Forex Club Broker Review

Year Founded: 2005
Locations: Staten Island, New York
Average Spreads: 3-5 pips
Minimum Account Size: $10
Leverage: 100:1
Accepts US Clients: YES
Regulated By: NFA, CFTC
Dealing Desk: YES

Company Overview

Forex Club is a well-established, popular forex broker out of Staten Island, New York. Serving clients from over 50 countries and partnering with worldwide firms such as Dow Jones and Bloomber, Forex Club uses fixed rate commission pricing for all of its trades, even refunding the commission paid if it is not a profitable lot. They charge $0.40 per spread for every $1,000 of currency that is traded. Forex Club is a dealing desk firm and is a registered Futures Commission Merchant.

The firm was recently awarded the Best Broker for Beginners award by forex-ratings.com. They use two kinds of platforms, the ExpressFX platform (to be used by novice forex traders) and the ClassicFX (to be used by veteran forex traders). Forex Club also offers demo and live accounts to prospective clients. They have some of the best educational materials/tools in the industry and provide top-notch analytical support for its customers. You, as a trader, can be trading Forex currencies within one business day of joining the site.

Trading Conditions

Forex Club is a dealing desk firm with quick price quotes for the client. Forex Club has two different trading options. Their newest option is ExpressFX, which has no spreads. Instead, they charge a commission of $0.40 for every 1,000 units of currency traded. This fee is only applicable for trades that yield profits. They also offer ClassicFX, which has spreads but no accompanying commission. This powerful platform allows traders to trade from charts, receive audible alerts when an order is being reached or news is being released, choose from time frames ranging from an entire year to a simple tick. Their spreads range from 3 pips on EUR/USD to 15 on GBP/CAD. There are also demo accounts available to users who need some help with their Forex trading and don’t want to risk any money on their trading prowess quite yet.

All accounts include a pattern recognition software called Autochartist, which utilizes analysis of technical specifications that assist traders in identifying forming trends to help them make sound decisions in the market place. 100:1 is the leverage in the base currency. 50:1 for accounts of $100,000 to $200,000 is the max variant while 20:1 is the minimum variant for accounts above $200,000. Stop orders and limit orders are also offered by Forex Club, however trailing stops are not offered at this time. Forex Club offers 22 currency for trading, and they do have a minimum lot size, which is 0.01.

Education

Forex Club is known for the quality of their educational products. “Forex Insight” is a relatively new training course consisting of online video seminars, email seminars and practice accounts. It is an invaluable source of information about Forex trading for people unaccustomed to what Forex trading consists of. “Forex Insight” also provides a great wealth of information that even the most experienced trader will find useful. Forex Club has pioneered the market of video-based Forex education with subjects covering the essentials of Forex trading to advanced trading strategies. Forex Club’s learning materials have recently won them the “Best Broker for Beginners” award from forex-ratings.com in 2009.

These materials include webinar classes, .pdf teaching, and reading materials. Forex Club also offers six hour-long videos for new users to watch, as well as a forum in which they are able to exchange ideas with Forex Club personnel. One of the more popular learning mechanisms is a user-friendly wizard, which guides new traders through the trading process. Finally, Forex Club has installed a feedback mechanism that put you in contact with the course creators in case you have any question about what you see in the videos. Users even have the opportunity to speak with Dennis Carr, the voice behind the educational materials, in the forums that they offer. Their site provides news from Dow Jones and Bloomberg, an economic calendar, a Forex chart, a daily Forex Market Update news segment and one daily market signals report (courtesy of Autochartist).

Customer Support

The easiest way in which to contact customer support would be with an email form that can be found on the company’s website. Live chat support service is also offered to clients. A representative of Forex Club will be able to assist you with any questions or concerns you might have. Forex Club also has a toll-free phone number, which is 1-800-881-3809 begin_of_the_skype_highlighting              1-800-881-3809      end_of_the_skype_highlighting. Still yet another method of contacting Forex Club is the utilization of the “Request a Call” button. Forex Club will contact the user after they fill out their confirmation code and phone number.

Safety

In order to protect important privacy matters of its clients, encryption standards set aside by the company are met as it relates to orders and accounts. Additionally, in order to make sure that all data is transferred securely, an online safety portal named “My FXClub” is used for all data transfer between the client and Forex Club.

