XM is a market maker with a choice of Micro Account, Standard and ECN Account. This XM review looks at XM’s account types and explains account benefits. This XM review also looks at other XM feature like trading platforms, CFDs and minimum deposits.
Our XM review looks at all the key XM features
XM account structures are great for all traders but are well-suited to beginner traders as they are commission-free, require a low minimum deposit, allow micro lot trading and include negative balance protection.
XM offers 4 types of accounts, these are:
The main difference between each account is the allowable trading size. The micro account is designed for cent trading with Standard account is designed for conventional volumes.
The XM Micro Account allows trading with micro-lots (1000 units). With this account 1 micro lot (pip) is the equivalent of USD 10 cents. This account is commission-free.
A micro account is popular with the following types of traders
When you start out trading it can be wise to start with nano lots before progressing to micro and then mini lots. The more currency you invest, the more risk you take on so it can be prudent to build up your skills before using larger lot sizes.
The XM Standard Account allows trading with Standard lots (100,000 unit). With this account 1 lot = USD $10. This is a spread only account.
This is a commission-free account available in Australia, South Africa and some other select countries. The account allows trading with both micro and standard lots. The Ultra-Low Account differs from the Micro and Standard accounts in the following ways:
Traders joining XM in Europe and the UK will be signed up to either Trading Point of Financial Instruments Limited (Cyprus) or Trading Point of Financial Instruments UK Limited (UK). These XM entities do not offer the XM Ultra-Low Account. Instead, they offer the commission-based XM Zero Account. This account is different from the other accounts as they are based on an STP/ECN execution model rather than a market maker model.
Instead of wider spreads to cover brokerage fees, clients pay as a commission of $3.50 ($7.00 round trip) per $100,000 for each standard lot traded.
Spreads with the XM Zero account are therefore lower than with other accounts.
The main limitation with the Zero account is the limited base currency options and the higher minimum deposit of $100.
Of the spread-only accounts, The Micro Account and Standard Account spreads are wider than the Ultra-Low Account. Traders can expect spreads on these accounts to be roughly 1 pip higher on average. These means each trade you can expect to pay $10 more. If you are a frequent trader, this difference can add up over time.
Traders in Europe and the UK don’t have the option of an Ultra-Low Account but do have the Zero Account which has a different cost structure. On Average, the pip difference between the Ultra-Low Account and the Zero Account is about 7 pips. The round-trip commission is $7.00, so the cost is about the same.
XM has 3 types of commission-free accounts. These are Micro, Standard and Ultra-Low Accounts. Spreads for the Micro and Standard Accounts are the same. In the table below you will notice that the Micro and Standard accounts fare poorly when compared with other brokers. While this may make sense for the Micro account given you are trading lots with cents, meaning XM may have widened the spread as profit obtained through this account for them would below, it is surprising spreads for the Standard Account are not tighter.
Spreads for XMs Ultra-low account fare pretty well against other brokers with IC Markets the best. Depending on the currency pair, some spreads match spreads for the best pairs from other brokers. Across the board, spreads are somewhere between the matching the best and middle rung.
Data taken from broker website. Accurate as at 02/04/2021
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The Zero Account which is commission-based account using ECN style pricing and only available to XM clients in Europe and the UK fare decently against other brokers. With many currency pairs matching the best or close to the best.
Tiered Leverage: In some regions, XM has a tiered leverage policy. This means the higher volume you trade, the lower your maximum leverage will be. This encourages responsible trading as the high leverage with high volumes means high risk. Leverage will vary depending on the XM entity you trade with and their regulator. Tiered leverage isn’t necessary when a regulator only allows low levels of leverage to being with.
If you are trading from outside Europe, Australia and Dubai then you can have leverage as high as 1:888
The commission-free accounts are great options for beginner traders. If you are in a region that offers XM Ultra-Low account then this account is likely to be the account you would want to choose. With lower spreads and the same choices of trading lots as the Micro and Standard Account, this account presents the best value. The only reason to choose the Micro or Standard Account is if you want a rock bottom minimum deposit or if you wish your base currency to be JPY or RUB.
If you’re trading from the UK or Europe and cost-saving is your main concern then the Zero account offers the tightest spreads. The main catch with choosing the Zero account is the higher minimum deposit of $100 and the limited base currency choices being only USD, EUR and JPY.
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The overall rating is based on review by our experts
One of the key selling points of XM is they don’t provide requotes and guarantee fills will be completed for orders with less than 50 standard lots. XM advertise that they offer 100% of orders, with 99.35% orders executed in under 1 second.
When trading with XM, your positions remain open until they can be filled including pending orders and you can have a maximum 200 orders open at one time.
Tight spreads only make sense if you can trade on them. In this respect, the XM mission is to provide the best execution possible.
