Investing > OctaFX Review

OctaFX Review

OctaFX is favored for its large asset offering at competitive fees and two major platform suites — MetaTrader and cTrader.

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OctaFX is a well established forex and CFD broker that has undergone some serious global growth over the past few years.

The firm has expanded its reach successfully with its combination of low fees, responsive customer support, and advanced technology. Today, the firm serves customers across 100 countries, and has opened up around 300,000 accounts with an impressive daily volume of $4bn.

Interested in learning all you possibly can about OctaFX? Let’s dive in.

OctaFX offers low fees, highly responsive customer service, advanced technology and copy-trading. The firm operates across more than 100 different countries and has consistently shown its commitment towards meeting its customers’ needs and building customer relationships.

Fast Facts

  • Demo Account: Yes
  • Account Minimum: $5 for Micro Account
  • Regulation: CySec (Cyprus) and the FCA (UK)
  • Best for: All levels
  • Asset Coverage: Forex, cryptocurrency, CFDs, metals, energies and indices. 

Ratings

  • Commissions & Fees: 7/10
  • Investment Selection: 6/10
  • Account Options & Features: 6/10
  • Usability: 8/10
  • Educational Resources: 6/10
  • Customer Service: 9/10
  • Overall: 7.5/10
Visit OctaFX on OctaFX’s website

What is OctaFX?

OctaFX is registered in Saint Vincent and the Grenadines, in the Caribbean, and although this is a well known tax haven that would generally induce cause for concern, OctaFX is regulated by the FCA in the UK and is mentioned on the FCA website.

It should be noted that traders in the US are restricted from opening an account with OctaFX due to strict US regulations enforced by the CFTC and NFA.

But is this enough to prove OctaFX is a worthwhile broker? In this review you will discover: 

  • Whether OctaFX is safe and regulated
  • Exactly what  it offers and what kind of experience you can expect
  • Where the broker could improve 
  • Answers to some of your most asked questions

Pros

  • CFD on bitcoin available
  • Offers access to MetaTrader and cTrader platform suites
  • Offers both MetaTrader and cTrader platform suites

Cons

  • CTraders provides access to forex and metals only
  • Arbitrage strategies are prohibited
  • Current market price is set at its sole discretion

 

Is OctaFX Safe?

Regulation is one of the most important factors to consider when looking at forex brokers. A highly regulated broker will offer you more protection and safeguard you from fraudulent behaviour, or in the case of insolvency.

Before signing up to any broker, check out who it is regulated by and make sure you fully understand how these regulations serve to protect your money. Some brokers are more regulated than others, and this will largely depend on where the company is based.

So, where does OctaFX fit on this scale?

Firstly, OctaFX has a subsidiary entity based in Cyprus. This is regulated by the concerned authority in Cyprus, the Cyprus Securities and Exchange Commission (CySec).

Picture of Cyprus Securities and Exchange Commission logo
OctaFX is regulated by the Cyprus Securities and Exchange Commission

Their license number is 372/18. This means that OctaFX is held responsible for CySec regulations in this jurisdiction.

CySec Regulations and What This Means

As OctaFX is regulated by CySec, the firm is authorized to offer its services to customers in EU member states. This is because European forex laws allow brokers that are licensed in a country within the EU to service clients anywhere within the European Union.

How does this service you, you wonder?

In order for a broker to become licensed by CySec it needs to pass some rigorous tests, in addition to complying with regulations, and undergoing monitoring on a continuous basis to ensure compliance.

Essentially, an CySec regulated broker will be put through the following checks:

Investor Compensation

The broker is required to contribute towards a shared investor protection fund. This fund will be there to protect all accounts that hold $20,000 or more in the event of insolvency.

Advertising Rules

Firms must comply with a number of rules on how they can advertise services to customers. Such restrictions include the offering of bonuses etc.

Capital Requirements

Brokers are required to meet minimum capital requirements. These requirements can be seen as buffer funds and they must be substantial.

Although all of the above will work to help protect your funds, issues do still arise. Should any arise for you then you can feel safe in the knowledge that you can go to CySec and report any complaints through its self reporting portal.

In addition to being regulated by CySEC, OctaFX is a member of the FCA, the concerned authority in the UK. In order for firms to become and stay classed as a registered members of the FCA firms must comply with some of the strictest regulations in the world.

Segregated Accounts

In addition to the above mentioned, OctaFX uses segregated funds to protect clients money. This is a key requirement to look for in a broker because it means that your funds will be kept separately to the brokers.

