Reasons to switch your Forex Broker

Key questions you should be asking your FX broker

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1) Are your FX providers headline spreads typical and transparent?

While minimum spreads can grab the headlines, they don't tell the whole story. Markets can be volatile and the underlying market spreads can fluctuate and widen throughout the day. At CMC Markets we believe it is important that FX providers should be more transparent and that they should publish their daily typical spreads as well as their minimum spreads. Consistent daily typical spreads are a reflection of pricing consistency throughout the day. Click here to find two tables showing CMC Markets’ most popular typical spreads over the last week. If your FX provider does not show this information you should ask them why.

2) Who executes your trades?

With CMC Markets, all our trades are 100% automated on our Next Generation platform, which means no dealer intervention and fast processing. With multiple price streams from top-tier banks, we offer highly competitive prices and with our 100% automated execution, you have none of the hassles or restrictions that come when trying to trade quickly on news events or economic announcements.

3) Are you receiving fractional pip pricing?

Currency pairs are generally quoted to four decimal places (two decimals when trading the Japanese yen). The underlying Interbank market however offers additional precision within their price quotes meaning many brokers round these to the nearest pip, widening the spread in the process. CMC Markets offers precision pricing and quotes an additional decimal place on all our FX pairs enabling us to offer tighter spreads.
Precision pricing can increase your trading opportunities, prevent unnecessary stop loss execution and help you save money.

4) Have you got access to fractional trading?

Traditionally, the minimum trade size for any FX trade is US$10,000 or equivalent. With CMC Markets’ Next Generation CFD trading accounts you can now trade from as little as US$1 with our fractional trading feature. For new traders this gives you the ability to trade FX with smaller trade sizes so you can get used to this exciting market before placing larger trades.

5) Has your FX provider got a strong history in FX?

CMC Markets started as an FX broker back in 1989 with an ambition to offer wholesale FX trading to the retail market. In 1996 we developed the world’s first online retail foreign exchange trading platform and have been one of the market leaders ever since. With our new lower spreads and margins we believe we now take this evolution to another level, offering some of the tightest spreads to the retail market.

As one of the bigger and more established FX providers, we have access to some of the best prices and execution from the large institutions that control the Interbank market where the majority of currency trading is performed. We pass on this benefit to our customers in the form of some of the tightest spreads in the market.

6) Does your FX provider offer positive carrying costs?

Not all FX providers pay positive carry rates on FX positions held overnight (past 5pm New York time). Therefore, if you are holding a higher yielding currency pair you would miss out on this interest. With CMC Markets you will receive interest when holding a higher yielding currency and you’ll pay interest when holding a lower yielding currency.

7) Are you able to access support 24 hours a day?

We are available 24 hours a day from Sunday 9pm through to Friday 10pm, and Saturday 9am to 5pm GMT/BST. We take great pride in our standards of service, yet we are constantly working to improve them to make sure they match your expectations and reflect a world-class offering.

8) What risk management tools does your provider offer?

Trading FX on low margins can be risky in volatile markets and you could lose more than your initial deposit. To help you manage some of these risks CMC Markets offers a wide range of risk management initiatives.

Order tickets automatically suggest a stop loss equal to your margin requirement for each trade (this feature can be turned off in the preferences section). This feature is known as Transaction Based Stop Loss and it constantly reminds you that stop losses can help to enhance your FX trading and can helping to limit the downside risk associated with a trade. There are order types to enter the market, including Limit and Market order, as well as Trailing Stops and Take Profit orders to exit. CMC Markets offers a full range of order execution tools.

We have also built in as a courtesy two risk notification level:

• The first notifies you when your account value falls to 50% of your margin requirement and suggests you might want to deposit additional funds or close out of some of your trades.
• The second notification occurs at the close out level at which the platform may liquidate your position to protect both you and CMC Markets, as no one wants your account into a debit balance. It’s up to you to monitor your positions. To prevent the liquidation of your positions, make sure you’ve deposited enough funds to keep your account value above the close out level. If your trade doesn’t go as you expect, you may be required to deposit additional funds with CMC Markets in order to hold your position.

Please remember that this notification is only provided as a courtesy and you must not rely on it as it is your obligation to monitor your account.