margin requirement is a specific amount a trader is required to keep aside to hold a position. It can be a good faith deposit expected to keep open positions. It is a part of your account equity allocated as a deposit and not a transaction fee.

Leverage and margins are fundamentally the same, except they are expressed differently. Leveraged products will usually be expressed as a ratio. Thus, leverage of 100:1 as mentioned earlier means you can trade $10,000 using $1,000 worth of funds as security. Margin or margin rate, on the other hand, is expressed as a percentage. Thus a 1% margin rate of $10,000 equates to a $1,000 margin requirement. Forex brokers such as OANDA have a low margin rate compared to brokers such as IC Markets or Pepperstone.

What is a pip?

It is the unit used to count losses or profits. Most currency pairs are quoted to four decimal places. The fourth value after the decimal point is what you use to count a pip. Anytime a point in the quote moves, it is counted as a pip of movement. For example, if the AUD/USD increases from 1.4011 to 1.4018, the AUD/USD currency pair has grown by seven pips.

What is Spread?

Spread is similar to pip. The spread is the difference between the buy and sell prices (bid/ask price). For example, if the buy price is 0.83860 and the sell price of the foreign currency is 0.83855, then the spread equates to 0.83860 –  0.83855 = 0.00005 and can be expressed as 0.05 pips when rounded. The value of the bid-ask spread increase and decreases in tandem with the market volatility.

What is Social Trading Platform?

A social trading platform works like a social trading network were traders with different skill levels can interact with one another, learn from more experienced traders and copy their trades. Founded in 2007, eToro is the world’s biggest social trading network, home to over 13 million traders from over 140 countries. eToro offers a web-based trading platform also accessible via mobile apps, interactive charting solution, access to 0% commission trading in over 2,000 CFDs, video tutorials and so much more.

Licensed and Regulated Forex Brokers

It is important when choosing a forex broker to consider signing up with a service provider that is licenced in your domestic market. In Australia, this means the broker must be granted an adequate Australian Financial Services License (AFSL) by the Australian Securities and Investments Commission (ASIC) to legally trade in Australia. Additionally, they monitor all foreign exchange contracts and derivatives to make sure they are legal and markets are competitive. To see if a broker is ASIC regulated, you will find the broker’s ASFL licence number published on their website.

There are also regulatory bodies in the UK (known as the FCA), Singapore (MAS), Japan (FSA) and Cyprus (CySEC). The USA is the world’s biggest financial hub, thus its regulatory bodies Commodity Futures Trading Commission (CFTC) and the NFA provides the safest environment for trading the financial markets.

Risk Disclaimer: The best brokers are always regulated, and any forex scams are almost always associated with unregulated forex brokers. When you start trading, check with the regulator’s site to make sure the broker holds a current licence.