In other words, the broker cannot use your money for the purposes of its own operations and if anything happens to the company, your funds would be safe. It also means that all withdrawals requests can be instantly met without any kind of liquidity crunch.

Can You Trust OctaFX? 

OctaFX has an excellent reputation in the financial industry. The firm is committed to ensuring customers needs are met and prioritizes customer satisfaction. Many third party sites highlight the company’s continuous pursuit towards addressing customer issues through its wide range of accessible online forums.

 It is rare to find a company with such a commitment towards its customer relations when many firms are accused of being purely for profit. OctaFX has a reputation for being proactive in satisfying customer issues by coming to a reasonable solution.

That said, the firm is not publicly trading and does not operate a bank. Therefore, we encourage anyone considering OctaFX to do your own additional research to determine whether you are happy with the standards offered.

Offering of Investments

OctaFX provides twenty-eight currency pairs, 3 cryptocurrency CFDs, and CFDs on 4 metals, 2 energies, ten of the most popular indices, adding to 47 instruments in total.

Screenshot of OctaFX homepage
OctaFX offers a large selection of investment products.

Those looking for better asset coverage should check out CMC Markets wide range of over 10,000 assets waiting for you.

Assets & Leverage

OctaFX’s asset range is pretty standard and includes Forex, Commodities, Equities and Cryptocurrencies. The assets themselves however have pretty low coverage.

In terms of forex, a number of minor forex crosses are not offered. The majority of emerging market currencies are not included. When looking at equities, only indices are offered with no option of single stocks, and only Gold and Silver are available in commodities, on a micro account.

For Crypto OctaFX only offers 3 currency pairs. These are Bitcoin (BTC), Litecoin (LTC) and Ethereum (ETH). 

However, OctaFX’s lack of asset coverage is potentially made up for in leverage.

Leverage

As OctaFX is a CFD broker, you will be trading on margin and using leverage. This will mean that although your gains will be higher, unfortunately your losses will be too, due to the leverage.

The amount of leverage provided by OctaFX will depend on the account type you have as well as the particular asset you are trading. There is a maximum leverage of 1:5000 that is accessible through the currency pairs, as well as a leverage of 1:2000 for metals and 1:50 for indices.

The leverage on the cryptocurrency assets is not as high. A maximum leverage of 1:2 is offered on these pairs which might be disappointing for some. 

Leverage Protection

That said, OctaFX does offer traders negative balance protection. This will help protect you from losing more money that you have in your account.

Copy Trading

In 2018, OctaFX launched a copy-trading feature to entice more traders to the market, helping increase profit and offer different fund management options.

Screenshot of OctaFX copytrading page
If you are into copy-trading, then the OctaFX platform has some good copy-trading features to offer.

Beginners can utilize the “Copiers” section, while traders who are confident in their skills and interested in making some extra money on the side can become a “Master Trader by creating a profile, outlining your strategy and setting a commission price for any copiers. This profile aggregates professional traders’ performance, displaying it to the public and letting them promote it.

Master traders can create multiple accounts for different strategies. OctaFX analyzes master traders’ investment history in addition to other key statistics to help ensure the best experience for any copiers. OctaFX clients can also monitor manster traders activity in real-time, compare strategies with other traders and sign up quickly and easily.

Master Traders will receive payment from their Copiers every week, on Mondays at 12am. Copiers will be charged commission the moment a trade is opened, and you will receive the commission through a special Wallet.

Screenshot of OctaFX website  with a copytrading page selected
If you are using unique trading strategies, you can share them via the OctaFX platform and earn money.

Spreads and Fees

From this Wallet, you can transfer it to any of your trading accounts. Or alternatively, you can withdraw it if you wish.

One of the most important factors to take into consideration when using leverage is the asset spreads, in addition to other fees that may apply.

Overall, OctaFX has low spreads when compared with similar brokers. Most major forex pairs have spreads close to zero, particularly on the ECN account. Apart from this, there is also no slippage or re-quotes.

Exact spreads and commissions will vary depending on the account type you hold. Traders can choose between MT4 Micro, MT5 Pro, or the cTrader ECN account.

OctaFX spreads are higher on the MT4 account with only 37 tradable instruments on offer. A typical spread for the EUR/USD currency pair is stated as 1.1 pips, while the MT5 Pro account provides the complete range of tradable products, with slightly lower spreads of 0.9 pips.

