RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
Trade Nation could be the personification of what globalisation is about. With branches around the world, it wants to instil among present and potential clients the sense of a community united in a one global trade nation. We looked at what this broker has to offer.
Trade Nation Regulation and safety of funds
Trade Nation is the trading name of Finsa Europe Limited which claims to be registered in the UK, Australia and the Bahamas.
Our check to verify that the company is registered with the Financial Conduct Authority (FCA) confirmed that Trade Nation is one of the seven names under which Finsa Europe Limited operates in the UK (screenshot below)
In Australia, Trade Nation is the trading name for Finsa Pty Ltd. The register of the Australian Securities and Investments Commission (ASIC) the official body that regulates forex brokers in Australia, also contained the name of the company (screenshot below).
However, in the register of the Securities Commission of the Bahamas (SCB) did not have the name of Trade Nation Ltd.
The regulations for licensed brokers in the UK and Australia are different. In the UK, to get their license, forex brokers must invest an initial capital of 730,000 EUR and they must contribute towards the local Financial Services Compensation Scheme from which, in case of bankruptcy, the clients can be compensated up to 85,000 GBP per client. Strict regulations by which forex brokers must abide include keeping clients’ funds segregated with tier-1 bank establishments, reporting transactions on a daily basis for the sake of transparency and providing protection against negative balance.
In Australia, there are no compensation funds or schemes, so being well-capitalised allows licensed brokers to take care of their clients in case of unfavourable events. The amount of the initial capital that brokers must deposit is 1 million AUD. Another major difference is the leverage which in the UK is capped at 1:30 and in Australia for the time being it is unlimited. However, changes in the regulations for forex brokers in March 2021 will impose a cap on leverage that equals the one in the UK.
Trade Nation Trading software
Trade Nation offers two trading accounts – a practice and a live account. Unfortunately, the link to the practice account was broken. For opening a live account, the broker has a long registrations procedure. Potential traders must take a quiz regarding their forex trade experience. If they have no experience in forex trade and want to open a live account, the system does not let them do so. If they claim to have some experience in forex trade, then they must ask various questions to test their knowledge. Once you pass the quiz, you must fill out a lot of private and personal information. Licensed brokers normally would not ask for that from the very beginning. Verification of personal data is done at a later stage, not from the very beginning. Because of that, we chose not to open a live account.
By the looks at the company’s interface, we assume that the trading software offered to the clients consist of a web trader. From the information available on the company’s website, we found out that this broker offers fixed spreads (screenshot below). If we look at the spread for the EUR/USD currency pair, we can see that it is, in fact, low – 0.6 pips. The industry average is 1.5 pips. The low spread is beneficial for traders as the cost of transactions will be low and they will be able to make a sustainable profit.
The parameters of the leverage set by the broker are of big importance as well. Whether the leverage is high or low may have an impact on the risk undertaken by the trader and the scope of financial loss in case of unsuccessful transactions. Some traders get excited by high leverage believing that it will increase the potential of making a big win. However, if you take into consideration that 70% of traders suffer loss in transactions, you will realise that high leverage also amplifies the exposure to risk and great financial loss. Some jurisdictions, such as the UK, the EU and the US have capped leverage as a measure of protection of clients’ funds. In the EU and the UK, licensed brokers cannot exceed leverage higher than 1:30. In the US, the cap on leverage is 1:50. Only in Australia, which is also one of the well-established jurisdictions, forex brokers still enjoy unlimited leverage. However, this is going to change in March 2021 when changes in the regulations for forex brokers will bring leverage to mirror the one in the EU and the UK.
We want to comment on the choice of a platform as it has an impact on traders’ potential for a successful trading experience. Some platforms, such as MetaTrader 4 and MetaTrader 5 are well-equipped to enhance the clients’ trading experience by offering useful trading tools and instruments. For example, both platforms have an auto trading option, trading signals, code base with customs scripts, VPS, an app market and a financial calendar. One of the best features in these platforms is the charting options that provide the traders with many charts, time frames and colours to choose from, including the option of creating customised templates. Another big advantage in choosing either MT4 or MT5 is the fact that they contain a vast array of technical analysis indicators, such as Bollinger Bands, Fibonacci retracement, moving averages, etc., that help traders predict the future direction of exchange rates and make a profit.
We strongly recommend selecting a licensed broker that offers either of these platforms.
Trade Nation Deposit/Withdrawal methods and fees
There is no minimum initial deposit and the payment methods include credit cards, bank transfers and Skrill.
If a trading account stays inactive for 90 days, it will be considered dormant and the account manager will contact the client. There is no mention about fees for the maintenance of such an account.
In the Terms and Conditions document for the UK, we saw mentioned bonuses. However, there was no elaboration about what types of bonuses are offered or the conditions they are subject to.