Our Pepperstone vs Hugosway review found both are ECN brokers with low spreads from 0.0 pips and commissions but Pepperstone is regulated while Hugosway is not. Along with better forex trading platforms, range of CFD trading markets and superior review, Pepperstone is our recommended forex broker.
One of the biggest differences between Pepperstone and Hugo’s Way is Pepperstone are regulated, and Hugo’s Way is not.
Pepperstone offers you the safety of the following respected Tier 1 regulatory authorities:
Hugo’s Way advises they are in the process of applying for a licence which can take a long time to be set up and implement. This lack of regulation should be a primary concern of yours.
Regulation matters because it concerns the safety of your funds, your investments, and the obligations of your broker to use your funds with integrity.
Regulation requirements include:
Hugo’s Way is not a regulated broker. They are an offshore broker, which means no regulatory authority is monitoring their conduct with your funds. This means they can disappear with your money as there are no regulators to act as a safety net and provide forex traders with some level of protection.
On their website, Hugo’s Way explains how they manage your funds.
Keeping your funds in their own name on your behalf and managing this with a segregated accounting system does not prevent the broker from being able to access your funds. This practice does raise concerns.
We started this review by highlighting the importance of regulation. You want to keep your funds and investment safe and secure, so choosing a regulated broker is one measure that can provide peace of mind. Pepperstone provides excellent security as they are regulated by ASIC, CySEC and FCA.
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Both Pepperstone and Hugo’s Way offer a commission-based account which uses ECN pricing. When using this type of account, you will incur three major trading costs. These are:
When it comes to commission – Pepperstone offer better commission without question.
Hugo’s Ways charges USD$5 per standard lot. This expensive when one compares with Pepperstone, one is essentially paying $1.5 more for each side of the trade.
This difference can add up over time. This high commission is surprising given Hugo’s Way is not regulated. I asked them why this is the case for information purposes and this is what they said:
Pepperstone charge in your account currency. So if you’re in Australia, you are better to trade with AUD than USD. IC Markets and Oanda have similar commission rates for the core pricing + commission pricing model.
Spreads are a bit more difficult to compare as Pepperstone provide their average spreads and Hugo’s Way do not. I contacted Hugo Ways, and they were kind enough to provide me with their lowest recorded spreads for each currency pair.
It interesting to observe that Pepperstones’ average spreads match or better Hugo’s Ways best spreads.
Both brokers use ECN style trading to provide you with the tightest spreads.
Pepperstone prefers not to call themselves an ECN broker. This is because ‘true ECN’ or STP brokers use someone else’s trading system, independent of their own trading system. Pepperstone, therefore, are not ‘true’ ECN as they are the issuer of their own products. Instead, Pepperstone provides you with ECN level pricing by souring quotes from external liquidity providers via ECN networks and passing these prices directly to you without any intervention from their side.
Hugo’s Way, unlike Pepperstone, actively calls themselves a ‘True ECN’ broker, but the information on their website is conflicting.
Hugo’s Way source your quotes from 50 different bank and dark pool liquidity providers, however, claim they provide ‘true ECN’ and at other times claim they practice STP execution. While one can argue ECN and STP are two sides of the same coin, Hugo’s Way incorrectly claims STP execution means processing via an aggregator. This is ECN, not STP execution.
Given Hugo’s way has wider spreads than Pepperstone, the question has to be asked about Hugo’s Way execution.
Pepperstone offers lower costs than Hugo’s Way. Commission costs are lower than Hugo’s Way and spread generally appear to be narrower too. All in all, forex traders can save on their trading costs if they open a trading account with Pepperstone.
Pepperstone offers 2 main account types. These are:
The main difference between each account is Standard account had no commission, instead the spread is widened by 1 pip ($10). Spreads on the Razor account are organic. This means they are aggregated from a dark pool of liquidity providers and banks without price interference from Pepperstone. To keep the spreads as low as possible, Pepperstone charges a commission:
Hugo’s only offers one account. This the ECN account.
