Pepperstone Review 2020

Strength 1 – Average Spreads + Commissions

Pepperstone offers three account types:

1. Standard account – No commission forex account (designed for beginner traders)
2. Islamic account – Swap-free account avoiding interest (designed for Islamic traders)
3. Razor account – Raw spreads account plus commission (designed for advanced traders)

Our 2020 analysis the leading ECN broker found the Pepperstone razor account has the lowest spreads. The razor account achieves this through straight-through processing (STP) of orders with no dealing desk. The account also has direct access to 60+ Exchanges, 400+ buy/sell firms and 150+ financial service providers to achieve tight spreads for traders.

Pepperstone Spread Comparison	AUD/USDEUR/JPYUSD/JPYUSD/CADEUR/USD	AUD/USDEUR/JPYUSD/JPYUSD/CADEUR/USD	AUD/USDEUR/JPYUSD/JPYUSD/CADEUR/USD	AUD/USDEUR/JPYUSD/JPYUSD/CADEUR/USD	AUD/USDEUR/JPYUSD/JPYUSD/CADEUR/USD
	0.18	0.27	0.13	0.24	0.13
	0.20	0.30	0.20	0.50	0.10
	0.30	0.44	0.36	0.58	0.10
	0.20	0.50	0.20	0.30	0.20
	0.42	0.30	0.20	0.83	0.44
	0.29	0.68	0.24	N/A	0.16
	0.40	0.70	0.30	0.70	0.20
	0.50	0.80	0.40	1.10	0.40
	0.70	0.80	0.50	0.80	0.40
	0.99	0.77	0.45	1.21	0.44

As the below table above shows, the average spreads reported in February 2020 was for the EUR/USD 0.13 pips, AUD/USD o.18 pips and USD/JPY of 0.13 pips.

Compare All Spreads >>

Price Improvement Technology

Another reason Pepperstone offers the lowest average spreads is through Price Improvement Technology. This works in volatile markets when large price movements occur with price improvement technology working in three steps. Firstly, the trader makes a forex or CFD trade through the forex platform. Secondly, the trade is executed and a more favourable price movement with is detected. Finally, the price improvement technology aims to fill the price at an improved level.

Razor ECN Broker Commissions

As Pepperstone acts as an ECN broker for Razor account traders a commission is charged based on volume. This commission is based on the forex trading platform chosen (discussed in the next section) and the base currency chosen.  The table below shows the commission charged for those who select MetaTrader 4.

As a benchmark, the commission rate of $3.50 AUD per lot is extremely competitive for Australian Dollar base currency accounts and £2.29 GBP per lot for British Pound base currency accounts. These rates can be further reduced due to the active trader program. This program offers rebates per fx lot starting at 10% when over 100 lots are traded over a three month period.

Conclusion On Trading Costs

ECN brokers have the lowest trading costs with no markup on spreads and straight-through processing. By combing the 2020 average spreads and commissions of the leading ECN accounts Pepperstone came out the best in this category.

There are no deposit or withdrawal fees from the primary funding methods with the Razor account. There are also standard fees for overnight rollovers and ongoing premium subscriptions.

The Pepperstone razor account won the low fee category based on the lowest average spreads and commissions.

Traders can open a free Razor demo account or start trading after individual details are provided.

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Strength 2 – Forex Trading Platforms

Pepperstone offers three trading platforms:

1. MetaTrader 4 – The most popular forex trading platform
2. Metatrader 5 – The most popular CFD trading platform
3. cTrader – Advanced platform with automation  + charting

1) MetaTrader 4

Pepperstone was awarded the best MT4 broker based on:

• The lowest spreads on major currency pairs including the AUD/USD, EUR/JPY and USD/CAD
• Competitive razor account commissions with further rebates through the active trader program
• The fastest execution speeds (explained below)
• 15 charting indicated and 16 smart trader tools to improve MT4 functionality

Compare MT4 Brokers>>

Once an order is received within Pepperstone’s bridge most orders were executed within 30ms through the ASIC regulated Australian subsidiary called Pepperstone Group Limited. The FCA regulated United Kingdom subsidiary Pepperston Limited reported 60ms speeds. In independent tests done through MT4 demo accounts verified these fast speeds with the market order execution speeds of 85ms.

2) MetaTrader 5

One of the main features of MetaTrader 5 (MT5) is the ability to trade share CFDs in addition to the instruments MT4 offers from currencies, commodities to cryptocurrencies. Below shows the main share CFDs offered and the margin through Pepperstone Group (ASIC regulated with AFSL 414530).

Commissions for MT5 are the same as MT4 except for those that choose USD as their base currency with a lower rate of USD $3.50 per lot. If you’re unsure which MetaTrader platform best suits you then view our exclusive MT4 vs MT5 guide.

