Depot FX review – 5 things you should know about deppmarkets.com

Beware! Depot FX is an offshore broker! Your investment may be at risk.

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Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.

Depot FX presents itself as a globally recognised, safe and transparent forex broker. But in preparing this review, we found no evidence to support these claims, including that Depot FX is a genuine broker.

Let’s take a detailed look at why it’s advisable to stay away from Depot FX and what more credible alternatives you have for trading the financial markets.

Depot FX Regulation and safety of funds

The first thing to look for in a forex broker’s website is which legal entity runs it, where it is based and what regulatory oversight it is subject to. Licensed companies are also required to provide a comprehensive set of legal documentation.

According to the homepage of the website, this broker is run by a company called Depot FX (Pty) Ltd, based in the UK and authorised by the Financial Conduct Authority (FCA).

However, a check of this regulator’s register reveals that Depot FX is not among the licensed financial services providers.

Depot FX claims to have offices in other regulated jurisdictions such as Australia, but verification shows that this is also untrue.

The “Contact Us” section lists a different company, Depot FX Llc, which is stated to be based in Saint Vincent and the Grenadines (SVG).

This company cannot be found among those registered in SVG. However, even if the actual owner of the website is based there, this does not provide any guarantee of customer funds.

SVG is an offshore zone with no broker regulations in place. As soon as you open the website of the local Financial Services Authority you see a warning that the institution does not licence forex and other types of brokers and does not supervise the activities of International Business Companies engaged in such activities.

Depot FX does not provide access to a Customer Agreement or other documentation that specifies who we are dealing with and what terms we agree to when we sign up for an account.

If you have decided to invest in financial instruments, and especially if you are a novice trader, you should use the services of a licensed broker based in a jurisdiction with strong regulations.

Depending on your location, it is advisable to choose a company that is regulated by an institution such as Commodity Futures Trading Commission (CFTC) in the US, Australian Securities and Exchanges Commission (ASIC), UK’s Financial Conduct Authority (FCA) or some EU regulator like Cyprus Securities and Exchange Commission (CySEC).

Clients of these brokers receive protections such as negative balance protection and segregation of the client’s funds from the broker’s funds.  In the EU and the UK, brokers must also participate in guarantee schemes that cover a certain amount of the trader’s investment if the broker becomes insolvent. These guarantees amount to up to 20 000 EUR in the EU and 85 000 GBP in the UK.

Depot FX Trading software

The website mentions the industry standard MetaTrader 4 and 5 platforms, but we do not get access to this or any other trading software after account registration. Depot FX does not appear to have the technological tools to facilitate trading in financial instruments.

There are plenty of legitimate, regulated brokers who enable their clients to take advantage of MetaTrader 4 and MetaTrader 5 ‘s capabilities.

These platforms have established themselves as industry standard because they offer a wide range of features, including a variety of options for customization, multiple account usage, designing and implementing custom scripts for automated trading and backtesting trade strategies.

Depot FX Trading instruments

Depot FX states that it offers trading in forex, commodities and equities, but does not provide clear and detailed information on trading conditions.

Depot FX Spreads and cost of trading

The website promises a spread between 1.2 and 1.8 pips for a Standard account and a commission of 6 USD per round turn for an ECN account. But there was no way to confirm this given the lack of trading software.

Depot FX Maximum leverage

Depot FX states that it offers a maximum leverage of 1:500. This is also evidence that Depot FX is not the regulated broker it claims to be.

High leverage creates the opportunity for more significant profit, but correspondingly increases the risk of sudden and excessive losses. All leading regulators therefore restrict leverage for retail traders.  A maximum leverage of 1:30 is allowed in the European Union and the United Kingdom and 1:50 in the United States.

Another such evidence is Depot FX’s claim that it offers a Deposit Bonus. Regulated brokers are prohibited from offering bonuses and promotions. Scammers often use promises of supposedly generous bonuses to tie their potential victims to extortionate terms.

If you are willing to take the risk of trading with high leverage and benefit from bonuses and promotions, the best option is to invest through an offshore division of an established brand.

Depot FX Deposit and withdrawal methods

Depot FX advertises the ability to deposit via multiple payment methods, but the real choice is between wire transfer and cryptocurrencies. Both methods do not allow a refund or chargeback to be requested.

Legitimate brokers typically offer clients a wide choice of transparent payment methods, including established e-wallets such as PayPal, Skrill or Neteller.

Depot FX Minimum deposit

Depot FX does not specify a minimum deposit. Established brands in the industry offer beginner traders Micro Accounts with very low initial investment requirements.

Depot FX Withdrawal requirements

Depot FX does not state specific withdrawal terms, but we have every reason to expect hidden fees and other unpleasant surprises from such a shady website.