In comparison to its other account types, the cTrader ECN account at OctaFX offers a more restricted product range with just 28 forex pairs, 2 metals, and a $3 per side standard lot commission-based fee structure, which is in addition to typical spreads of 0.3 pips, bringing the total cost to 0.9 pips.

Therefore, traders looking for the best fees in addition to more tradable instruments should consider the MT5 pro account.

Introducing Lower Spreads 

To help support traders currently impacted by COVID-19 across the world, OctaFX is reducing spreads to enable higher profits.

To take advantage of these spreads simply enter MetaTrader4 and get spreads up to 14 points with no time limits.

Screenshot of OctaFX website Lower Spreads promotional banner with a Start Trading button
OctaFX are lowering spreads on currency pairs by up to 14 points to help support traders

Reductions on spreads of up to 14 points include the following currency pairs; EUR/USD, GBP/USD, USD/JPY, NZD/USD, USD/CHF, and USD/CAD as well as EUR/AUD, EUR/GBP, GBP/JPY, GBP/CAD, NZD/JPY, among others.

Account Types

As mentioned briefly above, OctaFX offers 3 main account types. The account type will determine which platform you trade with, as well as the fees charged.

Screenshot of OctaFX website account selection page
OctaFX offers 3 account types: Micro, Pro, and ECN

Let’s begin at the entry-level, the Micro Account.  This account is run on the MT4 platform and offers the lower minimum deposit amount at just $100.

Secondly, we have the Pro Account which uses the more advanced MT5 platform. This account offers lower spreads than the Micro Account as well as lower trading costs for higher volume traders. You will pay a slightly higher minimum deposit to avail of this account.

Lastly, you can choose the ECN account which uses the OctaFX cTrader platform. This platform allows for STP and the lowest execution latency. That said, keep an eye out for higher commission with these accounts.

We would also like to point out that all accounts come with a minimum lot size of 0.01 with no maximum lot size.

Furthermore, hedging is allowed, you can also use scalping techniques, in addition to your own EA on each account.

Islamic Account

OctaFX does have a reputation in the financial industry for offering one of the best Islami accounts. The firm’s accounts are Shariah-compliant and no interest will be charged on overnight positions.

Screenshot of OctaFX islamic account opening page
The OctaFX platform comes with excellent offerings for their Islamic clients.

The Islamic account can be accessed through all of OctaFX’s trading accounts mentioned above. The only thing you will need to do is check the “Swap-Free” box during the initial account sign up stage.

To see the commission that you will pay on a particular Islamic compliant trade OctaFX offers a tool to calculate the commission on MetaTrader 4, MetaTrader 5 and the eTrader platforms.

What’s Special About OctaFX Trading Accounts

We’ve gone through the basics, but now we want to highlight what makes OctaFX accounts different from the rest. First off, OctaFX offers an ECN account for as low as a $5 initial deposit, making it one of the very few brokers to offer this. This low initial deposit of $5 will qualify you for either the MT4 Micro account or the cTrader ECN account.

Both are primary platforms with OctaFX and are the most popular platforms with traders in the FX market.

While MT4 is the most popular out of the two platforms, the cTrader platform does offer more advanced features that are particularly suited to retail and institutional traders. cTrader platforms are more suited to the ECN platform, which basically lowers spreads to almost 0, not including the commission rate per trade.

The third account type, the MT4 ECN account, does require a slightly higher initial deposit of $50, but this is significantly less than some other competitors that require a minimum of $1000 or in some cases even $5000 to sign up to an ECN account.

OctaFX really stands out with its leverage of 1:500, an enormously high amount for trading in the Forex market. This high leverage does make it especially risky for traders on the cTrader platform, as the minimum position required is 1000.

Traders looking to invest the $5 can significantly induce a margin call where the price moves against a position, bearing in mind that the market can be extremely volatile and swings are common with currency pairs such as EUR/JPY and GBP/USD. Even smaller losses like 10 pips can result in an extremely negative impact on an account, making high leverage unsuitable for all traders.

As mentioned, OctaFX offers very competitive spreads and with the new rates due to the current COVID-19 epidemic, rates will be even better on all 3 accounts.

How Can I Deposit & Withdraw Money? Do I Get An OctaFX Bonus?

Traders will be relieved to know that no fees for withdrawals or deposits are charged by OctaFX and fees incurred by its payment processors are covered. 

As OctaFX is a large broker, it fittingly offers a good range of funding options on both the fiat money side and the crypto side.

In terms of deposits on the fiat side, traders can pay in either USD or EUR. Traders looking to deposit into a USD account in EUR will get the closest market rate possible on this pair.

