XM vs Pepperstone

XM vs Pepperstone: Everything You Need To Know About The Brokers Account Types

Pepperstone and XM offer a choice of account types to choose from. As well as commission-free and ECN-style accounts, both brokers offer swap-free accounts suited to Islamic traders.

Pepperstone Account Types: Commission & No Commission Options

Pepperstone offers two accounts types. Standard accounts types are commission-free, while Razor accounts charge flat-rate commission fees yet provide ECN-like spreads. Account features that both Razor and Standard accounts offer include:

• Minimum trade size: 0.01 lots
• Maximum trade size: 100 lots
• Scalping and hedging permitted
• Leverage of up to 500:1 (ASIC) or 30:1 (FCA)
• $200 minimum deposit to open an account, although Pepperstone tend to be flexible with initial deposit requirements

The main differences between the two account types are:

• Razor Account: Minimum spreads of 0.0 pips and round turn commission fees of $7
  • Ideal for scalping, Expert Advisors and active traders
• Standard Account: Minimum spreads of 1.0 pips but no commission fees
  • Suited to infrequent or beginner traders

XM Trading Account Types

XM offers four retail investor accounts for forex trading that feature different contract sizes, minimum deposits, minimum spreads. As shown below, all of XM’s account types are commission-free apart from the broker’s ECN-style Zero Account.

Traders wanting to practise trading with low volumes, have smaller account balances or require precise position sizes are well-suited to Micro Accounts, while Ultra-Low Accounts offer flexible features of both Micro and Standard Accounts, although a higher minimum deposit is required.

Availability of each account type depends on your location and the XM subsidiary you are trading with. Only traders based in Europe or the UK can sign up to Zero Accounts and are not able to register for Ultra Low Accounts.

Swap Free Accounts

Pepperstone’s Swap Free Account is similar to the broker’s Standard Account, except traders do not pay or receive swaps. Designed for those following Islamic finance practices, Swap Free account holders do not pay or receive interest-based overnight financing fees. As with the broker’s standard account, minimum spreads are as low as 1.0 pip and commission-free.

A limitation of Pepperstone’s Swap Free Account is that you are restricted to four base currencies, being the USD, GBP, EUR or AUD. If those using Swap-Free Accounts keep a position open for longer than 10 days, traders will incur an admin charge that ranges between USD 1-50.

XM’s Islamic Accounts are offered to forex traders of the Islamic faith. With no swaps or overnight interest fees, the account type complies with Islamic finance practises where interest based payments cannot be incurred or received. As well as imposing no hidden costs, XM does not widen spreads or charge fees for positions held open for longer periods.

Leverage

When trading forex, the maximum leverage you can use depends on your broker’s financial jurisdiction and regulators.

• ASIC (Australia): Maximum forex leverage 500:1
• FCA and CySEC (UK and Europe): Maximum major currencies 30:1, minor and exotic currencies 20:1
• DFSA (Dubai): Maximum leverage 50:1
• IFSC (Belize): Max leverage 888:1

While Pepperstone offers a fixed leverage system following regulatory requirements, XM’s tiered leverage system is a unique feature that limits leverage on higher trading volumes. For example, those registered with XM’s Australian subsidiary are able to access the following amounts of leverage:

• If you are trading between $5-$20,000 you are offered leverage between 1:1 to 500:1
• If your trading volume is between $20,001 and $100,000 your maximum leverage is reduced to 200:1
• If the value of your trade exceeds $100,001, then you are limited to maximum leverage of 100:1

Best Trading Account Type: XM or Pepperstone?

Account features vary greatly between XM and Pepperstone accounts. While XM offers flexible leverage and lot sizes, minimum spreads are generally wider than Pepperstone, with XM enforcing leverage caps if you are trading high volumes of forex. On the other hand, Pepperstone’s Razor Account provides an ECN-trading environment suitable for active traders or algorithmic strategies and therefore the best account type for forex traders.

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XM vs Pepperstone: Choose From The Best Trading Platforms

Pepperstone and XM both offer MetaTrader 4 (MT4) and MetaTrader 5 (MT5) software, with Pepperstone Razor account holders provided the additional trading platform option of cTrader. All platforms allow you to conduct advanced analysis while automating trading with algorithmic strategies or account mirroring services.

MT4, MT5 and cTrader are available as a desktop or webtrader platform as well as trading apps for iOS and Android devices. Trading platform features are outlined below, followed by the social trading tools and add-on features offered by both brokers.

