LiteForex is an unregulated forex broker which was established in 2005. They offer their clients the ability to trade in 38 currency pairs, precious metals, oil, CFDs, currency baskets and world stock indices.
A broad range of account types are offered. The entry level ones will appeal to beginners and smaller investors due to their low deposit and the ability to trade fractional lots.
They don’t provide a web trading platform as such. Their web portal lets you administer your account, add and remove funds, create new sub accounts, and manage PAMM copy trading (see below).
To trade on your own you’ll need to download the Meta Trader package and install it on your PC desktop.
A wide array of funding choices are available including bank, credit card, Skrill, WebMoney, and bitcoin.
Key Features of LiteForex
- “Nano” trading accounts available with lowest deposits of one dollar.
- Choice of dealing desk or “open market” execution accounts.
- Leverage up to 1000 times.
- Fixed spreads from 3 pips are available on dealing desk accounts.
- Trailing stops can be used.
- In order to trade, you’ll need to download the Meta Trader software – there isn’t a web interface.
- PAMM accounts are available with unique features such as take-profits and capital protection.
- Bonuses of up to 40% are available but there are minimum “trading activity” requirements.
This is the starter account, which you can open with a minimum deposit of $1. It’s available in four major currencies. This account is suitable for extremely small scale trading activities. The minimum transaction size is only one tenth of a micro lot or $100 per trade contract.
If you are using the maximum leverage of 1:1000, that means your smallest margin for one trade on this account would be 10 cents. And each pip you gain or lose is worth approximately 1 cent.
The next level up is the real account. The minimum deposit here is $100, and the maximum leverage is 200:1. The minimum trade size is 1 micro lot – or $1000.
Trades on both the Lite and Real accounts are executed through LiteForex‘s dealing desk. This means they are your market maker. These account types both provide instant execution and fixed spreads from 3 pips upwards.
Fixed spreads can be both a blessing and a curse. Although you have some peace of mind that your spreads won’t widen during high volatility – it means you risk being frequently “requoted”.
Requotes Requoting happens when your quoted price changes between the time your quote is offered and the time your trade is received for execution. Usually this happens in volatile markets that are rapidly “adjusting”. Usually this is because of news announcements or technical conditions.
Fixed spreads give you some peace of mind that your spreads won’t widen during high volatility – but it means you risk being frequently “requoted”.
The broker can’t (or won’t) execute the trade at the quoted price and therefore needs to offer you a new price or requote. This doesn’t happen with variable spread accounts because the spread usually just widens to compensate for the higher volatility – or less predictable pricing environment.
Tip When choosing your account type, you’ll need to weigh-up if your strategy will require a lot of trading during economic announcements or during other volatile periods.
If so it’s probably better to go for a variable spread account (see below). Otherwise you’ll just be hampered by requoting. The other option is to place limit orders instead of market orders.
If you prefer your trades to be executed on the open market via the interbank network, you have a choice between NDD (non dealing desk) or STP (straight through processing) type accounts.
The NDD is a micro account, while the STP is a mini account. In most other respects they’re the same other than the minimum balances, maximum leverage and the interest rate.
LiteForex doesn’t offer segregated accounts as standard. With non segregated accounts – basically all of the above – your funds are at risk if the company goes bankrupt or is subjected to a force majeure.
In order to isolate your funds from the company’s balance sheet and keep them out of harms way you’ll need to opt for the segregated account and have a nominated custodian. Worth it in my view if you have a big trading account.
PAMM – Using LiteForex’s Copy Trader
If you plan to use LiteForex as an investment platform – rather than for trading, their PAMM system is what you’ll be interested in. Basically PAMM is an automatic trade copying service that lets you invest your money with one or more experienced traders.
I’ve talked about PAMM investments several times before on forexop – these services are now offered by a variety of different brokers. LiteForex’s PAMM system has an easy setup and lets you start investing with funds as low as $10 per trader.
It can all be managed through your account panel on the main website.
If you’re interested in using these sorts of investment tools, please take a look at my separate LiteForex PAMM account article on forexop which covers this subject in a lot more detail.
Research and analytics: LiteForex’s economic news feed is provided through the website fxstreet. No point in re-inventing the wheel! They do however have their own in-house analysts who provide daily market opinions and commentary – mostly on technical aspects but also a little on fundamentals.
In the “tools” section, they also have a couple of handy little calculators. The trading calculator lets you run “what if” scenarios. Using the extended mode, you can see profit potential, required margin and fees.
There’s also a Fibonacci calculator that works out retracement levels. To be honest most charting software will do this for you – but it is sometimes handy to have the exact numbers crunched for you.
Help and Support: I’ve used the live support system quite a bit on LiteForex. Most of the time I found the chat operators to be helpful, polite and have good expertize. What I found frustrating though is that with more complex questions, they do often just “quote verbatim” chunks of text from the website rather than answer questions properly.
The offline support system was a lot slower in my experience. It sometimes take several days to get an email response, and can require a few follow ups.
Using Robots and EAs
LiteForex will allow you to use 3rd party robots and expert advisors (EAs) provided they run through the Meta Trader terminal. Unfortunately you can’t connect your account to ZuluTrade or any other signal platform that I’m aware of.
If you’re going to use automated software, you can also opt for a VPS service. VPS, or Virtual Private Servers costs $20 per month. This basically lets you run your software – hands-free -on a remote server. Essential if you’re running an automated program trading strategy.
Bonuses & Competitions
Right now, LiteForex has several different bonuses to choose from. There’s even one for people who’ve lost money in trading. A welcome bonus of up to 40% is offered to new clients. The bonus is given on all deposits over $100.
Note: To release the bonus and turn it into real equity you’ll need to do a lot of trading to satisfy the minimum volume requirements. Up until that point, your bonus can’t be withdrawn or used for trading.
Keep an eye out for trading competitions too. These change from time to time, but they often have some substantial prizes up for grabs.
Is This A Good Broker?
The account types and services offered by LiteForex don’t really distinguish it that much from other forex brokers out there. There is a big 40% incentive bonus up for grabs, but to achieve that you’ll need satisfy their minimum trade volumes which are quite high.
One thing that worries me about this broker is their lack of regulatory oversight.
The main point in favor of LiteForex I think is their PAMM tool. I like this tool for a number of reasons. It’s simple, provides comprehensive performance data, and lets you get started with very small investment amounts – just $10. It also lets you set take-profit targets and capital protection. I’ve written a separate post on forexop covering PAMM in more detail if you’re interested in this type of investment account.
Lack of transparency One thing that worries me about this broker however is their lack of regulatory oversight. The company, is registered in the Marshal Islands. Which is an offshore jurisdiction with minimal transparency and legal obligations for companies registered there.
There also isn’t a physical business address other than their registered office in the Marshal Islands. I suspect this is just a P.O box.
Admittedly, a regulatory body isn’t a fail safe. But it does give clients at least some peace of mind that there’s a place to lodge a formal complaint if there’s a problem with the broker. My lower rating for this broker reflect these concerns.