Payment can be taken viy any major credit card, through e-wallet or bank wires / deposits.

The fast method of funding an account for international clients is perhaps a credit card, Bitcoin, Neteller or Skrill. However, those based in Indonesia should consider using the local banking institutions including BCA, Mandiri and BNI?

Those considering a local bank payment will have 3 options available to you. You can either make payment through an online transfer, with an ATM, or using a standard bank account deposit. Payments may take up to 3 days to land in your bank account.

Pro Tip: To speed up your transfer you can send OctaFX proof of payment.

Withdrawals

Withdrawals can be done simply by just heading to the “withdraw” section in your account. Before you can request to withdraw though, your free margin must exceed the amount you are looking to withdraw.

Once your margin exceeds this amount, your request will be processed in only 1 – 3 hours. It’s good to note that the withdrawals will be returned through the same method that the funding was deposited.

For credit card funding, the initial deposit amount will be refunded. Any profits that exceed this funding level will need to be received through an alternate method like bank wire or e-wallet.

Bonuses 

This initial deposit will also be eligible for an OCtaFX bonus of 50%. If $50 is deposited then you will receive half of the initial deposit as a bonus to your funds. 

Screenshot of OctaFX Bonuses promotional banner
Traders should consider all of the terms and conditions that come with OctaFX’s bonus deposit

This is quite surprising considering bonuses have been recently made illegal in Europe prompting regulatory bodies including CySec to restrict brokers from offering them. This could mean that the bonuses are only available to traders in particular jurisdictions.

The downside here, even if you are in a jurisdiction that allows you to receive this bonus, is that there are a lot of terms and criteria that need to be met to receive this that could make it simply infeasible to accept. 

Screenshot of OctaFX Bonuses promotional banner
OctaFX offers advice on how to manage your bonus in the best way

So, don’t get too ahead of yourself. Although a 50% bonus sounds appealing, please note that the deposit bonus cannot be withdrawn until the minimum amount of lots have been traded. The lot number will be determined in the following way: (bonus amount) / 2 (bonus amount divided by 2).

Should You Accept the Bonus?

We don’t recommend traders accept it if they plan on making a withdrawal before all of the terms and conditions are reached. Overall, we recommend you avoid it. Although receiving some free money is quite enticing and almost irresistible, they exist to entice traders to trade more aggressively to help meet targets that could erode any profit made.

OctaFX Demo Account

Wouldn’t you rather avoid the risk first?

Before risking your money, why not try OctaFX’s platform risk-free in a similar, virtual trading environment by signing up for a demo account. This will give you unlimited access to every trading account free of charge. You can top up your funds with a simple request while you practice and improve your trading strategies.

Screenshot of OctaFX Demo Account opening page
OctaFX holds a range of trading competitions.

Another exciting aspect about OctaFX’s demo platforms is the sheer range of trading competitions. Some of these include the Champion demo contest and the Weekly cTrader demo contest

Each competition has real prize money up for grabs. For example, the winner of the Champion demo contest will win $1,000 which will be credited to your account. The weekly cTrader competition is a draw with a prize of $400 for the lucky winner.

How to Join the Next Round

  1.  Log in or sign up to OctaFX
  2.  Open a cTrader Weekly Demo Contest account
  3.  Download the cTrader trading platform, or alternatively you can use the browser version
  4.  Wait until the next date displayed on the OctaFX website and start trading on cTrader using your contest account.
  5.  The trader with the highest balance wins a prize.

Platforms & Tools

As you’ll have gathered by now, OctaFX is mainly a MetaTrader broker, offering traders an impressive selection of online and computer based platforms, including the full suite of platforms from MetaQuotes SoftWare Corporation, such as MetaTrade 4 and MetaTrader 5.

The MT4 and MT5 are standard with only slight variations between firms, the functionalities can be significantly different in addition to spreads, fees, and other tools, features and admin areas.

MetaTrader 4

This is most likely the most well-known trading platform out there and is very popular with traders around the world.

This platform is developed by Metaquotes. It was essentially developed by traders for traders and includes a plethora of charts and tools.

Picture of a notebook running the OctaFX trading app
The OctaFX MT4 platform comes with a well-designed user interface.

For example, it includes advanced order forms where the parameters can be set around positions. There are also numerous technical analysis indicators and studies.

Along with this you can code trading algorithms and bots through their MQL4 programming language. Traders can use this platform in 3 ways. Either through the web browser, on a computer, and/or on mobile either on iOS or Android.