MetaTrader Smart Trader Tools

Traders that choose MT4 or MT5 have the benefit of smart trader tools which is a package of 16 trading tools and 15 custom indicators.  The 10 most popular features include:

• Correlation Matrix that shows relationships between instruments
• Autochartist that highlights statistically significant market movements
• Alarm Manager alerts traders of key price changes or market events
• Sentiment Trader that shows the sentiment of past and live market data
• Connect Feature that delivers news, analysis and an economic calendar
• Excel RTD that pushes market data in real-time to excel
• Trade Simulator that for MT4 only allows testing of strategies
• Stealth Orders that allows pending orders to be hidden from the market
• Session Map that highlights which currency markets are open
• Mini Terminal allows you to hide MetaTrader but still see a market

Social trading additions such as the ZuluTrade platform can also be added to MetaTrader.

3) cTrader Platform

cTrader is a favourite of expert CFD traders with

• Direct access to inter-bank market depth to implement algorithmic-based fx trading systems.
• An interface that can be personalised with pre-set & detachable charts.
• Extensive back-testing facilities

The cTrader platform provides enhanced modification options within the interface combined with advanced order placing options. There is also webtrader which doesn’t need to be downloaded. Webtrader is normally used as a back-up to the above forex trading platforms primarily for those who are using a computer that they don’t own. For more details view the cTrader Guide.

Pepperstone Trading Platform Conclusion

Traders benefit through the availaility of the most popular forex platforms.

Pepperstone gives the choice of MT4, MT and cTrader, fast execution speed and enhanced trading tools.

Having the best trading environment and tools gives traders the best chance of executing their trading strategies successfully.

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Strength 3-  Customer Support Levels

Pepperstone has award-winning customer support which is a key reason why in Australia they increased their market share by 3% in the retail CFD trading market. This has been in-part credited to their customer support. In fact, Pepperstone support levels were so high they won the Investment Trends overall client satisfaction award.

Key elements that have led to Pepperstone’s customer support winning these awards include there:

1) Personalised Customer Service

Pepperstone offers a customer service team that hold years of experience within the forex trading sector. As real traders, they can help educate and answer any forex trading enquiries beginner, intermediate or expert traders may have. In many cases, a dedicated account manager may also be assigned to a trader to gain a stronger understanding of the trader’s needs.

2) 24-Hour Support

Pepperstone support is always available when the forex markets are open thanks to their five offices which are located in Melbourne, Shanghai, Dallas, Bangkok and London. This also provides local options for those forex traders located outside of Australia.

3) Customer Support Channels

A key strength found in the review of Pepperstone was the ability to use live chat to get high-level support. Live chat is available 24 hours a day as is their phone customer support (with different national numbers for each office location). E-mail support is also available. There is also training held on-site and online with a wealth of trading guide to suit expert to beginner traders.

Pepperstone Broker Reviews Match Their Awards

Forex brokers review sites generally have provided positive Pepperstone reviews since their launch in 2010. The score was 9.0 from 548 reviews as of August 2019 highlighting the broker offers is strong when it comes to customer satisfaction.

The key forex broker reviews issues raised were in relation to ‘exotic pairings’ (pairing outside of the major currencies). There also were complaints around withdrawing money from accounts. Positive Pepperstone broker reviews related to how fast their VPS is (<5ms), fast deposits, easy to get an account offering a stable platform. Investment trends which also does an annual survey late each year also found the Australian forex broker was the best across several areas. These include customer service, value for money, platform reliability and execution speeds.

Pepperstone Customer Service Conclusion

Broker reputation has been the key to growth over the past decade.

Pepperstone has award-winning customer service backed by strong customer reviews.

With offices in London, Melbourne and other key locations around the world, they offer premium customer support 24 hours, five days a week.

Strength 4 – Account Type Details

Across all Pepperstone Account types, there are the same fees that are applicable for elements such as inactivity fees, deposit and withdrawal details. The same is the situation with funding methods explains below.

Minimum Deposit Requirements

The minimum deposit for Pepperstone is AU $200 but clients can deposit lower amounts. This is applicable for Pepperstone limited that is ASIC regulated with AFSL number 414530. Traders opening an account with Pepperstone UK have a minimum deposit requirement GBP£200 through Pepperstone Group Limited with Registration Number 684312.

Based Currencies Available

Pepperstone offers 10 based currencies including the USD, GBP, AUD, EUR, JPY,  NZD, CAD, SGD, CHF and HKD. The base chosen needs to factor in individuals regular currency and the commissions charged based on that currency.

Account Funding And Withdrawal Details

Pepperstone has no funding or withdrawal fees, unlike some brokers.  Only some intentional institutions may charge their own fees.

Payment methods can vary by region and overall include:

• Visa – Instant funding through Verified By Visa is available with zero fees.
• MasterCard – MasterCard SecureCode allows fast funds with no fees.
• Paypal – No charges are applied from Paypal funding of an account
• Fastapay – Instant deposit method with no fees.
• China Union Pay – There are no fees or charges from Union Pay which offers funding at any time.
• Skrill (Moneybookers), Qiwi & Neteller – Fast deposit method that is available 24 hours, 7 days a week with no charges.
• POLi & BPay – Bank transfers can be made at any time from eligible bank accounts through POLi & BPay.
• Wire Transfer (Domestic & International) – Wire transfers are available but they can take time and fees may be charged.

