DMM FX Review by professional Forex trading experts the “ForexSQ” FX trading team, Finding out everything you need to know about the broker is in this DMM FX Review.
DMM FX Review
DMM FX offers its clients just one live account type, Standard. Of course, a free Demo account is also available, which is always appreciated by newbies.
The company behind the DMM FX brand is a part of the Japanese conglomerate DMM. The DMM Group is a global provider of online trading services. Its members are regulated by the Australian Securities and Investments Commission (ASIC) in Australia and the Financial Services Agency (FSA) in Japan. DMM FX has access to the DMM Group’s large network of liquidity providers (including global banks, financial institutions and other market makers).
DMM FX offers trading in currency pairs and various CFDs under reasonable trading conditions through the industry’s standard MT4. The broker no longer provides binary options trading accounts and services, as of November 21, 2015.
Security of Funds
DMM FX Australia Pty Limited, operating under the DMM FX brand, is an online trading company offering clients the opportunity to trade in over-the-counter (OTC) derivatives. The company holds an Australian Financial Services License and is regulated by the Australian Securities and Investment Commission (ASIC). ASIC requires licensed financial services providers to meet certain capital requirements and to comply with various rules. As for the minimum capital requirement, Australian regulator requires forex brokers to hold at least $ 1 million in order to provide financial services legitimately. In comparison, the US regulatory authority NFA requires forex brokers to possess a minimum of 20 million, UK’s FCA – 730 000 EUR and Cyprus’ CySec – 1 000 000 EUR.
Unlike many EU-based brokers, Australian ones are not covered by any compensation scheme. FCA-regulated brokerages, for example, fall under Financial Services Compensation Scheme (FSCS), which protects consumers up to £50,000 per person per company.
Despite the regulation and the requirements set to brokers, one should be aware of the risks of trading Margin FX and CFDs. Returns and gains are not guaranteed. ASIC, the Australian Government nor any other person guarantees any funds in your account.
For more ASIC-regulated brokers, click here.
Minimum Initial Deposit
Traders are required to deposit $200 in order to open an account with DMM FX, which is an average initial amount. In comparison, ASIC-regulated XM requires $5 and FOREX.com – $250 for its Mini account.
Average Spreads & Commissions
DMM FX is a fixed spread forex broker, offering competitive spreads on its commission-free account, amounting to 0.7 pips on EUR/USD and 0.5 pips on USD/JPY. This is considerable lower than the typical spread that we find other brokers are quoting which is about 1.5 pips.
In comparison, ASIC-regulated Plus500 also offers fixed spreads of 2 pips on the EUR/USD and charges no commission.
DMM FX has announced in a press release that it introduces new, higher spreads, as of February 22, 2016, amounting to 1.7 pips on EUR/USD. In return, the broker adds negative balance protection and waives withdrawal fees for high-volume traders.
Clients of DMM FX are able to choose leverage ratios from 1:1 to 1:600 and such maximum leverage level is considered high. Some jurisdictions set limitations on leverage, which are significantly lower than this, i.e. 1:50 in the US. Most brokers usually offer leverage of up to 1:200 or 1:400, for instance global broker FXCM, also holding an ASIC license, provides leverage up to 1:400; forex.com – up to 1:200 as regards clients outside the US. However, many brokers provide leverage ratios exceeding 1:500, for instance XM offers leverage up to 1:888.
Traders should keep in mind that higher leverage involves higher risk, not only the probability of multiplied profits earned on a small deposit. It is a double-edged sword.
DMM FX offers just one trading platform, the most popular MetaTrader 4, available as desktop, web and mobile versions. MT4 provides all the tools and resources a trader needs: a number of technical indicators, extensive back-testing environment and advanced charting package. However, the broker warns that Expert Advisers (EAs) are not supported and many traders may be disappointed as EAs allow full automatization of trades. Or, to put it simply, via EAs traders may sit back and let the program do all the work.
Here is a list of more forex brokers offering MT4 platform.
Negative Balance Protection
The broker announced in a press release that Negative Balance Protection will be introduced to all clients as of February 22, 2016.
This means that accounts will be brought to a zero balance if it goes into negative as a result of the fast-pacing volatile market and DMM FX’s clients will not lose more money than they have deposited.
Bonuses and Promotions
This broker offers its clients a variety of promotions:
– $50 welcome no bonus for 7 calendar days;
– On deposit bonus of 100% (up to $500) and subsequent of 30% (up to $30000);
– Loyalty rewards.
Methods of Payment
DMM FX offers its clients a variety of deposit/withdrawal methods: via credit/debit card, wire transfer, BPAY, POLipay, FasaPay, Neteller, Skrill, China UnionPay.
What is more, all withdrawal fees are waived for transactions of 1000 base account currency units and above, as of February 8, 2016. There are no deposit fees.
Being part of DMM Group, DMM FX is a reliable broker, offering competitive trading conditions for trading in currency pairs and CFDs.
Instead of the forex broker you can use Plus500, XM, eToro, Fxpro or AvaTrade forex brokers.
DMM FX Review Conclusion
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