The most efficient experience is provided by the computer platform as it offers the most tools and functions.

MetaTrader 5

Traders looking at the pro account will have access to the slightly more advanced MT5 platform. The layout for this is different to the MT4 platform so there will be a slight learning curve.

However, this offers a range of new features all packed into it neatly. These include charts and economic calendars.

With this, traders will have much more functions in terms of coding your Expert Advisors as it uses a coding language called MQ5. It also offers one click trading.

Like the MT4 platform, this platform allows you to trade on a computer, and mobile, either on iOS or Android.

cTrader

The cTrader platform will give you STP access and offers some of the tightest spreads in the market. cTrader is quite sophisticated and allows access to a host of different features. For example, traders will get level 2 quotes in addition to access to the FIX API. The orders are also processed a lot quickly with no order queues.

The interface on cTrader is much more functional than the other two which enables a high amount of customization such as up to 28 chart timeframes and creating and saving chart templates.

Any heavy technical analysts out there can create customizable charting indicators through the developer network. Of course, you may not need to do this at all consider the fact there’s over 70 different indicators already on the platform.

But what good is advanced technical analysis without the ability to customize orders? The cTrader platform lets you set stop-losses and scale out at a few different levels. You’ll also have access to a host of risk management features that enable you to diversify our exposure throughout a range of asset classes. 

Lastly, anyone looking for an automated trading strategy can utilize the cTrader automate to help you develop custom robots. This has an extensive baak-testing capability with its suite of tools.

This can be downloaded to your computer, used through a browser or on your mobile phone. 

OctaFX App

The OctaFX app is quite impressive. To begin, the firm has its own proprietary app that allows you to create trading accounts, fund these accounts and modify the leverage as well as other trading parameters. Users can also keep an eye on trading history and statistics.

Picture of OctaFX mobile app
OctaFX’s mobile trading app is available on Android and iOS

The app is available on Android and iOS for MetaTrader and cTrader platforms through iTunes and Google Play where it has very high reviews. Not only this, but the OctaFX team follows up with reviewers.

They take suggestions into account and seem to have acted on the suggestion numerous times. This is one way the team works tirelessly to build its customer relationships.

So, mobile vs computer, which should you use?

We would advise you to stick to the web-based version for more advanced options and a better experience.

Research & News

OctaFX  offers a good range of research tools and content under the Traders Tools section, including market insights, an economic calendar and daily analysis posts not to mention trading signals from AutoChartist. The firm is committed to creating ongoing video content such as Market in a Minute posts everyday on Youtube, and has selection of webinars and educational content to help improve your trading techniques and strategies.

The firm has a good basis for its research offering due to the fact it offers a bit of all main content types including some from third party providers.

Customer Support

For traders relying on some support throughout their trading journey, finding a good support team will be crucial to your experience.

Screenshot of OctaFX customer service page
The customer support team boasts a 96% customer satisfaction rate and quick response times.

OctaFX’s customer support is available 24 hours a day, 5 days a week. They can be reached on live chat for some quick-fire questions, or more complex questions can be sent to the phone or email team.

The phone contact are as follows:

  • United Kingdom: +44 20 3322 1059
  • Hong Kong: +852 5808 8865
  • Indonesia: +62 21 3110 6972
  • WhatsApp (Texts only) +34 605 122 333

OctaFX boasts an average of 7 seconds to respond and 3 minutes to find a solution to clients’ issues or answer their queries. This has greatly contributed towards the team’s 96% customer satisfaction rate.

In addition to this, the customer support team is multilingual, offering support in languages including English, Malay, Indonesian, Thai, Hindi and Urdu.

If you need some support outside of the hours or would prefer to get a quick answer yourself then there is an FAQ’s page with a range of relevant questions and answers. Though, if possible, seen as the team is so quick and efficient you might be better off just reaching out to them first thing.

Education

Traders looking to add to their knowledge base will be happy to hear that OctaFX has a whole host of educational materials and resources available, covering forex basics, video tutorials, instructions, a large glossary of terms and their meanings, and an FAQs section.

The best part is that most of the content is free of charged and can be viewed on the firm’s website. So, if you’re a beginner, why not give yourself a leg up before going head first into the world of trading? Let us give you a more in depth look at what awaits you.

Forex Basics

This section holds some introductory articles to forex trading that are most suitable for traders at a beginner to intermediate level. This section is nicely laid out and covers some of the more important aspects of forex trading.