Pepperstone Funding Conclusion

The main brokerage charged is collected by most brokers through spreads and commissions.

Pepperstone avoids hidden trading costs such as funding fees.

With easy funding methods and low overall broker fees Pepperstone is the best value broker overall.

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Weakness 1 – No Stockbroking Services

The largest retail foreign exchange brokers sell themselves as an ‘all-in-one trading solution’. This includes IG and CMC Markets who offer a range of markets including stockbroking. Pepperstone is only a specialist trading provider offering:

1) FX Trading

There are 59 currency pair available including the most popular currency including the United States Dollar. Other currencies include the Euro, Japanese Yen, Great Britain Pound (GBP) and the Australian Dollar. Over $1.5 trillion a day worldwide* is traded. The leverage on fx trading is 500:1 with low spreads and

2) CFD Trading

CFD trading (Contract for Difference) also known as derivative trading allows traders to speculate on the movements of financial markets. Pepperstone offers several asset classes when CFD trading including 14 indices from the Australian 200 Index, EU Stocks 50 Index and US Tech 100 Index. CFDs are complex instruments recommended for advanced traders.

3) Commodity, Energy & Precious Metal Trading

Pepperstone offer 500:1 leverage on precious metals such as Gold, Silver, Platinum and Palladium. The same leverage levels are offered across both oil and gas markets. Soft commodity markets have a 50:1 leverage and include coffee, sugar, cocoa cotton and even orange juice.

4) Cryptocurrency Trading

There are four cryptocurrency options available for trading with 5:1 leverage through Pepperstone Australia.

Bitcoin + Bitcoin Cash

Pepperstone offers Bitcoin trading which remains the most popular cryptocurrency in 2020. In 2020 over a USD $186 billion market capitalisation exists. It’s no surprise that bitcoin trading remains the preferred option from traders.

Learn more about Bitcoin on this Australia site.

Ethereum

Another popular cryptocurrency option is Ethereum which is considered one of the most exciting bitcoin technologies. Smart contracts allow Ethereum to have multiple applications which allows it to service a plethora of industries.

View the official Ethereum Project site.

Dash

Dash also know as ‘Digital Cash’ focuses on a faster cryptocurrency option allowing for anonymity. Digital cash is used as an efficiency payment system across the globe and has experienced high volatility and liquidity compared to Bitcoin.

Learn more about Digital Cash at the Dash website.

Litecoin

Litecoin is a relatively late arrival and focused on using a simple algorithm to accelerate transaction times. The simpler algorithm since 2011 is what has led to Litecoin’s popularity and make it a real alternative to the mainstream cryptocurrency options.

View more about this on the P2P site.

Pepperstone Has Limited Risk Management Features

There are risks involved when trading CFDs as they are a complex instrument and leverage makes it so there is a high risk of losing money rapidly. Understanding these risks is critical and learning the tools that can help manage these risks. Pepperstone has some such tools but not of them. Below details the CFD risk management features available.

Currency Trading Orders Types

Pepperstone offers three order types of currency trading orders. This includes a limit order and a stop-loss order exits a trader after a price is reached. This can be set by price or the maximum a trader is looking to gain/lose in a trade. The final currency trading order is a trailing stop which moves with the market as the price fluctuates. The trailing stop activates only when a designated level is reached.

Pepperstone doesn’t offer guaranteed stop-loss orders. This is similar are the same as a ‘stop-loss’ order but the maximum loss is guaranteed at the designated level. A stop-loss order, on the other hand, can lead to losses exceeding the designated level is high volatile markets leading to slippage. While guaranteed stop-loss orders have increased fees, they can be an effective risk management tool for those with a low-risk appetite or new to currency trading.

Pepperstone also doesn’t offer negative balance protection. While they have tools that are designed to prevent a negative balance exiting a CFD trader before their losses exceed their deposit, this is not guaranteed. When risk is a concern it may be worth considering a CFD broker offering negative balance protection like EasyMarkets.

Regulation Of Pepperstone

Pepperstone Group Limited is authorised and regulated by the Australian Securities and Investment Commission to trade in Forex and CFDs in Australia (pepperstone.com/au). Pepperstone Limited is regulated in the UK through the FCA Financial Conduct Authority. These top-tier regulators have set requirements for brokers including segregation of accounts.

Final Thoughts On Pepperstone

This review of Pepperstone recommended the Razor account based on:

• • The lowest spreads across key major currency pairs
  • Competitive commissions and other trading costs
  • Fast execution speeds and enhanced trading tools
  • Strong customer service and client Pepperstone reviews

The factors above led Pepperstone to be the leading retail forex broker in Australia with a growing presence in the UK and surrounding markets.

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