XM is a commission-free forex broker, while IC offers Standard and Tight ECN pricing accounts. Our forex team compared the XM vs IC Markets to see who offers the better spreads, trading platforms, account and CFD markets.
IC Markets and XM are online brokers that offer clients a range of forex and CFDs to trade. IC Markets is based in Sydney while XM is owned by TradingPoint international with head office in Limassol, Cyprus. Both brokers accept clients from all over the globe and is overseen by multiple financial authorities.
When choosing a broker, there are a number of considerations that should be taken into account. These include:
This review starts with a look at the trading fees. There is a large variation between brokerage costs from brokers, so looking at the broker’s spread costs is a good place to start. Low spreads generally result in lower trading costs. While a 1 pip difference in spreads between brokers might only be $10 USD, the costs will really add up when trading with multiple lots, leverage and frequent trading. So this review starts by looking at the broker’s spreads.
The Account types of the type brokers are explained in detail in the next section, but it is well worth noting IC and XM’s pricing structure. While both are top forex brokers, IC Markets and XM provide different trading conditions.
IC Markets is a no dealing desk broker. IC Markets offer ultra-low spreads by using Straight-Through-Processing (STP) to connect their clients with liquidity providers using fast trading execution. IC Markets offer ultra-low spreads because the quotes provided come directly from the banks, hedge funds and investors with no price manipulation from the broker. Instead of widening the spread to cover their costs, IC Markets apply a commission. With tight spreads and fast execution, ‘raw’ ECN style brokers such as IC Markets provide excellent trading conditions for those focusing on scalping, day trading, or Expert Advisor strategies.
As a market maker broker, XM matches orders internally through their own liquidity sources. Although market maker brokers set their own bid/ask prices, XM uniquely guarantees no requotes. Normally a feature offered by ECN/STP no dealing desk brokers, XM uses ultra-fast execution to minimise the risk of slippage and therefore the need to provide requotes. In the event quoted a price cannot be honoured, the broker uses the best available price rather than return with a new quote.
While XM and IC Markets offer different pricing structures, IC’s Raw Spreads account can be compared to XM’s Ultra Low account type (for traders outside Europe) and XMs Zero Spread account (for traders in Europe). The account differences are demonstrated in the below table.
XM’s Ultra Low account is matched to prices from liquidity providers with a markup in the spread rather than a commission to cover costs. When compared with IC Markets Raw account and XMs Zero spreads accounts once the $7 round turn commission fee is included, one can see the account prices are very comparable with other commission accounts. A $7 commission the equal to 0.7 pips. So if Ultra-low account has a 7 pip difference from the other accounts, the cost is the same.
Data taken from broker website. Accurate as at 02/04/2021
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For example, when trading the EUR/USD currency pair, XM Ultra-Low account offers commission-free spreads of 0.80 pips compared to IC Markets Raw account and XM’s Zero accounts which offer traders spreads of 0.10 pips plus a $7 commission fee: Using the table above:
While the above example suggests the spreads for each broker are the same or very familiar (remember the spreads are variable) CFB looked across a range of spread and found IC Markets to offer the most value overall. AUD/JPY and USD/SGD, for example, shows IC Markets to offer significantly better value.
Given AUD/JPY and USD/SGD are no major currency pairs, it is possible XM have competitive on the major pairs that are in line with IC Markets but offer lower value for minor and exotic forex pairs.
IC Markets and XM both offer commission-free standard spreads that suit infrequent or beginner traders wanting to avoid calculating complex commission costs. When the two brokers are compared, IC is the clear winner with average spreads of 1.40 for the AUD/JPY and EUR/GBP forex pairs, while XM offers 3.30 pips and 2.00 pips, respectively.
As well as spreads and commission fees, trading costs can be increased by inactivity fees and overnight financing fees (swap rates).
Note, both brokers charge triple swap rates on Wednesday evenings.