The most recent net adjusted capital figures have Forex Club Financial Company at $21,804,109 (Excess Net Capital $1,804,109). The registered capital of Forex Club Financial Company is $20,000,000. Forex Club is a registered merchant with the Commodity Futures Trading Commission (CFTC) while also holding membership in the National Futures Association (NFA)

dbfx Forex Broker Review

Year Founded: 2006
Location: London
Average Spread: 2 pips
Minimum Account Size: $5,000 USD
Leverage: 100:1
Accepts US Clients: Yes
Regulated By: UKFSA, BaFin
Dealing Desk: Yes

Broker Overview

Deutsche Bank was founded in Frankfurt, Germany in 1870. In 2006, it launched dbfx in order to meet the increasing demands for streamlined access to global currency exchange markets. Now, dbfx trades in more than 82 countries from its London headquarters, claiming the title as the world’s largest FX liquidity provider with a 21% share of the global FX market.

Deutsche Bank has a “Passion to Perform,” which has included providing superior foreign exchange services for individuals, corporations, mutual funds and banks. The dbfx service has the advantage of being backed by the massive financial strength of Deutsche Bank, one of the leading global investment banks in the world. In a “Euromoney” FX poll, Deutsche Bank was named as the #1 favorite “FX Bank for Institutional Markets” for five years in a row (2005 – 2009). In 2009, the “Profit and Loss Digital FX Awards” stated that dbfx had the best retail platform.

Trading Conditions

The dbfx service uses Deutsche Bank’s dealing desk for its foreign exchange; spreads are as low as 1.5 pips, with decimalized pricing for increased profit potential. Clients can trade in 34 currency pairs with typical leverage of 100:1. Either individual or corporate accounts are available, with a minimum balance requirement of $5,000 USD to open. There are no commissions; fees are charged based primarily on the bid/ask spread. Margin trading requirements are based on trading experience. Deutsche Bank provides precise, accurate, real-time foreign currency market information that is reliable due to its time-honored reputation and experience in financial circles. There is an uncomplicated listing procedure for dbfx that makes trades easy-to-complete. Also, managed accounts are available so that customers can link into Deutsche Bank’s superior financial experience.

The different vehicles offered for trading include Web-based, API-based (Order to Go, standard FIX or Java) or platform-based, so that customers can engage in 24-hour trading. The dbfx Web site has special sections for individual traders, introducing brokers, money managers and API developers. There is a free demo trial account with $50,000 USD in virtual money. Customers can deposit money into their dbfx accounts using wire or online transfer. One drawback is the absence of mini accounts. With state-of-the art technology, quality execution, one-click trading, sophisticated forex charts and trading hedges, dbfx offers solid foreign exchange services. Automated trading is also available – charting packages discover key points, the technology bridge links trader to the network and the trade is executed when the conditions are satisfied. Another option is commission-based for high-volume traders. A software development kit is available for API developers.

Education

Online video tutorials are available for new customers who want to learn about foreign currency exchange trading. There are detailed user guides discussing forex basics. Commentary from Thomson’s IFR Forex Watch is also readily available. Select customizable forex charts to better detail market changes. Daily, weekly and monthly research publications keep you on top of the latest market news. Award-winning Deutsche Bank research provides expert analysis on foreign currency exchange, fixed income and commodity markets.

Customer Support

During market hours, there is 24-hour customer support via phone, e-mail and instant messenger in the following languages – Arabic, Chinese, English, French, German, Italian, Japanese, Russian and Spanish. The phone number for customer service is 1-212-710-9000. The e-mail contact is “info@dbfx.com”. The dbfx software is most attuned to benefit large institutional clients with direct lines of credit from Deutsche Bank; small investors might feel like they are being squeezed out.

Safety

Because of its financial backing by Deutsche Bank, which manages the back-end of trades, the dbfx service is considered one of the safest foreign exchange companies. Deutsche Bank gives traders a lot of flexibility, liquidity and safety. Investors can rest assured that their finds will be safe at dbfx with the EUR 1 Billion per depositor guarantee by the Deposit Protection Fund of the Association of German Banks. In 2009, Deutsche Bank had net income of 4,958,000,000 EUR; on December 31, 2009, it had total assets of 1,501,000,000,000 EUR. It employs more than 81,000 people in 76 countries. Its long-term credit rating is very good: Fitch (AA-), Moody’s (Aa1) and Standard & Poor’s (A+). The Deutsche Bank stock is listed on the Frankfurt, London and New York stock exchanges.

