FXOpen’s website (fxopen.com) is quite easy to use and looks very attractive. I thought I found a diamond in the rough when I started this review, but as I delved further, I realised that FXOpen is not a good broker.
FXOpen is a forex broker that offers some very attractive trading conditions. However, it’s an unregulated and unlicensed broker. In my FXOpen review, I have discussed all the technical details of this broker, so let’s begin:
FXOpen License and Regulation
There are two branches of the FXOpen brand. One is FXOpen Ltd which hold a license from FCA. The second one, which I’m reviewing in this article is FXOpen whose parent company is FXOpen Markets Limited.
FXOpen Markets Limited is based in Nevis in the Carribean pool, an offshore region. This broker is a part of the Financial Commission an independent dispute resolution organization. However, the Financial Commission is not a regulatory authority so even though it has a €20,000 compensation policy for resolving disputes between brokers and their users, it is not sufficient to be their member.
FXOpen doesn’t give any information about its regulatory status on the website. In fact, they have a clause in their terms and conditions which states that the information present on fxopen.com is not for the residents of Japan and Belgium and the local laws would apply.
It’s a tricky way of saying that they don’t have a license.
How can you spot a broker who is trying to deceive you?
A broker’s credentials, registration, and job history can be reviewed using BrokerCheck, a free online tool provided by FINRA. Disputes with clients, disciplinary actions, and specific financial and criminal matters on the broker’s record are all covered in the disclosure portion of BrokerCheck.
FXOpen is an unregulated and unlicensed broker.
Be wary of unlicensed and unregulated brokers. These brokers don’t follow the stringent rules and regulations of popular authorities such as the FCA or CySEC. Such brokers can use shady techniques to steal your funds or data and get away scot-free because of their unregulated nature.
Regulatory authorities keep a close watch on licensed brokers so they don’t act against their clients’ interests. In case a broker does act against their clients’ interests, the clients can get insurance compensation from their respective regulator. For example, CySEC offers €20,000 in case the broker files for insolvency. Regulators ensure that the broker keeps their operation funds separate from their clients’ trading funds as well.
Unregulated brokers don’t provide such benefits and that’s why it’s very risky to trade with them. If you want to keep your funds and data safe from fraudsters, it’s best to avoid trading with unregulated brokers.
Even though the sister company of this broker holds a license, I can’t just ignore their lack of a proper license. Your funds and data are not safe with FXOpen.
FXOpen Trading Conditions
Checking the trading conditions of a broker can help you a lot in understanding its reliability. I always recommend checking the trading conditions of the broker before signing up with them. It ensures that you don’t sign up with the wrong broker. Let’s see if FXOpen’s trading conditions are okay or not:
In terms of trading platforms, Metatrader is always the best. Metatrader 4 and 5 are among the most popular trading platforms in the forex industry because of the vast amount of benefits they offer. MT4 provides you with real-time and historical data, interactive charts, as well as, online quotes to help you make better trading decisions.
Check out this Review: JQL Markets
And with FXOpen you get access to both of these trading platforms. I was quite impressed that this broker offers both of these trading platforms to its clients.
The minimum deposit FXOpen offers to its clients is $1, which is exceptionally good. Usually, unregulated brokers keep their minimum deposit requirements high.
You shouldn’t trust brokers that have high minimum deposit requirements. It’s usually an indication that the broker is a fraudster. Because most regulated brokers keep their minimum deposit limit very low to make them accessible to a wider audience.
Shady brokers keep their minimum deposit limit high so they can steal a substantial sum of funds right away.
However, FXOpen has quite an impressive minimum deposit requirement making it a very attractive brokerage.
Leverage and Spreads
Everything was looking good until I checked the offered leverage of this broker. FXOpen offers 1:100 leverage, which is way higher than the industry average.
Brokers that offer very high leverage ratios, such as the one FXOpen offers, are usually scammers. FCA, the financial regulator in the UK, doesn’t allow its brokers to offer more than 1:30 leverage to their customers. They have added this restriction to ensure that clients don’t lose their funds because of recklessly high leverage ratios. A very high leverage ratio can cause you devastating losses.
Shady forex brokers keep their leverage ratios high so they can trap their clients in large piles of debt.
The spreads of this broker were genuinely tight and impressive. However, the high leverage was quite a disappointment.
FXOpen Payment Methods and Charges
FXOpen lets you add funds to your account through WebMoney, Redeem Voucher, Ethereum, Litecoin, credit card, Boleto, Rapipago, Oxxo, ChinaUnionPay, Bitcoin, debit card, Tether, Astropay, local bank wire transfer, Yandex.Money, Advcash, WebMoney, Airtm, FasaPay, and cashU.
Yes, this broker offers a lot of payment methods to its clients. However, each payment method has a different minimum deposit requirement and minimum withdrawal limit. The lowest withdrawal limit is $0.3 for PayPaid. The broker claims to take three days for processing wire transfers while for eWallets and credit/debit cards, it takes 24 hours.
The broker charges different fees for different payment methods. There’s a depositing fee for CashU (7% of the amount) and WebMoney ($0.8).
If you withdraw through credit or debit cards you’d have to pay 2.5% commission with $3.5 fee. For wire transfer the fee is $50 while for prepaid cards it is 0.5% commission. For cryptocurrencies and Epay you’d pay 1% of the withdrawn amount while for Airtm and WebMoney, you’d have to pay 0.8% and maximum $50.
FasaPay and YandexMoney require 0.5% and 1% fee respectively.
I noticed a lot of inconsistencies and contradictory information while checking the fees. The website gives different numbers than the members area, which makes the broker seem shady and unreliable.
They don’t mention any inactivity fee, which makes them more suspicious.
Should You Trade with FXOpen? No
FXOpen offers a lot of benefits to its clients but we can’t ignore the fact that it’s an unregulated and unlicensed broker. So, no matter how genuine they seem from outside, your funds and data would be in a lot of danger with them.
Without regulation, a broker is free to do as they please. They can impose hidden charges on your account and steal your funds, or they might steal your private data. It’s best to avoid trading with unregulated brokers.
The forex sector has many kinds of scammers. Usually, the scammers in this field focus on attracting new and inexperienced traders to their platforms through fake claims and bonus offers. They get the user to sign up on their platform and accept their fishy terms and conditions. Such brokers hide their unfair conditions in the fine print and people usually ignore them while signing up.
Then, they either use hidden fees or make excuses to take away the deposited funds from their user’s trading accounts. Having a high minimum deposit ensures that they get a substantial amount to steal from every user.
The best way to combat such scams is to do thorough research before signing up on any new broker’s website. You should check the broker’s regulation, license, address, and its reputation online. Some brokers even spend money on fake reviews to create a fake positive reputation on the internet.
FXOpen Review: Conclusion
FXOpen has great trading conditions but it’s an unregulated broker with inconsistent information and risky leverage. The lack of a license makes this broker a very dangerous option and I don’t advise working with them.
It seems like FXOpen needs to learn a lot from its sister company.