3 Strengths And Weaknesses Of IC Markets
An IC Markets review (International Capital Markets Pty Ltd) was completed in March 2018 finding:
Strengths Of IC Markets:
- The Highest Leverage Level
- Low Spreads Starting At Just 0.4 Pips
- Choice Of Forex Platform
Weaknesses Of IC Markets:
- No Risk Management Tools
- Lack Of Other Financial Products
- Lack Of Research Tools
Each of the points in the IC Markets review are discussed in detail below as well as a detailed Australia forex broker comparison.
Strength 1 – IC Markets Offers The Highest Leverage
Of the most credible Australian forex brokers, IC Markets offered the equal highest leverage level of 500:1.
As the graph above highlights, only a handful of Australian forex brokers offer 500:1 for forex trading and of these brokers, some put restrictions on what forex traders can access this level.
So What Is Leverage?
Leverage is effectively the amount a forex broker allows a trader to borrow when trading currency. It’s a multiple of the deposit so for IC Markets a 500:1 leverage means you can trade up to 500 times the initial capital. For example, a $200 deposit (the minimum deposit requirement of IC Markets) can lead to $100,000 worth of currency to be traded on currency markets.
Forex Trading Leverage Example
- A trader has a $100 deposit and selects a leverage of 100:1 for the AUD/USD pairing.
- The markets move in the trader’s favour by 0.4% and the position is closed
- The trader will make $100 * 100 * 0.004
- The total profit is $400 (or 40%)
Why Is High Leverage Important?
Currency markets normally have relatively small movements each day compared to other financial products. If you used a conventional forex exchange service (eg purchasing USD currency) the returns would be normally very modest. To amplify these movements leverage is required which can make it easy to make a profit (or loss) from small movements.
High leverage is particularity suited for forex traders who have a high risk tolerate, use scalping software (eg expert advisors) or trade currency pairings with low volatility (or during a low volatility period).
Strength 2 – IC Markets Has Low ECN Spreads
IC Markets has three main accounts but our review focused solely on the true ECN and cTrader account which offers the best features and lowest forex trading costs from the forex broker.
1) Standard Account
- No commissions on trades, rather larger spreads
- Use of the MetaTrader 4 forex trading platform
2) True ECN Account
- $3.50 per lot commission and lower market based spreads
- Use of MetaTrader 4 forex trading platform
3) cTrader ECN Account
- $3.00 per lot commission and lower market based spreads
- Use of cTrader forex trading platform
Based on the two ECN forex trading accounts by IC Markets, the overall spreads and commissions were found to be some of the best from the Australian forex brokers
IC Markets offers a number of funding and withdrawal methods such as bank transfer credit cards and even PayPal with no additional fees charges. Only in some instances may some fees be charged by some international institutions.
Strength 3 – IC Has The Best Forex Trading Platforms
IC Markets offers the three most popular forex trading platforms.
- The worlds most popular trading platform for beginner, intermediate and scalping traders
- Interface that is easy to use with prompt order management functionality
- Algorithmic trading and Expert Advisors for scalping traders
- Has a built-in Market of trading robots for easy automated forex trading
- Includes the Virtual Hosting service (Forex VPS) to maximise execution speeds
- Access to the MQL5 community including free trading robots
- Interface that can be personalised with detachable charting options and an android app
- Direct access setup to liquidity pools designed for algorithmic forex trading
- Back testing facilities based on past market data
There are 10 additional tools that IC Markets integrated into the forex trading platforms. These enhance currency trading can can give trader an edge in the market including:
- Alarm Manager
The trading assistant that notifies the trader visa SMS, email or SMS of market changes and events on the account. This assistant can also take automatic actions.
- Correlation Matrix
Helps a trader identify the symbols with strong or weak correlation. This occurs on different time-scales to enable superior decision marking.
- Correlation Trader
Highlights the correlation over a configurable time-frame between two symbols. This allows trading on the emerging differences).
- Trade Terminal
Trade execution tool with in-depth features to analyse the markets. This tool consist of market watch, account summary or order list.
- Market Manager
This tool provides a ‘watch list’ and allows opening and closing of positions, provides headline information such as equity, lists tickets and positions and provides a summary of price activity.
- Sentiment Trader
Illustrates the sentiment based on current positions whether long or short when it comes to open position. These are calculated based on real-money accounts.
- Session Map
Provides forex traders with a market overview via a map using local time. It also provides markers for future news events and price activity during each session.
- Smart Lines
This tool uses line objects as the stop-loss or take-profit for positions. Feature included a trend-line stop-loss, multiple partial stops and time-based stops.
- Stealth Orders
This tool hides a forex traders entry and exit levels from the market. This feature buys or sells at the current market price when the price level is reached.
- Tick Chart Trader
This shows tick charts in a variety of styles. It allows forex traders faster trades using a mouse of keyboard.
The combination of the choice of three of the best and most popular forex platforms in addition to the additional features led to IC Markets considered to be the best forex broker for this feature.