With no dealing desk (NDD) interference as well as the option of commission-free or ECN-style pricing, IC Markets generally offers better spreads and execution than XM. While the XM Zero account (which is only available to European traders) may match IC Markets spreads for some currency pairs, it fair significantly poorly on other pairs. IC Markets can, therefore, be said to offer better value when it comes to brokerage fees.
XM is mainly a commission-free broker but does offer a commission ECN style account to its European clients, while IC Markets offers both a standard or commission-based ECN-style pricing to all its clients. Both brokers offer swap-free account types for Muslim clients.
IC Markets offers three trading account types with different spreads and commission fee structures:
All IC Markets account types require an initial minimum deposit of $200 with 0.1 micro-lots volumes available to trade.
The broker’s commission-free account type provides access to spreads starting from 1.0 pip and is available on MetaTrader 4 or MetaTrader 5. With no commission fees, IC’s Standard account is a great option for low volume or beginner trader’s wanting to avoid complex commission fee calculations.
Similar to an ECN account type, IC’s Raw Account provides access to institutional-grade pricing with minimum spreads starting from 0.0 pips.
Ideal for scalping, day trading and Expert Advisor strategies, IC connects Raw account holders to top-tier liquidity providers with fast order execution. As spreads are ultra-tight, averaging 0.1 pips, traders pay a flat rate commission fee of $7 round-turn.
Customers can also access ECN-style pricing with minimum spreads of 0.0 pips through IC Markets Raw Spread Account designed for the cTrader platform. One of the major differences between the MetaTrader and cTrader Raw Accounts is trading costs with cTrader users paying a lower commission fee of $6 round-turn.
Regardless of account type, customers can set up their trading accounts using one of 10 base currencies offered by IC Markets: AUD, USD, NZD, JPY, SGD, GBP, EUR, CHF, CAD, and HKD
Four account types are offered by XM with varying minimum deposits, base currencies, spreads and lot sizes:
All XM account types are available on MetaTrader 4 and MetaTrader 5.
XM’s Standard Account offers commission-free trading with lot sizes of 100,000. A low minimum deposit of $5 is required to open a Standard Account.
For those wanting to trade smaller volumes, the XM’s Micro Account offers cent trading with micro-lots of 1000 units. With a low minimum deposit of $5 and no commission fees, the online brokers Micro Account is a good option for beginner traders who want to build confidence trading lower volumes, or lack the funds to trade larger lot sizes.
Additionally, XM’s Micro Account type allows traders to be more precise with their position sizing, with the ability to trade nano lots of 100 units by reducing your trading volume to 0.1, or mini lots of 10,000 by increasing your trade volume to 10 lots.
If you are based outside of the United Kingdom and Europe, you can sign up to XM’s Ultra-Low Account that provides access to tighter commission-free spreads than the broker’s Standard and Micro Accounts. While Standard and Micro accounts can trade minimum spreads from 1 pip, Ultra-Low accounts are offered spreads as low as 0.6 pips. A higher initial minimum deposit of $50 is needed with traders able to choose between standard or micro contract sizes.
European and UK based traders are able to sign up to XM’s ECN-style Zero Account. Instead of the Ultra-Low account, XM’s European and UK subsidiaries offer a commission-based trading account type. As spreads are much tighter, traders pay a flat rate commission of USD $3.50 per $100,000 traded. Zero Account holders trade standard contract sizes of 100,000 units per lot.
Although spreads can be as low as 0.0 pips, there are certain downsides to the Zero account such as limited market access (forex, gold and silver) and only three base currencies (USD, JPY or EUR).
All of IC Markets account types and trading platforms are available as a swap-free Islamic account option with the same spreads and commission fees explained above. Instead of interest-based overnight financing fees, traders pay flat rate charges ranging from $5-$50 per lot, with fees tripling on Friday evenings.
XM offers an Islamic account option for Standard, Micro, and Ultra-Low account types. As Islamic traders cannot earn or receive interest, XM provides a swap-free option that follows Islamic finance practises in accordance with Sharia Law. XM’s Islamic account features include:
The leverage offered to you will differ between XM branches. The broker’s European and Australian branches restrict leverage to 30:1, while UAE based traders can use 50:1 under Dubai’s DFSA trading rules.