Picture explaining the way the OctaFX brokers operate
An example of the helpful imagery used in OctaFX’s guides

Some topics include, risk management, trading strategies, and technical and fundamental analysis. Each guide is informative and comprehensive. New traders might enjoy the firm’s Introduction to the Forex Market as their first read.

All guides not only go through complex theories in a simplified way, they’re packed with images to help you understand and process everything a bit better. The guides are all relatively easy to follow and each tells you how long it should take to read before clicking in – very helpful to know that most are only a 2 – 6 minute read, what have you got to lose?

Video Tutorials

If you enjoy the imagery in the forex basics section then you’ll probably enjoy the videos provided too that will guide you through your MT4 account set up. These tutorials are for both the computer version and mobile app. Another video will take you step by step through your account section. These include both on the PC version as well as the mobile apps.

All videos are well produced and clear. 

Glossary & Manuals

Although trading glossaries are pretty standard among forex brokers, they’re highly useful. OctaFX’s glossary shows pages of terms and their explanations all laid out in alphabetical order. For more in-depth explanations, you can take a look at their comprehensive manuals, covering the interface, EAs, charts, signals, and Autochartist.

Where OctaFX Could Improve

We couldn’t leave this review without highlighting some areas where the broker could improve.

Firstly, the broker doesn’t offer the best range of asset coverage. The major forex pairs are offered, yes, but almost no emerging markets are. No stocks are offered, only 2 commodity assets, and 2 cryptocurrencies. Traders looking for a better range of assets should consider CMC Markets or IG.

Secondly, when looking at the cryptocurrency assets, the leverage offered is pretty low, at 2:1. This is one of the lowest leverages on offer. It’s also worth highlighting that those using the cTrader platform will not have access to cryptocurrency trading. So if you are looking to trade crypto on the cTrader platform then you should rethink your plan.

Finally, OctaFX cannot accept clients from certain regions including the US. If you are in one of these regions then you should take a look at our guide on the Best Forex Brokers and Platforms and find another broker to suit.

Final Thoughts

Overall, OctaFX is an impressive broker. It offers competitive fees, low spreads, advanced technology and all on a global scale.

The firm also offers one of the most responsive and knowledgeable customer support teams and an informative and clear educational section. The copy trading section also gives them an added step up. 

Although we have highlighted some areas the broker could improve, it’s nothing major that OctaFX couldn’t easily sort, and considering the fact that the company has repeatedly shown its commitment towards building customer relationships and acting on constructive criticism offered, these suggestions might just get implemented.

So, is OctaFX the broker for you?

As always, we encourage you to research whether OctaFX is ideal for your individual preferences and needs. Having said this, this broker should probably be top of your list of considerations.

A Short Guide To Your Most Asked Forex Questions

In this guide we’re going to quickly go through some of your most frequently asked questions to help you make more informed decisions.

Is Forex Trading Illegal?

One of the most common myths people think is that the Forex market is banned in the US. This is not true, although the forex market is very strictly regulated to help protect customers money from fraud or in the event of insolvency.

How Much Do I Need to Start Forex Trading?

The foreign exchange market is the most accessible financial market and is one of the reasons it’s so popular. Generally, brokers require an initial minimum deposit of $100 to start trading while some others only require $50 or less.

Is Forex Trading Really Gambling?

Sometimes, forex trading can be referred to as gambling and while there is always risk involved in trading due to the volatility of markets, the most successful traders are informed and educated on the market but most importantly they strategize. That said, with no risk comes no reward.

Is Forex Trading Safe?

Generally, the Forex market is safe because it is regulated. However, due to the global scale of the market, there is no one authority that can monitor it.

As such, it is divided up into different jurisdictions, each with their own regulatory body, enforcing its own guidelines and regulations. This means the protection offered to you will depend on where the broker is based and who it is regulated by.

Why Do Brokers Allow Short Selling?

Often, traders can sell a security “short” in the hopes of making a profit from a currency pair that is declining in price. This is a speculative strategy and it can leave you vulnerable to unlimited risk.

However, brokers allow short-selling because of its necessity: Most speculative strategies are the inverse of a defensive strategy and it is not possible to have one without the other.

Is Forex a Good Investment?

Forex can be a good investment when compared to other investments such as stocks. Forex traders have the advantage of using leverage which means they do not need too much to start trading in order to make a profit.

However, the market can be extremely volatile as we can see now due to the impact of the Coronavirus (COVID-19) which makes finding the right broker a crucial part of your success.

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