InstaForex is a Russian owned and regulated broker that offers clients a range of currencies, CFDs, options and copying trading services.
Traditionally InstaForex has been more geared towards the Eastern European and Asian client base. Whilst there are no geographical restrictions, there may be cultural ones.
If you’re used to a clean, simple interface, InstaForex can seem a bit overwhelming at first. I felt the account interface had a busy and confusing layout. When simply trying to manage your account, which should be a “no-brainer”, you’re hit with a bewildering array of widgets, menu options, buttons and flashing banners ads.
On a personal level, I also thought many of the website’s forms and written guides were particularly difficult to understand. This being due to the fact that the textual content appears to have been automatically translated into English from Russian.
Getting around the account admin area takes patience. There are deep menus, and an often confusing navigation system to get your head around.
If you can move past the aesthetics, Instaforex does offer a good selection of tools, guidance and market feeds.
Fortunately, most trading activity takes place within the downloadable trading platform called InstaTrader (a MetaTrader variant – see below). So if you can move past the aesthetics of the website, this broker does offer it’s clients a very good selection of trading and investment tools, guidance and market data feeds.
It also offers advanced account functions such as copy trading and a third party account management service known as PAMM.
InstaForex executes its trade orders via their ECN (Electronic Communication Network). In an ECN traders make their own markets, by quoting a bid/offer and so providing liquidity. However InstaForex say that where orders cannot be matched within their network, they use straight through order processing (STP). In STP, transactions are electronically routed to external quoting dealers or relevant exchanges in the case of exchange traded instruments. So in reality, this broker uses a hybrid order handling system.
As well as access to 107 currency pairs, traders have a choice of several other instruments including:
- U.S. Stocks (NYSE)
- Metals/CFDs (spot)
- Currency options
- Commodity futures/CFDs
Account Types and Commissions
Your dealing costs at InstaForex will depend on your choice of trading account type. The InstaForex Standard Account offers fixed spreads. The Standard Account will suit most traders and account sizes. This choice of account allows trading micro, mini or standard lot sizes with fixed spreads between 3 and 7 pips.
The alternative choice is the Eurica account. The Eurica Trading Account works on a zero spread basis. Dealing commissions are applied per trade and currently run at 0.03%-0.07%. InstaForex suggest that the Eurica Account is better for beginners, who possibly prefer the simplicity of trading without having to think about spreads.
Personally I think it’s simpler to trade with spreads rather than commissions. Moreover most brokers apply charges through spreads, so it makes sense to familiarize yourself with that manner of trading right from the start. However there are arguments for both spreads vs. commission based fees.
All other features of the account, such as margin calls, minimum deposits and leverage are the same as the Standard Account.
InstaForex accepts a wide range of payment sources inlcuding WebMoney, Qiwi, MoneyBookers, AlertPay, Pecunix, PayPal, RBKMoney, credit cards, and of course wire transfer.
Up until recently they also accepted payments from Liberty Reserve, which has been shut down pending a money laundering investigation. However, that’s been stopped and a post on the broker’s website states that those who’ve deposited funds via Liberty Reserve will be charged a 50% withdrawal fee on their funds (ouch!).
Like most brokers, InstaForex offers clients both practice and real trading accounts.
In order to begin trading either in real or practice mode, you’ll first need to download the trading application, InstaTrader which is simply a branded version of Meta Trader 4.
Like eToro, InstaForex offer their own proprietary copy trading system, which they call ForexCopy.
The package is available from InstaForex’s website, and comes pre-configured with everything you’ll need to trade with this broker – you’ll just need to link-up your InstaForex account via the Meta Trader secure login window. There are desktop, mobile and tablet versions (as well as Mac versions) of Meta Trader which you can choose from on the download page of the website.
The website admin panel is primarily intended for account management including deposits and withdrawals, viewing your trade history, news and company information. If you’re planning on trading currency options, you can do that through the website. Other instruments, spot currencies, metals, and stocks can all be traded via the InstaTrader platform.
Like eToro, InstaForex offer their own proprietary copy trading system, which they call ForexCopy. If you’re not familiar with copy trading, please do take a look at my separate article on that subject.
Unlike eToro, with InstaForex you have to register separately to use the ForexCopy system – there’s a separate legal contract. After registration and acceptance of the terms you can choose to participate as a follower, copier or both.
Once registered for copy trading, you can select the trader monitor list from within the account admin panel and from there you can choose which traders you’d like to copy or manage those who’re you may already be copying. Trading performance metrics and other comparison figures concerning each trader are readily accessible from within the copy management area.
In addition to copy trading, InstaForex offers a third party account management system known as PAMM (percent allocation management module). As a PAMM investor you can allocate a proportion of your funds to any number of PAMM registered traders who will manage your funds on your behalf.
Not so long ago, these types of service were usually only offered by investment banks and large brokers, and they were only offered to institutional clients or those with portfolios worth millions of dollars!
Unlike copy trading, where trades are executed from within your own account, with PAMM, the chosen trader has a discretionary mandate over the funds allocated to invest according to his/her prescribed trading strategy (which is usually outlined in the contractual agreement, along with performance fees).
As with copy trading, the PAMM trader’s own money is traded alongside the investors, so his or her success is aligned with the investor’s. This makes it relatively easy for professional asset managers to diversify large portfolios across multiple trading styles and strategies.
Traders participating in the PAMM system, together with their performance statistics and fees are displayed within the management area.
To participate in PAMM as either a trader or investor, you first need to register and accept the terms (within the account panel). Be aware that it’s not possible to use both PAMM and copy trader within the same account.
For more details on PAMM accounts, please see my other post on forexop which addresses the subject in more detail.
On InstaForex, PAMM and copy trading can be used with account balances as low as $1. However, for practical purposes they recommend a starting balance of at least a one hundred dollars.
Forex Signals and Expert Advisors
InstaForex supports a wide range of forex signaling services and expert advisors via InstaTrader. The platform integrates easily with advanced subscriber services which are available on MQL5.com. To link your signal, simply select the signal tab and enter your MQL5 login details securely into the Meta Trader window.
In case you are using automated signals, InstaForex does provide their own VPS hosting service so that you can run your trading program continuously (or during any market opening hours you choose). Be aware that if you choose this service, there are extra charges which will be deducted from your account balance each month. The lower-end VPS service is currently offered for free if your account balance is over $5,000.