MT4 & MT5

Both Pepperstone and XM provide access to the hugely popular MT4 and MT5 trading platforms. As well as advanced charting and analysis tools, MetaTrader users can fully automate trading by using Expert Advisors (EAs). EAs allow traders to develop algorithmic trading strategies where positions are automatically opened and closed according to a set of parameters determined by the user, reducing the time spent finding profitable opportunities and placing orders. For beginner traders who may lack the experience needed to write Expert Advisors themselves, the MetaTrader’s online Marketplace offers an extensive library of EAs that can be purchased and downloaded.

Key differences between MT4 and MT5:

• MT4 was designed as a forex trading platform (Share CFDs are not available), while MT5 is a multi-asset platform that permits share trading.
• Expert Advisors are created using the MQL4 programming language on MT4 compared to MT5 that uses MQL5.
• To backtest EAs against historical data, MT4 users can only test one currency at a time. MT5 offers the improvement of multi-currency backtesting.
• Four pending order types are available on MT4 and six order types are offered on MT5.
• MT5 provides a wider range of charting tools with 38 inbuilt indicators, 44 objects, and 21 timeframes. MT4 offers 30 technical indicators, 31 objects and 9 timeframes.
• MT4 only allows hedging, whereas hedging and netting are both permitted on MT5.

As well as the differences mentioned above, MT5 also offers improvements over MT4 such as an economic calendar, depth of market and an MQL5 trading community chat function.

c Trader

Pepperstone’s Razor account holders can access cTrader but the platform is not offered to XM customers. cTrader is a forex trading platform that provides an ECN-style trading environment with ultra-fast execution and institutional-grade pricing. cTrader features include:

• Extensive analysis tools with 70 inbuilt technical indicators and a range of objects and charts.
• Level 2 depth of market to provide traders with ECN-like pricing.

Like MetaTrader 4 and 5, algorithmic trading strategies can be executed on the cTrader platform. Instead of Expert Advisors, traders can develop cBots using the C# programming language that automatically monitors markets and enters/exits positions following the trader’s preset parameters.

Social Trading: Pepperstone vs XM

Pepperstone offers four different social-copy trading tools that customers gain use to automate trading:

• Myfxbook
• DupliTrade
• Mirror Trader
• MetaTrader Signals

The account mirroring services allow you to copy and follow the trades of experienced investors, greatly reducing the time spent analysing markets and conducting research. This can be an excellent tool for beginner traders as it provides the opportunity to learn from seasoned traders and build confidence forex trading. When searching for trading strategies to copy, most third-party providers allow you to filter traders by risk profile, location and asset classes being traded.

XM traders can access the broker’s free forex signals through the broker’s ‘Members Area’ online. Trading signals supported by XM’s expert traders and analysts can be easily copied into both MT4 and MT5, with 10 currency pairs covered daily.

Which Broker Offers the Best Trading Platform and Tools?

With three trading platform to choose from and multiple social-copy trading options, Pepperstone provides superior forex trading software when compared to XM. As MetaTrader 5 offers certain benefits over MT4 and cTrader such as multi-currency backtesting, a wider product range and MQL5 Expert Advisors, using MT5 with a Pepperstone Razor account is a great option for all traders regardless of trading strategy or experience.

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XM vs Pepperstone: Earning Trust With Tier-1 Regulation

Both XM and Pepperstone are overseen by well-respected financial authorities that enforce differing regulation for online brokers. Trading CFDs and forex with a regulated broker ensures policies are in place to provide investors’ protection and can reduce the high risk of trading.

Pepperstone: Top-Tier Regulators

With oversight from the three major regulatory bodies around the world, Pepperstone is seen as one of the most trusted forex brokers.

• Australia: The Australian Securities and Investments Commission (ASIC)
• The United Kingdom: The Financial Conduct Authority (FCA)
• Germany: The Federal Financial Supervisory Authority of Germany (BaFin)
• Dubai: The Dubai Financial Services Authority (DFSA)
• Europe: The Cyprus Securities and Exchange Commission (CySEC)
• Kenya: The Capital Markets Authority (CMA)
• Global: The Securities Commission of the Bahamas (SCB)

While all regulators require brokers to segregate client funds from company funds, only those trading with the United Kingdom subsidiary will receive protection through the FCA’s Financial Services Compensation Scheme (FSCS). The FSCS protects clients in the case a broker becomes insolvent by providing compensation up to £85,000. Additionally, the FCA and CySEC enforce leverage caps of 30:1 for major currency pairs and 20:1 for minor and exotic fx pairs.

Pepperstone’s Dubai branch accepts residents of Dubai as well as certain Gulf states, while the FCA regulated entity caters to European and UK traders. Most traders based elsewhere are able to register with the ASIC regulated Pepperstone branch.

