Pepperstone Forex Broker Strengths And Weaknesses
The 5 key strengths of Pepperstone are there:
- Leverage up to 500:1
- Low ‘ECN’ spreads and commissions
- MT4 and cTrader forex trading platform
- Award winning customer service
- No fee payment methods
The 5 weaknesses on the other hand are there:
- No guaranteed stops
- No minimum balance protection
- No share trading
- No MetaTrader 5 platform option
- A minimum deposit of $200USD
View below detailed Pepperstone review where each of these strengths and weaknesses are examined and comparisons are made to other brokers.
- Strength 1 - Leverage
- Strength 2 - ECN Spreads + Fees
- Strength 3 - Trading Platform
- Strength 4 - Customer Service
- Strength 5 - Execution Speeds
- Other Advantages
- Weakness 1 - Guaranteed Stops
- Weakness 2 - Balance Protection
- Weakness 3 - Share Facilities
- Weakness 4 - No MetaTrader 5
- Weakness 5 - Minimum Deposit
- Final Verdict
Pepperstone Strength 1 – High Leverage Forex Trading
Pepperstone offers a forex trading leverage level of 500:1 to Australian forex traders. This means a deposit of $100 can lead up to the equivalent of $5,000 to be traded on the currency markets.
There are other players such as IC Markets, CMC Markets and ThinkForex that offer similar forex trading levels of 500:1 leverage. That said, intentionally 500:1 is considered to be very high, especially considering in many countries there are limits on leverage that are far lower than 500:1.
Who Should Consider High Leverage?
As currency pairings move only small percentages its critical to have leverage. The forex trading level though should be dependent on the experience level of an Australian forex trader and the level of risk that trader is willing to accept. When currency markets experience, traders could lose more than their deposit which they will need to repay over time. For this reason less experienced forex traders should consider lower leverage or choosing a broker that has guaranteed stops.
Pepperstone Strength 2 – Low Spreads And Commissions
Upon Pepperstone review we noticed the company has gained popularity due to the fact there is no dealing desk. This means that Australians can make traders direct with currency markets which is one of the reasons that Pepperstone is able to offer some of the lowest spreads and fees.
There are two types of accounts offered. The first is the ‘standard account’ which has higher spreads but no commission. The spreads such as the range of 1.1 pip – 1.8pip is lower then may other forex brokers such as Go Markets and Easy Forex. The second type is called the ‘razor account’ which has some of the lowest spreads worldwide but there is commission charged.
The Razor edge is often the choice of day traders who have the highest turnover whereas everyday Australian forex traders often prefer the commission free choice of the standard account.
Pepperstone Strength 3 – Choice Of The Most Popular Trading Platforms
Metatrader 4 is the primary trading platform offered by Pepperstone which is regarded as a leader in the industry. The broker’s website is designed to give you a real edge in today’s competitive trade environment by offering the best live quotes, real time charts and in-depth analytics and news feeds from the market. The trading platform has a rich interface and is graphical intuitive. It has all the available trading tools that one can use effectively to control their trade positions. There are around 85 different pre-installed indicators as well as market watch window being available. One can share from multiple trades in a single time and the broker offers real time data export through DDE protocol.
To ensure they remain one of the best forex brokers the release of MetaTrader 5 first by Pepperstone shows again how the fx broker focuses on innovation and bringing the latest software and technology to Australian forex traders. As these platforms plugin to Pepperstone’s no dealing desk solution and through powerful servers, execution speeds are some of the highest worldwide.
Webtrader is the web based version of Metatrader 4 which allows trades to trade fx without installing any program. It works across most operating systems including Linux, Mac OSX and of course Windows. Even though now download is needed, most functionality is kept including real-time charts, indicators and technical analysis. Its built in HTML5 so you don’t need flash or other third party software for it to run.
Pepperstone’s forex platform can also be accessed from iPhone. The trade platform is available on iPhone and iPad devices which means that people can trade even when they are moving from one place to another.
Forex wouldn’t exist without leverage and Pepperstone Australia is considered one of the leading forex leverage brokers for these experienced fx traders.
The fx broker is Aussie regulated too which means all deposits are held in Australia and their currency trading obeys Australian laws and guidelines.
Pepperstone Strength 4 – Customer Service With Live Chat
It has a highly personalised customer support team that is always there for help and sorting out traders’ problems. The broker has a pool of highly skilled professionals as support staff who have all the necessary knowledge and expertise of the market.
While making this Pepperstone best Forex broker review we found the customer care executives are very cordial and friendly when contacted and always prompt in replying to our queries. One can contact the staff at Pepperstone via live chat, dropping an email or talking to them over the telephone. The customer service is available in English over live chat at the present moment with more languages to be added in the near future. Pepperstone offers its own Skype contact which is available on its website which means that traders who use Skype can contact the staff directly without incurring any expenses.
Pepperstone Strength 5 – Execution Speed With Direct Access
Pepperstone’s Razor account offers ECN trading. This means direct access to liquidity pools both in New York for MT4 and London for cTrader. This direct access feature is combined with their edge technology to achieve one of the fastest execution speeds in Australia.
Edge technology includes:
- 10 optical fibre from MetaTrader to bank servers achieving
- 12x improvement in execution speed
- Up to 10x latency reduction
- Pepperstone Price Improvement to deliver optimal prices.
- Dark Pool Liquidity access helping make spreads start from 0.0 pips*.
The combination of direct access and Edge is why Pepperstone was viewed as the equal best forex broker.
Qantas Frequent Flyers
Pepperstone currency traders can earn up to 10,000 Qantas frequent flyer points each calendar month. They earn these on certain trades after they have linked their QFF membership to the account.