Additional Forex Platform Bonus – Execution Speeds
The three forex trading platforms above use Equinix servers (the LD5 server in London for cTrader and NY4 in New York for MetaTrader) maximising the execution speeds of the three trading platforms shown above. They also have a direct access interbank price feeds from more than 50 banks and institutional liquidity providers minimising slippage when forex trading.
Weakness 1 – IC Has Minimal Risk Management Tools
IC Markets provides the highest leverage of 500:1 increasing exposure to the market. This is ideal for forex traders with a high-risk appetite or those using third party tools such as expert advisors. Traders though with a lower risk appetite or those new to trading though may require risk management tools that our IC Markets review shows they don’t have.
1) Guaranteed Stops
A guaranteed stop is when you can pre-set the maximum amount your willing to lose on an individual trade. Regardless of market conditions this pre-determined amount is set. This different from IC Markets stop-loss order facility, which allows a trader to set the maximum loss but in high volatility environments losses may exceed this amount.
2) Negative Balance Protection
IC Markets has an advanced margin call facility that detects when a trader is approaching a $0 balance and exits the trader automatically. The key issue is that in extreme market events such as the the floating of the Swiss Franc this software may not have the ability to exit the market fast. This can lead to losses exceeding deposits and the Australian forex broker may request for the outstanding debt to be paid.
Without the two facilities above, IC Markets received a poorer score than some competitors for risk management.
EasyMarkets Has The Best Risk Management Features
easyMarkets received the maximum score for risk management as they offer minimum balance protection for all traders and guaranteed stops as standard. They also offer another risk management tool as standard called dealCancellation. This tool when activated once a trade is made allows a trader to cancel their trade within 60 minutes without any losses.
Risk management tools such as dealCancellation come at a cost with increased fees, commissions and in some cases both. This is why ecn Australian forex brokers like IC Markets don’t offer them. If your new to forex trading though or are concerned about trading with leverage and the risks that it raises, then it may be work considering easyMarkets.
Weakness 2 – IC Has Average Research
IC Markets offers some research support when forex trading including:
- Their blog offering fundamental and technical analysis
- Content from 3rd parties
- An economic calender
- Myfxbook news headlines
- ZuluTrader social copy trading
- FX Blue LLP Advanced Trading Tools
Outside of these features our IC Markets review found the forex broker doesn’t offer advanced research features such as new headlines and pattern-recognition tools.
Weakness 3 – IC Markets Has No Joining Bonus
IC Markets has no joining bonus unlike many other forex brokers. These range from matching deposits to Qantas frequent flyer points. While joining a forex broker just for a bonus is never recommended, it can help justify the transition from one forex broker to another.
Conclusion Of This IC Markets Review
IC Markets is one of the larger Australian forex broker firms thanks to their strong offering in several areas including their spreads, commissions, forex trading platform, leverage and trading tools which led to the following recommendations:
Beginner Forex Trader
Those new to currency trading should consider the IC Markets standard account but with a lack of management features, this may not be the best forex broker for them. A recommended forex broker may be EasyMarkets which offers features including dealCancellation, guaranteed stops and negative balance protection.
Experienced Forex Traders
Advanced traders with a risk appetite that matches the 500:1 leverage of IC Markets should consider the True ECN account. This account offers ECN spreads, leverage of just $3.50 per lot and the MT4 forex trading platform. With many advanced MT4 trading tools this is the strongest niche for IC Markets.
Forex Trader Scalpers
Those looking to use scalping strategies on currency markets should consider the cTrader account. With $3.00 per USD $100k traded commission combined with ECN spreads, the use of cTrader and fast execution speeds through Equinix LD5 facility, this forex broker has tools required for scalping using C# programming language.
Other Facts About IC Markets
IC Markets is a regulated broker that is governed nationally under the AFSL licence number 335692 . This means there is no need to worry that IC Markets might be a scam company. They have a large list of clients both retail and institutional that can guarantee the company’s credentials. They have a sound financial background and are committed to protecting investor, consumer and creditor interests.
Why Is Australian Regulation Important?
Australia boasts some of the strictest and most robust financial regulations in the world. The laws that govern the finance industry dictate the state of play to any company offering financial products, services or advice to consumers. In order to promote integrity, encourage business and keep the market ticking along nicely, financial services companies, including Forex & CFDs brokers are heavily regulated. This ensures your deposits are 100% safe as they’re held in segregated bank accounts so companies like IC Markets Australian Forex Broker review cannot invest or earn a return on your hard earned in the meantime. Ultimately, it pays to trade with an Aussie broker like IC Markets.
Customer Service Levels
Considering that IC Markets is one of the biggest broker trading companies one would think that their customer service would be slower, but contrary to this, their customer service is quite satisfactory. Traders can reach them through different channels like email, Skype or by phone. What is amazing is that their response time is within 15 minutes and traders can expect their problems solved within 24 hours. The company is also dedicated to their educational centre (video journals and articles) which is great for those who have no previous knowledge in trading.
About Compare Forex Brokers
This forex broker comparison and IC Markets Australian Forex broker review was conducted on March 25th 2018 based on resources collected from forex broker websites. In case you have any suggestions for changes please contact us through the contact form on our website.