Below is a comparison of each broker’s accounts
Disclaimer: You can’t open a trading account at Pepperstone or Hugo’s Way if you live in the United States.
You will notice that both brokers’ accounts offer similar features. Pepperstone offers lower commissions, more currency pairs, more choice of social tools and therefore better value for all traders.
Pepperstone has Hugo’s Way covered hands down when it comes to trading platforms. While Hugo’s Way only offers MetaTrader 4 for Windows, iOS, Android, Mac OS and Web Trader for mobiles, Pepperstone offer all these and more.
With Pepperstone you can choose from MetaTrader 4, MetaTrader 5, cTrader along with all their operating system and mobile versions.
Pepperstone not only offers a decent choice of trading platforms but also a wide range of social trading, copy trading, and advanced trading tools. Something absent from Hugo’s Way portfolio.
MetaTrader 4 is a great trading platform as its suitable for all investors and depending on your trading needs, can be all you need for successful trading. Traders will usually benefit from extra tools that Pepperstone offers that provide deeper technical analysis so you can make more informed trading decisions and social and copy trading tools so users can learn from other successful traders.
Hugo offers leverage of 500:1 when trading Forex for all its clients. Pepperstone can only offer the maximum permitted by the applicable regulator.
If you are in Australia, Europe, the UK or the United Arab Emirates leverage for major forex pairs is 30:1 and minor forex pairs is 20:1. If you are outside these regions then leverage of 500:1 for all forex pairs is available.
Both brokers offer the standard risk management tools found on MetaTrader 4. These include
Where the brokers differ is with their default margin call and stop-outs.
Pepperstone and Hugo’s Way will begin notifying you to exit your trade or top up your account when your account balance falls below different levels. Each broker’s margin call begins at the following:
Pepperstone and Hugo’s Way will automatically exit you from your positions when your account falls below different levels.
Pepperstone have MetaTrader Smart tools. This is an add-on with additional trading features not found in the native MetaTrader platform. Hugosway does not offer this.
Here one can find useful risk management tools including:
Hugosway has slightly more conservative margin call and stop-outs defaults than Pepperstone. The defaults differences are only 10% so not significant. Pepperstone, however, offers advanced smart trading tools which have tools that will make your trading experience better. Some of these tools can be used for risk management.
The complete absence of education and research tools available with Hugosway is notable. Hugosway does not offer any training videos, learning centre, ebooks, PDFs, podcasts and webinars. While you can find many of these tools free with other brokers or on the internet, it is a little disappointing that Hugosway does not offer any education and research, especially when one compares with Pepperstone.
Pepperstone offers training and education tools for traders of all levels, covering all aspects of the trading process. Features include:
With Pepperstone research, you will receive the following:
Pepperstone has a wealth of education and research tools which makes them competitive with those on offer with some of the best brokers on the market. These tools can be very helpful as a part of your trading and foreign exchange trading journey to success.
Both brokers offer a different range of derivatives for trade. The table below sums up the differences:
Both brokers offer a relatively similar range of derivatives for trade. Pepperstone offers soft commodities and a few extra currency pairs, while Hugosway offers a greater range of cryptocurrencies.
Hugosway offers 16 Cryptocurrency types and 31 crosses. This is a lot more than Pepperstone who offer 5 types of Cryptocurrencies.
While an experienced trader could appreciate the wider choice of cryptocurrencies that Hugosway offer, it is important to understand that most of these Cryptocurrencies are not well established, which means they can be highly volatile. If you do choose to trade with leverage of 100:1, then you need to make sure you understand the risks.
On the plus side, Hugosway does limit the size of lots you can order with, which can make trading expensive given you will pay USD$5 per lot.
Pepperstone only offers the major cryptocurrencies. These established cryptocurrencies are likely to be more stable and therefore lower risk than other cryptos. To meet regulatory requirements, Pepperstone restricts leverage to 2:1 in Australia, the UK, Europe and the UAE and 5:1 outside these regions.