If you are looking for higher leverage, XM’s offshore branch regulated by the International Financial Services Commission (IFSC) offers up to 888:1 when trading forex. Yet, please note forex is a complex instrument that comes with a high risk that’s amplified with leverage.
As with XM, the maximum leverage you are allowed to trade with as an IC Markets client depends on the subsidiary you are signed up to. IC Markets is overseen by three financial regulators, being:
The FSA in the Seychelles allows broker’s to offer high leverage up to 500:1 when trading forex. But, financial regulation is stricter in Europe and Australia, IC’s branches overseen by CySEC and ASIC are only allowed to offer leverage up to 30:1 on major currency pairs, and 20:1 on minor and exotic fx pairs.
The right account to choose will depend if your style of trading. The table below summarises each account and if they are for you.
While you can make a case for choosing any of the accounts depending on the trader’s needs, IC Market’s Raw account types are winners due to tight spreads and the broker’s ECN-style environment. Whether you want to use cTrader or MetaTrader, you will pay low commission fees and be able to access minimum spreads of 0.0 pips and average spreads of 0.1 pips.
Both brokers offer a choice of popular trading platforms, with neither offering proprietary software as an alternative. All options provide advanced technical analysis tools and automated trading features, though market access varies between platforms.
In total, IC Markets offers three trading platform options. Standard account holders can choose between MetaTrader 4 (MT4) and MetaTrader 5 (MT5), while Raw Spread accounts also have the choice cTrader. Commission fees, CFD product range and trading tools vary between each platform, yet all options provide access to low spreads and ultra-fast execution.
Another difference between IC Markets trading platforms is where servers are located. Equinix servers facilitating trading for IC’s MetaTrader Raw and Standard accounts are based in New York’s data centres, while cTrader’s server is based in London. Depending on where you are located, this may be important to gain the fastest execution speeds with minimal lag.
As an XM customer, you can choose between MetaTrader 4 and MetaTrader 5, with the main difference being the CFD product range available to trade. MT4 is a great option for those wanting to focus on index, metals, energies and forex trading. Yet, if you are interested in trading shares with XM, you will need to use MT5.
Unlike IC Markets, XM only has one trade server, located in London.
MT4 and MT5 are two of the most popular trading platforms worldwide. MT4 is considered predominately a forex trading platform (although indices, crypto and commodities are available), while MT5 is a multi-asset platform offering share trading as well.
When using MT4 and MT5, IC and XM customers can automate trading via algorithmic strategies (Expert Advisors) or social-copy trading tools.
Using the MQL4 (MT4) or MQL5 (MT5) programming language, traders can write Expert Advisors (EAs) that automatically execute trades according to a set of preset conditions. Beginner traders who lack the experience to develop their own trading robots can download and buy EAs from MetaTrader’s Marketplace online.
To develop efficient Expert Advisors, traders can use MT4’s and MT5’s backtesting features. This allows you to test and optimise EAs against historical data to see how they perform. MT5’s backtesting tools offer improvements over MT4, with the ability to backtest multiple currency pairs at a time:
If you prefer to automate your trading via social-copy trading tools rather than EAs, MetaTrader platforms offer their proprietary copy trading software, Trading Signals. Available on both MT4 and MT5, Trading Signals enables you to follow and copy the trades of experienced traders, reducing the time spent researching opportunities and executing orders.
As well as the inbuilt social-trading tools provided by MetaTrader 4 and MetaTrader 5, users can also engage in social-copy trading by using third-party providers. Although XM does not offer these services, IC Markets provides a selection of account mirroring services to help customers automate trading:
Traders can utilise the advanced range of charting tools available on MT4 and MT5 to identify changes in financial markets and profitable strategies. While both platforms offer a solid range of technical analysis tools, MT5 provides a wider selection of features compared to its predecessor. As shown below, MT5 users gain access to a larger collection of indicators, objects and timeframes to perform technical analysis.
