Pepperstone Strengths And Weaknesses
A review of Pepperstone was completed in February 2020 based on a comparison of the leading forex brokers with data obtained through platform testing, published data and industry awards.
- The lowest 2020 average spreads + commissions
- The choice of the MT4, MT5 or cTrader trading platform
- The fastest forex trading execution speeds (2020 tested)
- The best customer support based on awards
- Low minimum deposit and easy funding methods
- No stockbroking or other financial services
- Limited risk management tools
Strength 1 – Average Spreads + Commissions
Pepperstone offers three account types:
- Standard account – No commission forex account (designed for beginner traders)
- Islamic account – Swap-free account avoiding interest (designed for Islamic traders)
- 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.
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.
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.
|Commissions Per Lot||British Pound||US Dollar||Australian Dollar||Euro||Swiss Franc||Canadian Dollar||Singapore Dollar||New Zealand Dollar||Hong Kong Dollar||Japanese Yen|
|MetaTrader 4||GBP 2.29||USD 3.76||AUD 3.50||EUR 2.61||CHF 3.30||CAD 3.50||SGD 4.55||NZD 4.75||HKD 28.17||303|
|MetaTrader 5||GBP 2.29||USD 3.50||AUD 3.50||EUR 2.61||CHF 3.30||CAD 3.50||SGD 4.55||NZD 4.75||HKD 28.17||303|
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.
Strength 2 – Forex Trading Platforms
Pepperstone offers three trading platforms:
- MetaTrader 4 – The most popular forex trading platform
- Metatrader 5 – The most popular CFD trading platform
- cTrader – Advanced platform with automation + charting
|Platform||Accessibility||Adj.Session Times||Depth Of Market||Historical Data Access||Algorithmic Trading||Detachable Charts||Cloud storage|
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
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.
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.
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.
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 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 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.
|Bitcoin||AUS200 (Australian)||XAUEUR (Gold)|
|Ethereum||CN50 (China)||XAGUSD (Silver)|
|Litecoin||EUSTX50 (European)||XAGEUR (Silver)|
|Dash||FRA40 (French)||XPTUSD (Platinum)|
|GER30 (German)||XPDUSD (Palladium)|
|IT40 (Italian)||XTIUSD (US Oil)|
|JPN225 (Japanese)||XBRUSD (Brent Oil)|
|SPA35 (Spanish)||XNGUSD (Natural Gas)|
|UK100 (United Kingdom)||Sugar|
|US30 (USA)||Orange Juice|
|HK50 (Hong Kong)||Cotton|
|US2000 (USA)||XAUUSD (Gold)|
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.
Is Pepperstone An ECN Broker?
The Pepperstone Razor account offers ECN Broker spreads from 0.0 pips for the EUR/USD currency pair. Pepperstone connects forex traders directly with over 20 liquidity providers through the Electronic Communications Networks (ECN). The account offers straight-through processing with 22 liquidity providers. There is no dealing desk.
View our ECN broker article to learn more about no market-maker providers and Pepperstone.
What Is The Minimum Deposit Of Pepperstone?
The minimum deposit of Pepperstone is $200 in AUD or a traders account base currency. The broker actively doesn’t enforce this minimum deposit requirements. The minimum deposit requirement applies for both the Pepperstone standard account or Pepperstone razor account.
You can view more about funding and account here.
Does Pepperstone allow scalping?
Pepperstone allows scalping and hedging through the Razor trading account. Scalping is allowed through the MetaTrader 4, MetaTrader 5 or cTrader forex trading platform.
You can view our MetaTrader 4 vs MetaTrader 5 comparison to see which of the two most popular forex platforms is more suitable for your scalping requirements.
Is Pepperstone Legit?
Pepperstone is a legit broker based on it’s FCA and ASIC regulation, 10 years of operation, 57k+ traders worldwide and an average of $12,550m USD trades every day. View the key details of Pepperstone.
More Details About Pepperstone
Unlike most other foreign exchange brokers, Pepperstone is Australian based (in Collins Street, Melbourne) by a management-team with currency trading experience. In 2016 at the Pepperstone Melbourne office Champ was announced as a strategic investor of the business. The Pepperstone firm was founded in 2010 within Melbourn and hold the Australian Financial Services Licence 414530. Pepperstone Limited is the companies UK subsidiary and has the Financial Conduct Authority Registration Number 684312. In 2020 the company also opened another subsidiary in Dubai called Pepperstone Financial Services (DIFC) Limited further showing the company’s global expansion.
