Easy Forex is aimed squarely at the beginners side of the trading spectrum. Their simple platform allows you to speculate on a range of currencies, metals and indices. The Israeli company behind Easy Forex launched in 2003, and has its headquarters in Cyprus.
Easy Forex Trading Europe is licensed by the Cyprus Stock Securities and Exchange Commission (CySec). In Australia, they are licensed under the ASIC. The company is not regulated in the U.S and therefore doesn’t accept U.S clients at the present time.
You can get started on Easy Forex by opening a standard account and placing a minimum deposit of $25. Accounts are available in most major currencies. The standard account offers fixed spreads from 3 pips for the majors and is designed with the newbie day-trader in mind.
- Standard – $25 upwards, minimum deal size 0.05 lots
- Premium – $2,000 upwards, minimum deal size, 0.1 lots
- VIP – $20,000 upwards, minimum deal size, 1 lot
The premium accounts do require a higher deposit amount and have a greater dealing size. On the other hand the spreads are lower and you’ll be offered additional VIP services such as personalized training and priority support.
In addition, all accounts, including the standard come with the following:
- Personal account representative
- Live support
- SMS alerts to your mobile device
- Access to research and educational material
All accounts have guaranteed stop losses on Easy Forex’s platforms so you know the maximum amount you can lose in any single deal.
Guaranteed stops Stops are not normally guaranteed by brokers because of the risks. When the market “gaps” the quote may pass right through your stop level without executing. For example, when breaking news happens over a weekend/holiday and the market opens at a new level with no trades in between.
These events can potentially cause a loss much greater than the amount invested, especially when high leverage is involved. When guaranteeing stops, the broker carries this risk – but keep in mind this is usually offset with higher trading fees.
Spreads and Charges
While there are no deposit or withdrawal fees at Easy Forex, the spreads on the standard account are fairly high compared to the industry average. You do have to bear in mind however that these spreads are fixed.
They won’t fluctuate under challenging market conditions such as low liquidity or high volatility as variable spreads would. But it does mean a higher percentage of rejected orders. For example, when there’s high volatility and the broker has to change the fixed quote before an order is received.
In addition to spreads, trades left open overnight are subject to a “renewal” or “roll-over” fee regardless of whether the interest rate differential is in the trader’s favor or not.
The renewal fees are very high, at 7.2% annually of the nominal amount. These can really add-up especially if you have many open positions with substantial leverage. This makes Easy Forex better suited to day traders rather than position traders.
They are the market maker in every deal transacted on their system. Trades are on their books, so keep in mind that any P&L you have may be at risk if they default.
This is in contrast to non-dealing desk execution (NDD) or an ECN broker. Many traders believe these are preferable – because there are no conflicts of interest.
With non dealing desk execution, your broker isn’t the counterparty and doesn’t, in principle, assume any risk at all in the transaction.
They obtain quotes from a number of liquidity providers (usually international banks and currency dealers) and simply broker the transaction adding on their spread or commission.
Pros and cons There are pros and cons to everything and dealing desk execution is no different. The main advantages of using a “dealing desk” are fixed (or lower) spreads and guaranteed stops. Plus you do at least know and can asses the risk of your counterparty.
Conflicts The downside however is that it raises a potential conflict of interest. As counterparty and market maker, the “dealing desk” knows your position; they can see your stops and your limits.
This setup is designed with the beginner in mind so that they can see how much is at risk when they trade. It makes it easy to see how much exposure you have.
If you don’t want dealer intervention in your trades, you can use the MT4 platform instead. Easy Forex states that MT4 accounts use straight through order execution and trades will bypass the dealing desk. Using MetaTrader also allows the use of expert advisors to automate your strategy.
Easy Forex Platforms
You’ll have the choice of five alternative trading platforms including an online webtrader, the downloadable MT platform, and two mobile apps, one for iPhone and an MT4 app for Windows phones.
I found the webtrader a bit quirky, but once you get the hang of it, it’s pretty simple to use. You don’t enter stops and limits directly for each trade. Instead, it asks you for the amount to trade and your chosen margin (the amount you want to risk). This establishes your leverage.
The system then calculates the stop level automatically based on your given settings. Each position trades with its own margin and leverage. And the margin gets locked from your overall free balance.
Example Say you’re selling EUR/USD and choose the smallest trade size of EUR 5,000. If you set the margin at $25 the system would automatically set your stop loss at +50 pips from the spot price. Your free balance is then temporarily reduced by $25 to cover your margin for the trade.