XM guarantee of no requotes is interesting as they are a market maker. A requote in forex lingo means the price you have entered cannot be completed as market conditions between the time you received your quote and the time you executed your order. This change in price due to lag time is known as slippage. When liquidity providers are unwilling to match your order, either a requote needs to be provided which happens when instant execution is applied or ‘best available’ price is automatically applied which is known as market execution. Instant and market execution are terms most familiar with ECN and STP No Dealing desk brokers.
As XM is a market maker rather than a no dealing desk broker, XM owns the liquidity and is your counterparty for your trades. So that XM can give you the most accurate pricing possible and avoid requotes, the XM network runs with very fast execution speeds. Fast execution speeds mean less lag and therefore less opportunity for slippage, this allows XM to display prices in real-time and execute your orders quickly. To ensure you receive the most accurate price possible, XM uses fractional pip pricing. Should prices change, market execution using the best available price in place of a requote will be applied.
During times of high market volatility, re-quotes tend to be frequent. XM guarantee of no requote makes them stand out among other brokers during such climates.
As XM is a market maker, they guarantee complete fills of your orders up to 50 standard lots (5,000,000). Using an ECN or STP broker means dealing directly with the liquidity market where liquidity providers can reject your order if they can’t meet the price or they don’t have the volume to complete the order.
As a market maker, XM ensures they have enough liquidity on hand at all times so that they can honour your order. As long as your order doesn’t exceed 50 standard lots, then you can expect your order to be completed. If your order exceeds 50 standard lots, then XM will use partial fills should the order not be completed as one. Placing two orders less than 50 lots is another option.
XM provides some flexibility when it comes to placing orders. While online orders will form the bulk of transactions, should your online system go down, XM give the option of providing order by phone, which may be useful in times of emergency.
XM includes guaranteed negative balance protection with all accounts. This guarantee means that you will never need to repay any debt from your account going below zero. A number of measures are in place to help protect your account balance, these are:
While XM will try to exit your open trades, slippage can still occur, meaning your account can still go below zero. If this happens, negative balance protection is applied. This means XM will return your account back to $0 and your debt will be forgiven.
Negative balance protection can help protect traders from accusing bad debt in a volatile market which may come about due to lack of experience or unexpected extreme market conditions
XM accepts clients from all over the world and is overseen by well-respected financial authorities such as ASIC, CySEC and the FCA. While financial regulation is much stricter in jurisdictions such as the UK and Cyprus, all traders and account types, regardless of location, receive a level of investor protection via XM’s negative balance protection.
Although negative balance protection ensures traders cannot end up in debt to the broker, insurance and compensation schemes imposed by CySEC and the FCA protect traders in the case XM becomes insolvent.
Retail clients registered with the CySEC regulated XM subsidiary are covered by the Investor Compensation Fund (ICF). Cyprus’ ICF ensures that if a CySEC regulated broker becomes insolvent and cannot return funds owed a client, the trader can claim up to €20,000 as compensation. Similarly, in the United Kingdom, under the Financial Services Compensation Scheme (FSCS), those trading with FCA regulated brokers are provided up to £85,000.
At this stage, ASIC and the IFSC do not enforce or provide any compensation schemes to protect retail investor accounts in the case that their broker becomes insolvent.
Additionally, most financial regulators including ASIC, IFSC, CySEC and the FCA require all licensed brokers to segregate client funds from company funds, ensuring traders’ account balances are not used as operational capital.
A full list of the Tier-1 Regulators that XM subsidiaries are overseen by include:
Both MT4 and MT5 are known as the gold standard of forex and CFD trading platforms as they offer advanced automated trading features and technical analysis tools.
The key difference between the two platforms is market access. MT4 is primarily a forex trading platform, while MT5 is a multi-asset platform that permits Share CFD trading. As well as a wider CFD product range, MT5 provides certain improvements over its predecessor in regards to trading and analysis tools.
Although a range of asset classes are accessible via MT4, the trading platform is a good option for those wanting to develop strategies that focus on forex trading. With advanced analysis and algorithmic trading tools, traders can execute sophisticated trading strategies that are completely automated.
MT4 users can automate trading using Expert Advisors (trading robots). As well as scanning markets for potential investment opportunities, EAs can be used to automatically open and close trades following a trader’s set of predetermined parameters. Traders can write their own EAs using the MQL4 programming language, or download free or paid EAs from the MetaTrader Marketplace online. To test Expert Advisors, trading strategies can be backtested against historical data. While backtesting allows traders to optimise automated trading strategies, MT4 only offers single currency backtesting.
In addition to fully functional algorithmic trading with Expert Advisors, traders using MT4 gain access to the following benefits and tools:
MT5 is a multi-asset trading platform where XM customers can gain access to over 300 Share CFDs as well as Forex and other CFDs. While MT4 is still the most widely used platform for retail traders, MT5 offers certain enhancements such as more sophisticated backtesting, technical analysis tools and risk management tools.