As well as the inbuilt trading tools available on MetaTrader 4, IC Markets offers a plug-in package consisting of 20 additional apps and technical indicators such as a correlation matrix and alarm manager.
While XM clients are only offered MT4 or MT5, IC Markets customers signed up to a Raw Account type can choose cTrader as there trading platform. As with MT4, cTrader is predominately a forex trading software with no share CFDs offered by IC Markets on the platform.
cTrader users can enjoy an ECN-like trading environment with ultra-fast execution and IC Market’s Raw pricing. Like MetaTrader’s Expert Advisors, cTrader users can fully automate trading by developing cBots. Other features include:
MT4, MT5 and cTrader are all available as a desktop or webtrader platform, as well as trading apps designed for Android and iOS devices. The mobile apps allow you to trade easily on the go, all providing an extensive range of mobile charting tools and order types.
With advanced automated trading tools (EAs), extensive charting tools and CFDs including Shares, MetaTrader 5 offers the best features when compared to MetaTrader 4 and cTrader. As IC Markets and XM both provide customers access to MT5, this round is a draw between the two online brokers.
As CFDs and Forex are complex instruments, it is important to minimise the high risk of trading and avoid scams by signing up to a regulated broker. Most international brokers have multiple subsidiaries that are overseen by different financial authorities and therefore provide different levels of investor protection.
For example, FCA, ASIC and CySEC regulated brokers are required to display clear risk warnings, segregate client funds, provide negative balance protection, and enforce leverage caps of 30:1.
IC Markets is well-respected by the international forex community with over 100,000 customers worldwide. If you reside in Canada, the United States, Iran or Israel, you will not be able to register as an IC Markets client. Traders based elsewhere can choose from three IC subsidiaries:
IC Markets customers registered with the UK and Australian branches will receive negative balance protection, while leverage is limited to 30:1 when trading major currency pairs. IC Markets Global (FSA) customers are offered significantly higher leverage of 500:1 yet no negative balance protection is provided.
XM offers negative balance protection to all customers, regardless of whether it’s a requirement of local financial authorities. Negative balance protection means that customers cannot end up in debt to their brokers, with open positions automatically closed if a trading account enters a negative balance due to unfavourable price movements. This level of investor protection may be particularly appealing to beginner traders who are concerned about losing more than they deposit.
While all XM branches provide negative balance protection, additional investor protection may vary depending on the subsidiary you sign up to:
IC Markets and XM are overseen by multiple tier-1 financial authorities, with both brokers being viewed as trusted, reliable forex brokers by the international forex community. As XM offers negative balance protection to all clients, regardless of location, they provide the strongest investor protection overall.
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As well as trading with a tier-1 regulated broker, traders can reduce the high risk of forex and CFD trading by utilising different order types. To ensure profits and maximised and losses minimised, traders can use pending order types in addition to standard market orders. Both IC Markets and XM offer trading platforms that provide a range of order types on MetaTrader 4, MetaTrader 5 and cTrader.
Please note, availability of order types varies between trading platforms.
As mentioned in the previous section, XM is well-known for providing negative balance protection (NBP) to all clients, while IC Markets provides NBP to European and UK customers only.
IC Markets and XM offer a very similar range of risk management tools. Depending on the trading platform you choose, you can utilise different order types such as stop-loss orders to reduce the high risk that comes with forex and CFDs, regardless of which broker you are trading with.
XM and IC Markets both offer a wide range of asset classes ranging from Forex to Commodities to Share CFDs. As market access differs between MT4, MT5 and cTrader, the products you want to trade will help determine the best-suited trading platform and account type for you to choose.