The dbfx subsidiary is authorized under German Banking Law and regulated by the following government regulatory agencies:

  • UK Financial Services Authority (FSA)
  • German Federal Financial Supervisory Authority (BaFin)

The registered United Kingdom address:

Winchester House
1 Great Winchester Street
London EC2N 2DB

The German headquarters address:

Taunusanlage
12 60325
Frankfurt am Main, Germany.

CitiFx Forex Broker Review

CitiFx (Pro), a Forex Brokerage Service, by Citibank and Saxo Bank of Denmark

Year founded: 2007
Locations: New York
Average Spread: 2-4 pips
Minimum account size: $10,000
Leverage: 50:1
Accepts US clients: yes
Regulated by: Federal Reserve, OCC
Dealing desk: yes

Broker Overview

CitiFx, an extension of Citi’s forex institution brokerage service, launched in November 2007 in cooperation with Saxo Bank of Denmark, an online bank and a long-time online forex trading provider and a global leader based in Copenhagen, is designed to offer sophisticated individual traders and small institutions the access to the same level of data and trading technology only available to large institutional traders before. Citi had long served the traditional forex market of large institutions and the move to extend its reach to the growing market of active individual and small institution traders is both strategic and natural in terms of leveraging its existing global forex product suite and expanding client base into this emerging client segment.

CitiFx is a U.S. based operation, but also live in Asian markets, as we as available in other selected countries. Trading through CitiFx is totally online, with one platform that comes with three ways, CitiFx Desktop, Web Base, and Mobile Phone. CitiFx has incorporated into its trading platform the popular MetaTader (4) trading interface, which includes technical analysis, charting, and expert advisor programs used to interact with trading actions. Saxo Bank, a pioneer and foremost provider of online forex trading and best know for its SaxoTrader trading platform, brings to the partnership its user-friendly online trading technology and best of class facilitation of product and service delivery. Adapted from Saxo Trader, CitiFx is developed specifically for Citi based on its specifications given its world class product infrastructure. Combining Citi’s global presence in the forex market with Saxo’s proven abilities in online trading support, CitiFx aims at providing both Citi’s better prices and liquidity and Saxo’s tested products and services to a growing audience seeking to trade in the margin forex space.

Trading Conditions

Dealing Desk

As a large, international bank participating in the forex market, Citi runs an active forex trading on its own behalf. While not promising its dealing desk will be free of making any unintentional trades against its customers, CitiFx is committed to following fair trading practices. But sometimes when a dealing desk has information about both its trading positions and the customers’, its trading programs may automatically spike rates a few pips in the broker’s favor, especially when indiscriminately processing order information coming in from both customers and other market counterparts. The accumulation of a few pips in trade execution difference could mean serious profits for a broker and losses for customers. Hopefully, the NFA (National Futures Association) will start documenting the practice and more dealing-desk brokers will make clear distinctions between making their own trades and handling customers’ trades. Moreover, given Citi as a regulated bank with layered audits and compliances, traders should have more confidence that CitiFx will make efforts on fair dealing with its own customers.

Spreads

CitiFx has an average of 2-4 pips for its target bid/ask spreads under normal, non-volatile market conditions on the most actively traded currency pairs. On some less traded and much lower-valued currencies, the spreads can be wildly wide, as high as over 300 basic points (300 pips), such as the 360 target spread for Euro and Russian Ruble. And it’s not unusual to see spreads set around 100 pips for quite some other currency pairs either, for example a spread of 100 pips for U.S. Dollar and Norwegian Krone and 95 for Euro and South African Rand.