This setup is designed with the beginner in mind so that they can see exactly how much is at risk when they trade. It makes it very easy to see how much exposure you have. The position is guaranteed to close out at the chosen level, so you always know the worst case P&L you can achieve.
Freeze There’s also a useful feature on the trade panel called “freeze rate”. What this does is it allows you to temporarily fix a rate just before you enter a trade. This is helpful in fast moving markets. However be aware that it’s not always guaranteed to freeze at your desired rate. Plus it only freezes the price for a few seconds.
The choice of instruments you can trade will depend on your platform – all are available on the webtrader or mobile app. The complete selection includes:
- Precious metals
- Futures contracts
- Forex options
Easy Forex allows you to trade options on a range of currency pairs. Opening a new position brings up the options trade tab (in easy mode). One side is for trading put options, and the other calls. If you click the button at the bottom it brings up a scenario generator.
The attraction of trading options is that the loss is limited to the amount paid for the option premium. However due to the high gearing, the upside can be enormous.
In here you can enter a range of expiry levels against your given strike price. The chart and tables will show you the expected payoff and potential cash flow from the option.
By default, the tool only displays options with strike price at the money (at the current spot price). If you want to trade in the money, or out of the money options you can click the “create trade” button. This takes you to the advanced panel where you can create a customized option.
Just enter your required strike price as a percentage away from the current price or as an actual value. Next enter the option’s expiry date. The scenario tool will then show you your potential payoffs.
With the tool you can also create and trade your own option strategies or use those of others.
The attraction of trading options is that the loss is limited to the amount paid for the option premium. However due to the high gearing, the upside can be enormous. This is especially true with options which are deeply out of the money and which are close to expiry. Having a high probability of expiring worthless, these options are more speculative.
There’s a huge range of trading tools and resources on Easy Forex. However most are beyond the scope of this review. I’ll only summarize a few of them here.
Insider View This gadget lets you see how other people are trading at any given instant. Just select the pair you’re studying and “up pops” a little graph telling you how many people are buying, and how many are selling that currency pair right now. Click the “structure” tab and that will tell you where the average stops and limits are.
This is useful for deciding how to setup your own trade. It gives you an edge because you’ll have additional insight beyond just charts and fundamentals.
Trade Controller The little graphic tool that appears when you modify a trade is called the “trade controller”. It lets you graphically adjust the stops and take-profit levels for the trade. The bar underneath the graphic tells you your potential profit or loss with your chosen values.
It’s a useful tool that lets you visualize your profit scenarios and adjust your risk-reward settings.
The charts which are integrated into the trading panel are a bit on the small side. They also don’t have any indicators or analysis tools. You need to open the full charting section for that. If you’re using the webtrader it’s frustrating because you have to keep switching from one page to the other.
Research and Analysis
This is probably the most useful part of the site. When it comes to research, a lot of brokers either provide a mass of unorganized information that’s too difficult to digest or they provide summaries which are too short.
The nice thing about Easy Forex’s research section is that they have the relevant data in a concise form, plus a link to the original report. I find the UBS Morning Advisor to be a good “heads up” for the day’s trading events.
The UBS report usually arrives at 7a.m. and it summarizes the important announcements and critical events for the coming day. This includes important economic releases as well as central bank statements.
It also has a nice technical summary which gives trend forecasts for several currency pairs using their own proprietary charting models.
If you’re in need of a forex crash course, or just fancy a refresher, there’s a free eBook that you can download from the user’s area.
The eBook provides a decent introduction to the subject and covers all of the essentials including trading basics, spreads, pips, leverage, fundamentals, and charting. It also explains the key factors that can influence exchange rates such as interest rates, inflation and the economy.
All of the examples are geared around and contain references to their own platform. Nevertheless the book is a worthwhile read and summarizes a lot of important concepts very nicely.
To Sum Up…
While Easy Forex doesn’t offer the most competitive spreads, they do offer other things that will appeal to some traders, especially those who’re new to forex. Fixed spreads and guaranteed stops help to eliminate uncertainty. However traders need to weigh this up against the “dealing desk” mode of trade execution which is used.
There’s a nice selection of trading tools and access to extensive research material that will help traders keep abreast of market developments. Easy Forex also lets you trade the forward markets as well as currency options.