As an XM customer, you can trade over a 1,000 financial instruments derived from Forex, Commodity, Equity Index, Precious Metal, Energy and Share asset classes. As a multi-asset trading platform, MetaTrader 5 users can access XM’s full product range, while MT4 traders can only trade Forex, Indices, Commodities and Precious Metals. A major downside to trading with XM is that they offer no cryptocurrency CFDs. XM’s full product range consists of:
XM does not offer its full CFD product range to all traders. UK and European customers signed up to an XM Zero account type are limited to trading Forex and Precious Metals, while MetaTrader 4 users are unable to trade Share CFDs. If you are interested in Share trading, MetaTrader 5 is better suited as it is a multi-asset trading platform that offers more diverse market access.
IC Markets provides excellent market access with a greater range of asset classes than XM. As well as Forex, Index, Energy, Agriculture, Metal and Share CFDs, the broker also offers Bonds, Futures and Cryptocurrency CFDs, including:
Likewise to XM, Share CFD trading is only available when using MetaTrader 5. Futures are only available on MT4 while cTrader users are restricted to Forex trading and Equity Indices.
Although XM offers a good range of CFDs and over 1,000 Shares, IC wins this round due to offering more Forex pairs, an excellent selection of Cryptocurrency CFDs plus a diverse collection of asset classes. To make the most of the market access offered by IC Markets, it is best to sign up to a Raw account type using MetaTrader 5, as cTrader and MT4 do not permit Share trading.
Contact methods, availability and online resources all determine the quality of a broker’s customer support.
IC Markets offers excellent customer support via live chat, phone and email. Those trading with IC Markets ASIC and FSA regulated branches can get in touch with the broker’s customer service team 24/7, while European and UK traders will need to contact IC between Monday and Friday.
The online provides a great range of educational materials to assist all levels of experience, from beginner traders wanting to learn the basics, to seasoned investors wanting to develop complex trading strategies and conduct advanced market research. Examples of resources include:
XM customers can get in touch with the broker’s customer support team via live chat, email, and phone. Unlike IC, no 24/7 assistance is provided, with traders only able to contact XM 24 hours a day, 5 days a week. Additionally, the broker’s website provides a comprehensive FAQ where many common forex trading queries are answered.
XM offers free educational courses including:
With 24/7 customer service and educational materials for all levels of trading experience, IC Markets offers better client support overall.
As an XM customer, you can deposit and withdraw funds from your trading account using a range of credit card and e-wallet options. Available deposit and withdrawal methods offered by XM include:
All account funding options are fee-free unless you deposit less than $200 USD via international bank wire (in which case traders will face a $20 deposit fee).
IC Markets offer an even greater range of funding methods than XM, with an impressive 15 funding options available. Although IC Markets traders incur no fees when making deposits and withdrawals, accepted currencies and processing times vary between payment method.
As mentioned above, funding options vary between a broker’s subsidiary and location. For instance, if you are registered with IC Markets FCA regulated subsidiary, you are only able to deposit and withdraw funds via Credit and debit cards, Wire transfer, Neteller and Skrill.
XM provides a good range of payment methods, yet unfortunately, smaller deposits less than $200 made by wire transfer carry a $20 fee. On the other hand, IC Markets offers some of the best funding methods available to retail investor accounts with no deposit and withdrawal fees, plus 15 different payment options to choose from.
While both IC and XM are both top forex and CFD brokers that accept international traders, IC Markets offers a greater range of features that enhances your trading environment. With ECN-like spreads as low as 0.0 pips, no dealing desk interference, low fees and ultra-fast execution, IC provides excellent trading conditions for those wanting to develop automated trading tradings using Expert Advisors or social-copy trading tools. To access IC Markets full product range including Forex, Shares and Cryptocurrency, MetaTrader 5, a multi-asset platform, is better suited than MT4 or cTrader.
As well as low spreads and different asset classes to trade, IC Markets customers can use the broker’s different risk management tools to reduce the risk of forex, while knowing IC’s top-tier regulators ensure a certain level of investor protection is provided through negative balance protection or segregated funds. To explore IC Markets CFDs and trading tools, a demo account is available for MT4, MT5 and cTrader.
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.