Multi-Regulated Forex Broker: XM

XM is regulated by multiple financial regulators with clients protected through segregated funds in each of XM’s five different locations. Depending on where you reside, you can register with one of the following XM subsidiaries:

• The United Kingdom: FCA
• Australia: ASIC
• Dubai: DFSA
• Cyprus: The Cyprus Securities and Exchange Commission (CySEC)
• Belize: International Financial Services Commission (IFSC)

Like Pepperstone’s UK branch, XM traders’ account balances are protected through compensation schemes if they are based in the UK (FCA) or Europe (CySEC).

Regulated Brokers: XM & Pepperstone

Both brokers are regulated by top-tier financial authorities in multiple locations and follow the regulation enforced in each jurisdiction. Although policies providing investors protection vary between subsidiaries, XM and Pepperstone are highly regulated and well-respected online brokers.

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XM vs Pepperstone: Safer Trading With Risk Management Tools

To manage the high risk of trading CFDs and forex, investors can utilise XM’s and Pepperstone’s range of risk management tools to manage exposure. Three main types of risk management features are offered:

1. Negative Balance Protection
2. Order Types
3. Demo Accounts

What is Negative Balance Protection?

Negative Balance Protection (NBP) is a policy enforced by certain brokers that ensure traders do not lose more funds than they have deposited. If markets are volatile and moving rapidly, trading account balances have the potential to enter negative balances, causing traders to end up in debt to their broker. When balances enter negative values, brokers with NBP policies will close all of a trader’s open positions, ensuring the client does not become indebted to the broker.

NBP: Pepperstone

In line with the United Kingdom’s financial regulation, Pepperstone provides negative balance protection to those trading with their FCA and CySEC regulated subsidiaries. As NBP is not a requirement for elsewhere, Pepperstone clients outside of the UK and Europe are not protected by NBP.

Please Note: from March 2021, ASIC is introducing compulsory NBP for Australian traders and brokers.

Negative Balance Protection: XM

Unlike most top forex brokers, XM offers negative balance protection to all customers, regardless of their location or the XM subsidiary they are registered with. Therefore, all XM traders cannot lose more funds than they have deposited into their trading account.

Order Types

When trading CFDs and forex, order types help to reduce the high risk that comes with volatile markets. While market orders buy or sell a financial instrument at the current market price, pending orders can be used to buy or sell when a pre-defined price is met in the future.

Both XM and Pepperstone offer the same pending order types, although availability differs between trading platforms. Neither broker offers premium orders such as guaranteed stop losses, with the following basic order types available on MT4, MT5 and cTrader:

• Buy Limit/Sell Limit
• Buy Stop/Sell Stop
• Buy Stop Limit/Sell Stop Limit (MT5 only)
• Stop Loss
• Take Profit

Using Demo Accounts to Reduce Risk

As well as order types and top tier regulation, demo accounts can be used to test and optimise trading strategies in realtime market conditions.

• Pepperstone offers demo accounts for MT4, MT5 and cTrader. Access is granted for 30 days, with $50,000 of virtual funds provided.
• MT4 and MT5 XM demo accounts are provided with a virtual balance of $100,000 and unlimited access.

Best Risk Management Tools Overall

With negative balance protection for all customers, basic order types and a demo account with no time restrictions, XM is the clear winner when it comes to risk management features.

View XM Review >>Visit XM >>

XM vs Pepperstone: CFD Product Range

In addition to forex trading, both XM and Pepperstone offer a range of asset classes and CFDs that customers can trade. As MT4 and cTrader are forex platforms, both Pepperstone and XM’s Share CFDs are only available when using MetaTrader 5.

Market Access: Pepperstone

Pepperstone clients gain access to over 150 financial instruments derived from five different asset classes:

• Forex: Over 61 forex pairs as well as a currency index CFD (US dollar index)
• Indices: 14+ stock market indices with no commission fees
• Commodities: Gold, silver, gas, oil and soft commodity CFDs.
• Cryptocurrencies: Bitcoin, Ethereum, Dash Litecoin and Bitcoin Cash CFDs (not in the UK)
• Share CFDs: 64 CFDs derived from major, top-quality stocks.

Those trading forex and CFDs with Pepperstone’s UK branch should note that cryptocurrency trading is no longer available to retail traders due to recent changes in FCA regulation.

XM’s CFDs

XM offers a greater range of CFDs with thousands of different products available, yet they do not offer any Cryptocurrency CFDs, which is a major weakness.

• Forex: Over 55 major, minor and exotic currency pairs
• Indices: Cash and future stock indices from major global exchanges.
• Commodities: Soft, energy and precious metal commodity CFD products.
• Share CFDs: Over 1,100 different share CFDs from 18 different countries.