Rather than MQL4, MT5 traders use the more efficient MQL5 to write and develop Expert Advisors. As well as an easier-to-learn programming language, MT5 also offers improved backtesting, analysis tools and a greater range of order types:
MetaTrader 4MetaTrader 5General availabilityCommonGrowingNumber of Analytical tools3368Number of indicators3038Timeframes921Programming Language (for expert advisors)MQL4MQL5Number of orders executable34Number of pending orders available46Partial Order Filling PoliciesNoYesOrder Fill PolicyFill or KillFill or Kill Immediate or Cancel ReturnHedgingYesYes (since 2016)Threading32bit / 2GB64 Bit / 4GbSpeed / StabilityFast / StableFaster / More StableCFD TradingDecentralisedAll (Decentralised and trading exchanges)Strategy TesterSingle ThreadMulti-threaded + Multi-currency + Real ticksEconomic Calendarwith Add onYesDepth of MarketNoYes
XM offers MetaTrader 4 and MetaTrader 5 with versions of the software available for PC, Mac, Webtrader, iPhone, iPad, Android and Android tablets.
The online broker’s mobile apps offer a fully functional trading environment. When compared to the webtrader and desktop platforms, mobile users face no restrictions on order types or market access.
The online broker offers great market access to retail investor accounts with over 1,250 CFD trading products available to choose from.
Whether you want to focus on the most commonly traded currency pair (EUR/USD) or develop strategies using minor and exotic fx pairs, the XM group offers a great access to forex markets with no commission fees and low spreads.
While many of the best brokers charge traders a commission fee for stock CFD trading, XM provides commission-free commodity and share trading. The required margin and maximum leverage vary between asset classes and instruments and depend on the XM subsidiary you are trading with.
XM provides access to the following financial markets:
Please note forex, equity indices, commodities, energies and precious metals are available on both MT4 and MT5, while stock CFDs are only accessible on MT5. Unfortunately, XM does not offer Cryptocurrency trading on MT4 or MT5.
XM offers an extensive range of free features to ensure you have successful trading experience with them. Key features include personal account managers, webinars, and trading tools.
All XM clients are allocated a personal account manager who is available to assist you with any account or trading question you may have. XM personal account managers have a reputation for ensuring their clients get the best from their trading activities.
XM Live is a new webinar service, which (at no cost) provides a live discussion room with XM experts, sharing information between traders regarding trading fundamentals, education webinars and live debates between traders & broker.
XM Tradepedia is a free video series providing Forex education to traders. Their trading education lessons include:
The purpose of Tradepedia is that XM believes with the correct guidance, anyone can successfully trade.
Scheduled webinar instructors are a unique, impressive service offered by XM – offering 1 7 days a week scheduled trading webinars, with 49 instructors in 19 languages. This is offered as part of XM’s Tradepedia Forex education.
Live Forex seminars are scheduled seminars to meet with other traders (and potentially brokers) presented by their Portfolio manager Avramis Despotis, who teaches about the financial markets. The desired outcome from seminars is to spot changes in volatility, trading the intraday swings, using volatility to spot the best trades during the day, combining correct time frames and using a clearly defined set of rules to confidently trade.
XM Forex Calculator is a set of simple online calculators to convert currency, spreads, commissions, margins, swaps or a profit/loss.
Exclusive technical indicators are a series of digital resources to use in conjunction with either an MT4/MT5 account.
Trading indicators are an add-on script, which interprets graphical information as an overlay to charts; to act as a visual indicator to traders when analysing the current market trends. Their exclusive technical indicators include:
XM traders can get in touch with the broker’s customer service team via phone, live chat, and email. Although a good range of contact methods are offered by XM, phone, live chat and email support is not available on weekends and restricted to 24 hours a day, 5 days a week.
XM’s customer support team are multilingual, with representations fluent in English, Japanese, Chinese, Hindi, Arabic, Spanish, Italian, French, Russian, Hungarian, Portuguese, Czech, Slovakian, Bulgarian, Romanian, Dutch, Korean, Bahasa Indonesia and Bahasa Malay.
To deposit funds in an XM trading account, clients can use credit cards (Visa and Mastercard), debit cards, bank transfers, Western Union or e-wallet methods such as Moneybookers, Skrill, Neteller, MuchBetter Wallet, Trustly and Moneygrams.
To start trading with XM, an initial minimum deposit of $5 is required for Micro and Standard accounts and $50 for Ultra-Low accounts. When funding an established trading account, no minimum deposit is required, although certain e-wallet payment methods require a minimum of $5.
A downside to XM is its withdrawal fees for small sums. If a customer withdraws less than $200 from their trading account via bank wire transfer, they will incur a $15 administration fee. Additionally, XM only allows you to withdraw the amount you have deposited with a credit card or electronic wallets, therefore you can only withdraw trading profits via bank transfer.
While many brokers start charging clients account inactivity fees after 6-12 months, XM traders who have not traded for 90 days will be charged a monthly inactivity fee of $5.
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.