Points are accrued at a rate of 10 points per 1 lot FX trade and rounded to the nearest 0.2 lots each month. As an example, if you trade 1.1 forex lots over a calendar month you will get 20 Qantas frequent flyer months. If a trader overall trades is less then <0.10 lots for the moth they wont receive any points.
Types Of Trading The Accrues Points
Qantas frequent flyer points are only available from certain major currency pairings including:
Some minor currency pairings and crosses can also receive frequent flyer points but no points are accrued on cryptocurrency, commodities, futures and indices.
No Fee Convenient Deposit Methods
The Pepperstone payment service is amazing and the broker does not charge any sort of commission on deposits and withdrawals. However, one would have to incur some expenses when money is being transferred from international banking institutions. One can fund their trade accounts using a credit card, electronic wire transfer, MasterCard, FastPay, Skrill, Bpay and other eWallet options. It is to be noted that the same payment mode must be used for deposits as well as withdrawals.
Weakness 1 – No Guaranteed Stops
Pepperstone offer stop loss trading where a trader can pre-determine the amount they are willing to profit or lose on a trade. For example, a trader can set a limit of a loss of $200 on a trade. The forex trading platform (cTrader or MetaTrader 4) will execute this order once a set price is reached.
The key issue with stop losses is that the broker/platform doesn’t guarantee you won’t lose more than the pre-selected amount (termed slippage) This can be due to delays in forex trading execution and/or extreme volatility (which occurs during market events such as interest rate decisions). While Pepperstone is one of the fastest execution speeds slippage can still occur. Only a guarantee stop loss ensures losses cannot exceed the amount stated which some other forex broker offer. If this is a critical feature for you, it’s recommended to consider a different broker.
Weakness 2 – No Minimum Balance Protection Offering
Pepperstone’s two forex trading platforms (MetaTrader 4 and cTrader) have built in out-out systems. This works to close a traders position when they near their balance to prevent them from going into negative balance.
While the software to close positions is fast and accurate, market liquidity and volatility may prevent it from closing positions without additional losses. Extreme market events such as the floating of the Swiss Franc have led traders losses far exceeding their deposit. Only a broker that offers minimum balance protection can prevent this from occurring. Those with a low risk profile should consider such a forex broker.
Weakness 3 – No Share Trading
Pepperstone doesn’t offer the buying of shares on the Australian Stock Exchange. There is the option to trade index CFDs such as:
It your looking for an online stock broker then you may need to use Pepperstone for currency and another provider for shares. A handful of forex brokers though offer both with the same trading platform which may have appeal if you want to do both concurrently.
Weakness 4 – No Pepperstone MetaTrader 5 Offering
Pepperstone offers MetaTrader 4 but there is no Pepperstone MetaTrader 5 option. While MT4 remains the most popular forex trading platform there are advantages of MT5 including:
- Extra charts
- Tick charts including one-tick trading
- 38 indicators (MT4 has 30)
- 68 analytical tools (MT4 has 68)
The main two disadvantages is the lower popularity and no hedging option. This may be why there is no Pepperstone MetaTrader 5 option but based on their website, this is in the pipeline to be provided to traders.
Weakness 5 – High Foreign Exchange Deposit Requirements
Pepperstone requires a minimum foreign exchange deposit of $200USD. Other forex brokers offer lower deposit minimums and combine this with balance protection to ensure you don’t lose more than that amount.
If you’re looking to only trade very small amounts then Pepperstone may not be your best option.
Final Verdict – Who Should Use Pepperstone?
Beginner Forex Traders
Pepperstone is not recommended for beginner traders. Their standard trading account has average spreads, they don’t offer risk management tools such as guaranteed stops and their customer service is aimed at intermediate to advanced traders.
Intermediate Forex Traders
Pepperstone is recommended for intermediate traders as they broker offers MetaTrader 4, low spreads on their razor account and proficient customer service.
Expert Forex Traders
Pepperstone excels for expert forex traders offering one of the highest leverage levels of 500:1, a fast ECN forex trading environment with low latency and low spreads and commissions through the razor account.
Pepperstone Review: Their Brief History
The company was founded in 2010 with its headquarters located in Collins Street, Melbourne, Australia. It is a relatively new broker to hit the market but offers one of the best trading experiences that one desires for. Although it is a chip off the old block, it has a lot of potential in itself and has been offering service in 100 countries across the globe. It is a global FX broker and offers lightning fast ECN trade matching engine making trade executions very fast. The company believes making online trading accessible to individual investors and want to evolve the financial industry by offering the best possible service to its customers. Sadly, the broker does not accept traders from USA owing to some market regulations and legal issues in that country.
In our Pepperstone review we noticed that since the company is a fairly new broker in the Forex industry, its overall asset index is not very extensive. At present it offers trading across 62 different currency pairs and metals. The overall asset is sufficient for the new traders and they will never feel limited in terms of trade. The broker is very committed and has been adding numerous assets under its wings from time to time. In a couple of years from now, we can expect Pepperstone to offer more than 100 distinct assets to its customers. It offers a free demo account to its clients which means that one can practice trade in a virtual environment before they enter the real market.
Pepperstone Uses The National Australia Bank For Segregated Funds
As an ASIC regulated Australian forex broker, Pepperstone is required to segregate clients funds. The broker has stated that this is the National Australia Bank which is one of Australia’s largest banks. The National Australia Bank also has a national network helping achieve fast liquidity movements.
About This Pepperstone Review
This Pepperstone Best Forex Broker Review was completed by real Australians who own and manage Compare Forex Brokers. Our aim is to help Australians compare forex brokers easily with tables constructed based on the best Forex brokers website information. The forex broker comparison was made independently although it should be noted that affiliate relationships may exist but these were formed after the launch of the site. This Pepperstone Review was based both on the information above and the details that can be found in our best forex broker comparison table.