As an ASIC regulated forex broker, Pepperstone needs to meet capital requirements. Other requirements include staff training and complying with risk management processes, audits and accounting. If you hear of any Pepperstone scam this may be a broker pretending to be fx broker. Having an AFSL also means that Pepperstone financial accounts (client accounts) must be kept with Australian financial institutions which in this case is the National Australia Bank.
Traders can learn the fundamentals of online forex on the Pepperstone YouTube channel, as well as the online Pepperstone resource centre. There are online webinars and market analysis and also from time-to-time, the Pepperstone offices in Melbourne and London has on-site training for selected traders.
National Australia Bank
As an ASIC regulated Australian forex broker, Pepperstone is required to hold client funds in segregated bank accounts. Our review of Pepperstone found this was the National Australia Bank (NAB) which is one of the ‘big 4’. NAB is covered by the Australian government bank guarantee making it an optimal segregated bank account for traders.
The minimum deposit size is $200 for either the Razor ecn broker account or the STP standard Pepperstone account. The minimum deposit can increase for those who choose the active trader program. Deposit options include wire transfer, credit card, debit card, Skrill, PayPal and more as explained earlier in this review of Pepperstone. A withdrawal can be made through the same channel as deposits and are processed within a business day. This can be higher in some cases.
Pepperstone Limited offers a leverage level of up to 500:1 while Pepperstone Group Limited offers retail traders up to 30:1. Only a handful of AFSL forex brokers offer this level of leverage and means you can trade up to 500 times your deposit amplifying the exposure to currency markets.
Leverage associated with CFD trading (forex trading) high-risk activity. 79% of retail investor accounts with Pepperstone lose money so it’s critical to understand CFDs prior to trading. Make sure you only trade amounts you can afford to lose due to the threat of losing your money. Pepperstone also offers an Islamic account. This is swap-free account avoiding interest which can prevent some individuals from CFD trading.
Foreign Exchange Demo Account
Pepperstone offers a foreign exchange (online forex) demo account on the cTrader and MetaTrader platform. Our demo article explains more about the advantages of demo accounts, especially those that are new to foreign exchange trading. One a trader opens a live account they still have the option of using a demo for trading testing on the MT4 platform. A feature many traders use for expert advisors (EAs).
Technical Analysis Offered By Pepperstone
As technical analysis focuses on price trends over time there is a central focus on charting. Pepperstone offers three types of charts including a line chart that connects one closing price to another. This helps identify the direction of the market over a given time. The second type is bar charts which provides more details of market trends through line formats. This includes the highs and lows of specific periods. The final is candlestick charts which also shows the highs and lows over a period. This candlestick format helps identify reversals and pivot points on currency markets.
Fundamental Analysis Offered By Pepperstone
Focusing on financial, political and economic factors, fundamental analysis focuses on the events and forces that influence foreign exchange markets. These forces and events help impact currency markets which is why news (provided through Reuters) and daily market updates by Pepperstone are so critical. This information focuses on political policies, surplus and deficit information, inflation and trade trends.
The MetaTrader 4 or MetaTrader 5 App for Android® and iPhone® provide the core functionality of the online forex trading platform combined with the functionality of a mobile app. cTrader doesn’t have a mobile app but rather a mobile trading platform for those looking to trade on-the-go.
Countries Excluded From Trading With Pepperstone
Pepperstone is a worldwide forex broker but due to regulatory and other local laws, there are countries where residents can’t trade forex with the provider:
- New Zealand
About Compare Forex Brokers
The authors of compare forex brokers have made broker comparison tables to make finding the right Australian forex broker simple. There are also head-to-head comparison tables comparing Pepperstone tp brokers such as Hugoway as shown at the bottom of the page. There are several forex broker comparison tables each feature on separate areas including leverage and fx platforms offered. Feel free to view our forex broker comparison options each with separate brokers reviews created by real Australians.
This online Pepperstone review was based on information gained from the Razor fx trading accounts and the Australian forex brokers website. As such a standard review of Pepperstone should factor in the spreads of this alternative account. If you find any element of this online review of Pepperstone is inaccurate please inform us using the ‘contact us’.