Background To City Index
City Index’s parent company is GAIN Capital Holdings Inc, a large retail and trading provider around the world. GAIN Capital was founded in 1999, with the mission to provide traders with low cost access to foreign exchange markets. City Index has been serving Australians since 2006, and has an office based in the heart of Sydney. City Index’s Forex trading Australian Financial Services License: 345646
In our comprehensive City Index review, top three key strengths found in the platform were:
Top three key weaknesses found in the platform were:
City Index Range of Markets
There is a range of CFD trading options available with City Index.
1) Forex Trading
City Index offers 84 currency pairs for trade through the CFD trading platform MetaTrader 4. As below highlighted minimum spreads start from 0.5 points and margin (leverage) is 500:1. The Forex broker offers two currency trading accounts. The first which is the most popular option is to trade currency as a contract for difference (CFD). Choosing this option allows other asset classes to be chosen that are explained below. The second option is to use MT4 to trade spot Forex which means you can only trade currency. Below shows the CFD account average spreads.
2) CFD Share Trading
City Index allows the trading of over 4,500 global shares as a CFD. This allows trading with leverage from 20:1 on leading shares from Amazon to Rio Tinto. Commissions start from $5 on Australian shares or 0.08% for larger trades. Traders can speculate on long or short positions using the CFD trading account.
3) Indices Trading
With leverage from 200:1, City Index allows trading on 21 of the leading global indices. This included the Australia 200, UK 100, Singapore and Wall Street index. Fixed spreads start from 1 point with 24 hour support on offer.
4) Cryptocurrency Trading
Crypto trading is highly volatile and is unique against traditional technical analysis CFDs. Trading CFDs with crypto are high risk and spreads differ by the type of cryptocurrency as shown below. Complex instruments are involved so it’s recommended to understand the risks for any retail investor accounts.
5) Interest Rate Trading
Short selling opportunities exist with leverage of up to 400:1 when predicting interest rate changes. This exists across the Eurodollar, Short Sterling and Euribor. Spreads start from 0.02 points across 15 global markets.
Overall, parent company GAIN Capital Holdings market power allows for City Index’s work to span across a range of products from currency, indices to crypto trading. The main account type that allows for the full range of financial markets is the CFD account, whilst the MT4 account allows only for currency trading. Advanced traders are recommended to choose the CFDs account while those with MT4 trading experience may prefer the currency trading only account. With law variable spreads and advanced trading tools, City Index has one of the best ranges of markets of any CFD broker.
City Index Minimum Deposit
There is no minimum deposit for City Index CFD accounts. There are four main ways to find an account in Australia:
- Credit Cards (Visa and MasterCard)
- Debit Cards
- Electronic Funds (EFT)
Up to three debit or credit cards can be used for an account across Visa and MasterCard. When transferring funds from an Australian bank, no deposit fees are charged, and further no charges for funding through a bank transfer when the account is based in Australia. However, an overseas bank account will require an international bank transfer which may take longer with an extended transfer period.
City Index Regulation and Support
Another point that’s important in this comprehensive City Index review is the fact that it is fully regulated under the authority of the Australian Securities Investment Commission. Thanks to regulation by this body, traders choosing City Index can be sure that they are doing business with a reputable brokerage that must conform to all Australian investment laws.
Support and Service
Traders using City Index have multiple ways to reach out to the company’s support staff when they need to, including:
- Live chat assistance
- Email support
- Direct phone support based in Australia
In addition to these methods of contracting support, traders can also try to find the answers to their questions in the FAQ section of the brokerage’s website. This set of common questions will provide answers and solutions for most issues. When more rigorous support is needed, however, City Index’s staff is there to help.
City Index Trading Platforms
There are two trading platforms that will be determined by the trading account chosen.
AT Pro Trading Platform
The more sophisticated CFDs account requires the use of AT Pro desktop platform or their web based options.AT Pro has built in strategies and even allows traders to create their own strategies using .NET, Visual Basic or C# coding language.
There are also advanced charting options with over 100 technical indicators.AT Pro also allows for automated trading signals to show exit and entry points through charts. Back-testing facilities also help view the performance of past trading signals.
AT Pro has in-depth market analysis including an economic calendar as well as custom indicators for advanced trading. Advantage web trader is the lighter AT Pro option for mobile trading. This doesn’t require any downloads using reliable and fast HTML 5 technology. Mobile trading is also available through iOS and Android trading apps.
The basic trading software on City Index is MetaTrader 4, which is the dominant standard trading software in the Forex market. On City Index, the standard MT4 platform is upgraded with variable Forex pricing and access to all of City Index’s market analytics. These upgrades, on top of an already well-proven system, give this version of the MT4 platform versatile function while keeping it relatively user-friendly. The MT4 web platform and mobile apps are also ideally suited for mobile trading with stop-loss orders, watchlists functionality and Reuters news integration.
City Index Leverage Structure
A key component of a City Index review for beginner and experienced traders trying to decide whether this platform is right for them is the leverage structure. As stated in the overview, City Index only offers leverage ratios of up to 200:1. Since many Forex brokers now offer leverages of 400:1, 500:1 or in some cases, even more, this puts City Index behind the curve in the leverage department.
Effectively, 200:1 leverage will limit the volume of currency a trader can work with on any given position relative to his or her personal investment. A trader opens a position with $100 leveraged at 200:1 will be able to trade with $20,000. A more standard leverage ratio of 400:1, by comparison, would let the trader work with double that amount of money. This lower leverage results in:
- Lower potential gains from successful trades
- Lower risks in unsuccessful trades
- ability to open fewer large volume positions simultaneously
Though City Index has some noticeable weaknesses in the area of leverage, it also has some strengths. The fact that the leverage ratio on any given trade can be set anywhere between 20:1 and the maximum of 200:1 can be very helpful for more conservative traders trying to reduce their exposure to risk. For traders who need higher leverage for opening large numbers of positions or as part of their overall trading strategy, however, the 200:1 ratio can be a handicap.
Risk Management For Leverage
Due to the increased risk leverage brings to CFDs trading our City Index review noted that they offered guaranteed stop-loss orders. While placing such an order has increased costs, it means you can’t lose more than the amount set for trade. This means a compensation scheme exists that will refund any losses exceeding the amount set. A traditional stop loss is not a fool-proof risk management strategy as in extreme volatility slippage may occur. This means losses may exceed an amount set as the forex broker couldn’t achieve the price set. Another risk management feature offered it trailing stop-loss orders.
City Index Inactivity Fee
Clients should be aware that there is a fee incurred for inactivity for longer than 12 months.
City Index Review: Final Impressions
Overall City Index is a strong brokerage that beginning and intermediate Forex trading Australia enthusiasts should consider when looking for a new place to trade online. Although limits exists in regards to its trading platforms and leverage restrictions – these may be issues for some traders, not enough to offset the advantages this brokerage offers.