Pepperstone does not charge commissions for trading cryptocurrencies, so you will pay through wider spreads.
Which broker you choose when it comes to CFDs will come down to personal preferences. Both offer a similar variety of CFDs however Hugosway places a greater emphasis on cryptocurrency trading which some brokers may appreciate. If you do choose Hugosway for cryptocurrency, do note that lot size is restricted and you will pay commission for each trade you do.
Below is a summary of all the funding options each broker provides
Funding with Pepperstone is straightforward. You choose your preferred funding method to deposit funds into your account. Withdrawals must be to an account in your name. Funding in nearly all cases is free.
Bitcoin is the primary method for payments with Hugosway. Funding with Bitcoin means you can trade anonymously however you will need to learn how to buy bitcoin from partner sites. Hugos provide instructions on how to do this.
To use other trading option, you will need to verify your details with Hugosway. These options will incur charges, making them expensive options.
Pepperstone gives you a range of conventional funding options with no fees, which makes funding painless and straightforward. The only reason you might wish to consider Hugosway when it comes to funding is cause you prefer to use Bitcoin or you wish to trade anonymously.
Investment Trends and UK Forex Awards have awarded Pepperstone for their customer service several times over the years. Available 24/5, Pepperstone offers live chat, email, telephone for those wanting human customer service. Pepperstone also offers an expansive FAQ section and glossary, which should provide you with answers to many of your questions.
Hugosway is available 24/7 through live chat and online email form and calls back. There is no phone number, perhaps because the support team is located in Seychelles.
If you use the live chat, you will be greeted with Hugo’s Bot, which will try to find the answer for you before escalating you to help desk. The live chat team is friendly and helpful. Conversations will usually start with “top of the morning” and “Hope you are having a great day” which is a nice touch. The customer service team is helpful and very willing to provide extra information, to make sure you understand all the trading concepts that may be of interest.
Hugosway also has a FAQ section on their website with over 60 questions to common trading and account questions.
Both brokers offer good customer service. A useful FAQ section is provided from both brokers, which should answer most of your question. If not, the live chat for each broker is friendly and helpful. When it comes to customer service, Pepperstone main point of difference Pepperstone has the edge because they are award-winning and have a more professional setup. This is reflected by the fact they provide phone contact. All respectable brokers provide phone contact for customer support. Hugo’s Way not providing is unusual.
Pepperstone is the winner based on the forex brokers:
I have long been familiar with Pepperstone. Pepperstone was founded in Melbourne, Australia in 2010 by a team of experienced traders seeking a solution to their frustrating experience of slow trade execution, overpriced trading and unsatisfactory customer support. With a sound commitment to solving these issues through best in class technology, tight spreads and commitment to helping their clients be successful trader Pepperstone have risen to become one of the known and respected brokers not just in Australia but the world.
Pepperstone has 73,00 clients worldwide who combine to trade average US$12.55bn of trades every single day.
Until recently, I had not heard of Hugo’s Way. I discovered Hugo’s Way thanks to their extensive social media presence through Facebook, forex forums, and even Twitter. While I know the title sounds like the name of a movie or novel, Hugo’s really is a CFD broker. The broker is based in Seychelles and commenced operating mid-2016. I spoke to their customer service wanting to know more about them and they claim they have grown ‘exponentially’ over the last 2 years. Other than these details and what they offer as a broker (which I will cover in my review), not that much is known about them.
Justin Grossbard has been investing for the past 20 years and writing for the past 10. He co-founded Compare Forex Brokers in 2014 after working with the foreign exchange trading industry for several years. He also founded a number of FinTech and digital startups including Innovate Online and SMS Comparison. Justin holds a Masters Degree and an Honours in Commerce from Monash University. He and his wife Paula live in Melbourne, Australia with his son and Siberian cat. In his spare time, he watches Australian Rules Football and invests on global markets.