XM vs Pepperstone: Best CFD Range

Unlike XM, Pepperstone offers Cryptocurrency trading, yet on the other hand, XM offers a much wider range of Share CFDs. As the two brokers offer similar asset classes and the number of currency pairs, XM and Pepperstone tie in regards to CFD product range.

View XM Review >>Visit XM >>

XM vs Pepperstone: Customer Service And Customer Support

XM and Pepperstone offer multiple contact methods, along with research and educational materials to assist traders. Whether you are new to forex trading or wanting to develop your develop advanced analysis skills, both brokers provide a range of resources ranging from webinars to economic calenders.

Award-Winning Customer Support: Pepperstone

Pepperstone offers award-winning customer support via live chat, phone and email. Pepperstone responds to email queries within 24 hours, while phone and live chat contact methods are available 24 hours a day, 5 days a week.

The online broker is well known for its excellent trading support, receiving the following awards for their customer service:

• Best Client Relationship Manager Service, 2019 Professional Trader Awards
• Best Forex Trading Support, Global Forex Awards 2019
• Best Forex Trading Support, UK Forex Awards 2018
• #1 for Customer Service, Australia FX Report

Customer Support: XM

XM offers multilingual customer service with live chat, phone and email contact methods available. Unfortunately, while assistance is available 24/5, XM is known for poor customer service with long response times and irrelevant answers.

Education and Research: Pepperstone

When trading with Pepperstone, customers gain access to a library of educational resources suited to both beginner and experienced traders. Articles, webinars and tutorials cover topics such as the basics of forex trading, technical analysis, Expert Advisors and trading strategy development. Upcoming webinars can be found on the broker’s website, with past webinars available to watch anytime. For those wanting to build confidence trading on MetaTrader 4, an extensive trading platform tutorial is also available.

As well as educational materials, Pepperstone clients can utilise a range of research tools to enhance their forex knowledge and develop strategies. The broker’s research and analysis tools include:

• Trading ideas via Autochartist
• Newsfeed and market analysis with reporting from Pepperstone’s in-house expert research team
• Advanced charting tools inbuilt into all trading platforms offered by Pepperstone

Research and Education: XM

XM offers a free educational course that explains the basics of forex trading with a focus on fundamental and technical analysis. Like Pepperstone, tutorials are available in addition to live webinars that are hosted by industry experts.

A detailed economic calendar and newsfeed can be used to research financial markets yet overall, XM’s fundamental research tools are limited.

Best Customer Service Overall: Pepperstone vs XM

With award-winning customer support, comprehensive educational resources and strong research tools, Pepperstone provides the best customer support when compared to XM. All contact methods gain efficient responses while XM suffers a reputation for poor and slow support.

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XM vs Pepperstone: Funding Methods – Deposit And Withdrawals

Pepperstone and XM both offer traditional and e-wallet payment methods. Please note, availability of the below funding options varies depending on your location and the subsidiary you are trading with.

Account Funding: Pepperstone

When opening a Pepperstone account, you can choose the AUD, NZD, SGD, HKD, JPY, USD, EUR, CAD, CHF or GBP as your trading accounts base currency.

To fund your account, Pepperstone provides a wide range of fee-free deposit options such as:

• Debit and credit card: Visa, Mastercard, UnionPay
• Neteller, Skrill, POLi, BPay and PayPal
• Bank transfer (approx $20 fee for international transfers)

When withdrawing funds from your account, Pepperstone will return the funds into your nominated bank account within 3-5 days.

Account Funding: XM

Base currencies available depend on the XM account type you are signed up to with Zero accounts restricted to fewer options:

• Micro and Standard Accounts: AUD, USD, EUR, GBP, CHF, JPY, RUB, PLN or HUF
• Ultra-Low Account: AUD, GBP, EUR, USD, CHF, HUF or PLN
• Zero Account: EUR, USD or JPY

Depending on the subsidiary you are signed up to and the location you are trading from, XM offers the following deposit options:

• Debit and credit card: UnionPay, Visa, Mastercard
• Skrill, Neteller, Sofort, CashU, Przelewy 24, Bitcoin
• Bank transfer

All deposit methods are fee-free unless you transfer less than $200 via bank transfer, where a $20 fee will apply. When making a withdrawal, XM will return the funds via the same method as funds were deposited. I.e. if you make deposits via Skrill, funds can only be returned to your Skrill account.

Best Payment Options

With no deposit and withdrawal fees and e-wallet funding methods such as PayPal, Skrill and BPay, Pepperstone provides the best payment options when compared to XM. XM charges fees when small amounts are transferred via bank wire, whereas Pepperstone clients incur no such withdrawal fees.

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