CMC Markets Forex brokers are one of Australia’s oldest traders with 20+ years experience.
When comparing them to other brokers we found:
– Average spreads & fees
– Excellent customer service
– Market leading guaranteed stops offering
– Market leading leverage
– A unique trading platform
What Spreads Does CMC Markets Forex Offer?
The table below shows the minimum and typical spreads for the week commencing 18th of June 2018.
CMC Markets forex spreads are very competitive against other forex brokers ‘standard’ accounts, but can be higher than ECN providers such as Pepperstone & IC Markets. These brokers offer other accounts that have minimal spreads but instead charge commissions which in most cases lead to lower overall fees for Australian forex traders.
An example is a trader buying 1 lot of AUD/USD at 0.703. A ‘standard’ account will pay approx 1 pip which will be 10USD (approx $14 AUD). An alternative is an ECN account like Pepperstone’s Razor account where the client pays only a commission which would be $7 AUD. This lower amount highlights the advantages that ECN providers can provide.
How Does CMC Forex Stop Losses Help Traders?
Due to the leverage (discussed later in this review) required for currency trading there is risk associated with forex trading. The largest risk occurs when ‘slippage’ occurs which is when in turbulent markets a trade can only be closed at a rate beyond what a trader wanted it filled as (or using a standard stop/loss). In some circumstances, this mean mean that a loss exceeds a clients deposit and may require them to pay the forex broker to make their balance come back to zero.
One measure that removes the risk of slippage is a guaranteed stop loss that CMC Markets. This means that you can’t lose more than a predefined amount at a set price irrelevant of market fluctuations. One of the key reasons that CMC can offer this feature is because they are a market maker (like ThinkForex and GO Markets). In simplistic terms, a market maker is similar to a bookmaker who will match your currency pairing when trading forex. Due to this, they can more easily offer guaranteed stops to clients without the risk of large losses.
The negative of guaranteed stops however, is that CMC Markets forex costs increase as opening this feature sets a premium price of trading which can add up for regular traders.
As the screenshot of our best forex broker chart above highlights, Pepperstone doesn’t offer guaranteed stops. Instead they offer ‘no negative balance’ which means that if the market moves in the wrong direction, you can’t lose more than your deposit. This means that in effect, you could deposit in a Pepperstone account only the amount your willing to lose and then trade knowing you have a safety barrier. This doesn’t require a premium price and is popular with more sophisticated traders.
What Level Of Service Does CMC Forex Offer?
One of the strongest features of CMC Markets forex offering is their service. Last year they received the award ‘best investor education’ from Shares Magazine. This is voted by readers and show that actual traders find CMC service levels to exceed those of other traders like Axitrader and IG Markets.
A key element of CMC Markets forex service levels is the continual ability for traders to provide feedback. Even within their trading platform you can provide feedback using a designated window which sends the message directly to the head of product development.
Hours Of Customer Service
CMC Markets forex consultants can be contacted 24 hours a day from Monday to Friday. There is phone and e-mail support for forex traders and there is also forums which can assist with common issues Australian forex traders may be faced with.
There are four key ways the CMC Markets forex education is delivered.
CMC offers full day education webinars focusing on strategy providing the key elements to technical elements. They also provide two trend following strategies and other factors that may assist Australian forex traders when trading on the market.
2) On Demand Videos
Five minutes a day trading by Michael McCarthy is CMC Markets forex video that is provided for their traders. It focuses on monthly campaigns that focus on short bursts in the market that can be followed live in real currency markets. It also focuses on traders taking advantage of risk management tools, mobile technology and time based signals.
3) CMC Markets Blog
The blog focuses on real opportunities within currency markets and focuses on ‘whats hot’ when it comes to trader popularity. The blog updates several times a day and provides insights, trade setups and strategies from experienced market analysts. It is considered one of the best forex broker resources in Australia.
4) Trading Smart Series
CMC Markets trading smart series is a series of guides that provide trading strategies for Australian forex traders. They are free and you don’t even have to be a regular CMC Markets forex trader to have access to them.
Leverage offers By CMC
CMC offers the highest level of leverage of Australia’s best forex brokers at 500:1 (also know as a margin of 0.20%).
Having a high leverage level is critical to many Australian forex traders strategies but novice traders need to be aware that it enhances the risks of currency trading. An example of leverage is that a $750 deposit can lead a total of $375,000 to be traded on currency markets. A movement of just 0.1% when using this maximum leverage would mean either making $375 or losing $375 or in percentage terms, a profit of 50% or loss of 50%. Obviously, currency markets can move by larger percentage figures than 0.1% which highlights the profit potential and risks associated with high leverage trading.
We therefore recommend only those that can afford the high risk of losing money rapidly due to leverage trade with a high leverage product. Those new to trading should consider using CMC Markets guaranteed stop loss technology, lower leverage or choosing Pepperstone instead due to their no negative balance guarantee. We recommend training with CMCs free demo account until you have the understanding and knowledge ensure risks trading with high leverage are minimised.
Other CFDs offered
CMC Markets are more than just a forex broker. Their trading platform is set up so you can trade cfds such as shares, treasuries, commodities and indices. In addition to online trading via their website, CMC also have two trading apps for your mobile. These apps are the CMC Markets Stockbroking app (for share trading) and CMC CFD Trading app (for other CFDs_. CFDS are complex instruments so it is a good move for the financial services provider to have separate apps for each type of financial instrument.
CMC Markets Asia Pacific Pty Limited is authorised to provide derivative products with licence AFSL No. 238054. They are authorised and regulated by the Australian Securities and Investment Commission (ASIC). These means you can have faith that CMC is a legit broker and can ensure investors do not lose money due to unprofessional practices.
CMC Markets Forex is a solid broker with key strengths in customer service, leverage and the offering of guaranteed stop losses. The key weaknesses are typical of a ‘market maker’ broker which only offer average spreads and slower execution speeds. It’s recommended to view our best forex broker comparison table first before deciding if CMC Market meets your trading needs.