RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
With many companies that comprise Multibank Group, we must say that Multibankfx presence in the forex online trading world does look impressive. However, the question how suitable for you is to trade with this broker still remains.
Multibankfx Regulation and safety of funds
MEX Group Worldwide Limited that is the owner of Multibanksfx is registered and regulated in 7 jurisdictions – Australia, Germany, Switzerland, Spain, Dubai British Virgin Islands and Cayman Islands. On its website, the broker provides links to all the regulators which proves the transparency and legitimacy of the company.
We must say that the requirements for forex brokers licensed in these jurisdictions differ from each other. For example, in Australia, forex brokers must deposit an initial capital of 1 million AUD to be able to operate. A distinctive characteristic for Australian brokers is that they are not bound by a limit on leverage until 29 March 2021 when the regulations will change to mirror those in the EU and the UK which makes them attractive to adventurous traders ready to engage in higher risk transactions.
On the other hand EU brokers in Germany and Spain must must abide by ESMA guidelines which impose a deposit of 730,000 EUR initial capital and capped leverage which for the forex currencies cannot exceed 1:30.
The British Virgin Islands and the Cayman Islands are offshore zones for forex trade and forex brokers are not that strictly regulated. We can mention that for British Virgin Islands brokers the Financial Services Commission decides the amount of the initial capital on a case by case basis and it may vary between $100,000 and $1 million, whereas for the Cayman Islands brokers the minimum payed up capital is no less than $120,000.
Multibankfx Trading software
Multibanks trades in forex, metals, shares, indices and commodities. The trading software consists of the MetaTrader 4 and MetaTrader 5 trading platforms. As the requirement for opening a trading account with this broker is to provide a personal ID which we did not want to do, we did not open a trading account. However, we can tell you that MT4 and MT5 are good quality software and choice number one for 80% of the brokers. This is quite understandable as both platform offer a lot of advantages to the traders, such as an auto trading option, VPS, code base with customs scripts, trading signals, an app market, a financial calendar, etc. Traders using these platforms won’t be disappointed as MT4 and MT5 will enhance their trading experience thanks to the variety of charting options that contain a lot of charts, time frames, colours and even the option of creating customised templates. When combined with the array of technical analysis indicators, they help traders predict the future direction of exchange rates and make a profit.
However, looking at the parameters for these platforms which are given on the company’s website, we can’t help it but notice that the spread for the EUR/USD currency pair is 0.1 pips for the ECN account and 1.4 pips for the Maximus account. Such spread is below the industry average of 1.5 pips which means that the cost of transactions won’t be too high and traders will be able to make a sustainable profit.
We are worried, though that the leverage offered by Multibankfx is too high – 1:500. High leverage signifies 2 things – a big win or a big loss. Newbies and adventurous traders get tempted by such high leverage thinking that it will increase the potential for making a big win. This, however, is not exactly so. All brokers, even the fraudulent ones, warn their clients that forex trade contains high risks for their funds, and they are right given the fact that over 70% of traders lose in transactions. The implications are that the scope of financial loss will be amplified by the high leverage. It is not by chance that in the EU and the UK, licensed brokers have a limit on leverage and it cannot exceed 1:30 for forex currencies and in the US, it is 1:50. These are measures to prevent clients from trading recklessly and risking their precious money. For this reason, we do not recommend trading with Multibankfx.
Multibankfx Deposit/Withdrawal methods and fees
From the image below, you may notice that the trading accounts offered by Multibankfx are 3 – Maximus, MultiBank Pro and ECN Pro. The minimum initial deposit for the Maximus account is $50 and for the MultiBank Pro and ECN Pro, $1,000 and $5,000 respectively.
If a trading account stays inactive for a period of 3 months, a monthly fee of $60 will be charged. We have noticed that other licensed brokers give a longer grace period of 6 months or even 1 year.
If you take a second look at the image above, you will notice that this broker offers different bonuses and promotions to its clients. For example, there is the 20% bonus, Imperial bonus and Refer a Friend bonus. We want to caution any potential clients of Multibankfx not to treat lightly the bonus conditions. Although on the website it says that clients can earn a deposit bonus of up to $40,000, this should not be treated as free lunch. Remember that bonuses are funds belonging to the broker, not the client and they are subjected to some hard to meet conditions. Let’s take for example the 20% bonus: the minimum deposit required for it is $1,000. For every $200 of the bonus amount that the client wishes to withdraw, he/she must trade a volume of 80 lots. In addition to that, clients must complete the trading requirements within 90 days of receiving the bonus. If clients cannot meet the deadline, then they are entitled only a percentage of the bonus. As you can see this is not something easily achievable and we ask you to exercise utmost caution when considering accepting a bonus.
This is the other reason for which we consider that trading with this broker is not advisable. Also, we want to let you know that licensed brokers in the EU and the UK and some other strictly regulated jurisdictions are banned from offering bonuses and other incentives.