So far perceptions about how competitive and liquid CitiFx’s spread pricing is has been mixed. But CitiFx maintains that it can live up to its target spreads as advertised unlike some other brokers that may loosen their tight pricing when executing in live market conditions. Moreover, CitiFx may be able to set narrower spreads for some customers based on their trading volume. Theoretically, customers should be afforded a spread advantage by dealing with a bank that is a direct participant in the underlying interbank forex market. Independent forex brokers that receive their prices from banks and transmit them to clients add another layer of bid/ask spread. It’s the same principle as partly used when choosing a stock broker. Investors get a more competitive pricing from a stock broker that is also a market maker inside the exchanges for certain securities.

Leverage, Account Types, and Number of Currency Pairs

Credit provided by CitiFx to customers has a maximum limit of 50:1 leverage, i.e. 50 times the account equity value, which is definitely not among the highest even when compared to some smaller independent brokers. However, a new rule proposed by CFTC in January this year will try to limit the leverage to only 10:1. The maximum leverage becomes a nominal figure when reduced to arrive at the true or used leverage if one wants to leave enough margin of safety by not taking up all the leverage allowed. In addition, different margins are set for different currency pairs based on how volatile they are. At CitiFx, leverage can go as low as only 12.5:1 with 8% margin on some currency pairs. A leverage of 25:1 with 4% margin is not uncommon even on a few familiar currencies, most noticeably Mexican Peso.

CitiFx offers a total of 138 currency pairs available for trading, which are among the widest set of tradable currencies currently available with any provider, backed by the bank’s vast exposure to currency markets trading worldwide, including some emerging market currencies that other brokers do not allow. Beginners in currency trading may not even recognize the currency codes for some less known currencies. CitiFx is intended for advanced traders and institutions and not a place for forex beginners to practice. And as such, the service does not have a trial or practice account using virtual money as offered by many other brokerages. For anyone new to trading and looking to start small, CitiFx is not an ideal place, as it doesn’t have a mini account. Its standard, regular account requires a minimum deposit of $10,000, a large sum and among the highest required of a forex account holder by brokers, given that a couple of hundred dollars can open an account with some smaller brokers or even a nominal $1 in rare cases. Such a large account size further demonstrates that CitiFx is only for experienced traders.

Education

Some may consider education resources at CitiFx as lacking, but its trading software is to challenge users of advanced levels and not for beginners. CitiFx does not provide basic, entry-level education mostly needed by beginning users, because its trading platform is designed with the high-end traders in mind. Site tutorials are available as guides for account set up. Customers are expected to overcome the software learning curve themselves with the help of a free demo account. But be aware of the expiration date on the demo account, as it may not be available when needed for later uses.

On the other hand however, CitiFx provides clients access to the most cutting-edge research analysis and market commentary backed by Citi’s massive operational structures. Information about developments in the currency and other related markets and the economic events behind them is being streamed 24 hours directly onto the trading platform to allow traders to make the most informed trading decisions in real time.

Customer Support

Customer service at CitiFx is considered a major advantage by both many users and the company itself. CitiFx offers during the 5 trading days a 24-hour customer service via telephone on both trading and administrative needs, though there is no online live chat unless you have an instant messenger account already set up. Email support is also available with a response time within 24 hours and the old-fashioned fax is still in use. All in all, users of CitiFx can expect excellent customer service simply because of the size and history of the parent company that runs it.

Safety

In the U.S., forex markets and brokers are regulated by CFTC (Commodity Futures Trading Commission) and NFA (National Futures Association), an industry self-regulatory organization, which requires mandatory membership of all forex brokers. Retail forex trading and online brokerage service are of special attention to forex regulators. Regulated by the Federal Reserve and the OCC (Office of the Comptroller of the Currency), Citibank is in a better position to ensure regulatory compliance at CitiFx, especially when it comes to maintaining a sufficient amount of funds to meet their customers’ needs. Excess capital concerns about CitiFx, if any, should be rightly addressed by the full backing of its parent bank.

Brokers can go bankrupt from time to time, not by servicing customers and collecting commissions but when they start trading the market themselves by becoming dealers. The failures of Bear Stearns and Lehman Brothers make such a proposition unarguable. Therefore, customers do risk losing deposits they place with their forex brokers. As a FDIC insured bank, Citi offers the same level of FDIC deposit insurance on funds under a CitiFx U.S. dollar account, which is currently at $250,000 per account holder until December 31, 20013 and $100,000 thereafter.