‘Top 3’ Strengths And Weaknesses Pepperstone Review
Pepperstone is an Australian based forex broker operating across several countries.
Our Pepperstone review completed in April 2018 found the following:
- Forex trading platforms (MT4 and cTrader)
- Low fees (ECN spreads and commissions)
- Customer service (Award winning)
View the in-depth Pepperstone review below where each factor is analysed and compared to the leading online forex brokers.
Strength 1 – Pepperstone’s Forex Trading Platforms
Pepperstone offers the two most popular forex trading platforms:
1) MetaTrader 4
MetaTrader 4 (MT4) is the most popular retail foreign exchange platform released in 2005 offering:
- Mobility – trading can be done seamlessly between a desktop, tablet to mobile app.
- Security – MetaTrader 4 information between the terminal, trader and platform server is encrypted. The 128-bit key encryption can also be enhanced further based on an asymmetric encryption algorithm (RSA).
- Multifunctionality – algorithmic trading through their MQL4 allows users to create or use a robot or personal advisor of any complexity. Combined with this is a free built-in store and free code base library for those new to automation.
cTrader is the most popular advanced forex trading tool with the Pepperstone cTrader review findings:
- Algorithmic Trading – cTrader offers cAlgo allowing C# language and .NET framework bot programs to execute trades based on indicators.
- Charts – there are three charting modes to get different visualisations of currency trends. These are single-chart, multi-chart and free-chart.
- Market depth indicators – market depth can be viewed through standard, price and VWAP depth allowing traders to understand market liquidity.
Pepperstone’s Platforms Has The Fastest Execution Speeds
Pepperstone offers the EDGE environment offering the superior forex trading platform execution speeds critical for currency trading (including Expert Advisors). This EDGE forex trading platform environment is approximately 12x faster that other online forex broker platforms.
The EDGE environment is a combination of ten optical fibres connecting the MetaTrader Master Server directly to Bank Servers. This helps minimise latency helping reduce slippage and achieve optimal fees for Pepperstone clients. This technology has also been build to provide a stable environment with a redundant backup capacity.
Smart Trader Tools
For those fx traders that choose the MT4 platform with Pepperstone get the added benefit for Smart Trader Tools. The Smart Trader Tools package are apps designed for beginner to experienced currency traders to assist in decisions, alert, trade management and execution. This includes technical analysis tools which can assist with identifying trends that may pose an opportunity in currency markets.
Overall, the combination of offering the best forex trading platforms with the best technology to maximise execution speeds is why Pepperstone received the maximum score in this area.
Strength 2 – Pepperstone Has Low Spreads And Fees
Pepperstone has four forex trading account of with their Razor account been the most popular based on:
- Forex spreads starting from 0.0 pips
- Fixed commission of AU$3.5 per 100k traded
- Minimum opening balance of AUD $200
Pepperstone Razor Review Of Spreads
Razor provides an ECN forex broker trading environment. This means that foreign exchange traders have direct access to deep inter-bank liquidity from hedge funds, banks and other financial institutions. The Edge infrastructure enhances this environment allow
Average Spreads of Razor as reported by Pepperstone on the 04/04/2018 include:
- AUD/USD = 0.27
- AUD/JPY = 0.46
- EUR/AUD = 0.39
- EUR/GBP = 0.39
- EUR/JPY = 0.41
- EUR/USD = 0.16
- GBP/USD = 0.49
- USD/JPY = 0.25
- USD/SGD = 1.08
Razor Has PPI (Pepperstone Price Improvement)
Currency markets have the ability to fluctuate rapidly in times of high market volatility. When prices move in a Pepperstone’s clients advantage when they are making a trade the PPI technology can fill the order at the improved level.
The Pepperstone Razor customer places a trade through MetaTrader 4 or cTrader.
The market moves in the clients favour producing a more favourable price between when the trade is placed and when the trade is executed.
The PPI technology identified the improved pricing and fills the trade at this improved level. This doesn’t require a re-quote, rather just filling the order at the improved level.
Overall, the ECN broker spreads, low commissions and PPI technology were the key reasons for Pepperstone having the maximum scores when it comes to low trading costs.
Strength 3 – Award Winning Customer Service
Our Pepperstone review found the foreign exchange offered excellent support through their Melbourne, Shanghai, Dallas, Bangkok and London office. Which office depends on the location of the forex broker and the time of the day. Support is offered through:
- Pepperstone Live Chat
- 24 Hour Phone Support
- E-mail Support
The strong support offered is backed up by Investment Trends which conducted a survey of 13,000 traders. The research found Pepperstone had the strongest rating in eight categories including best customer service and client satisfaction.
The Pepperstone customer service and satisfaction levels are backed up by third party sites which as of the 8th of April rated Pepperstone an 8.2 from 346 reviews. There are many of financial services review websites which also support Pepperstone’s customer service both within Australia and abroad.
There is support through the Pepperstone forex trading platform such as MT4, over the phone, live chat or via e-mail. Support is 24 hours during the working week. The focus of the experienced support team is to provide assistance to meet your trading goals, not just to execute a transaction.
Pepperstone also offer active traders with a dedicated account manager (similar to what they offer institutional partners). A Pepperstone dedicated account manager works with traders and their network to provide support and strategies to help achieved trading goals. These are dedicated managers are experienced and not aimed at training those new to currency trading.
Weakness 1 – Advanced Risk Management Tools
Currency trading is a leveraged product. In the case of Pepperstone the leverage is the highest of the mainstream fx brokers at 500:1. Leverage is critical of many trading systems including expert advisors (scalping) offered by MetaTrader platforms.
High leverage leads to higher risks involved when forex trading. For example, just a 0.1% decrease in a currency pairing at a maximum of 500:1 will lead to a loss of 50%. Understanding the risks involved with forex trading is critical but there are risk management tools that can help limit the exposure including:
1) Negative Balance Protection
Negative balance protection means that the forex broker avoids a currency trader’s losses from exceeding their deposit. While Pepperstone has a negative balance protection automated risk management system, it doesn’t guarantee a negative balance will be reached. While the software should pull the trader out of the market, those that need a absolute certainty this will not exist may need to consider a different fx broker.
2) Guaranteed Stops
Pepperstone offers a:
- Market Order/Execution
- Limit order
- Trailing stop
It doesn’t offer a guaranteed stop loss facility which ensures a trader exist the market after a specified maximum loss amount is reached. Those that require certainty for each trade many need to consider a forex broker offering this feature.
3) Deal Cancellation
This feature is only available from EasyMarkets (formally Easy Forex) allowing tx traders to cancel a position within 60 minutes of placing the order without making the potential loss. There is a premium though for using this feature.
Weakness 2 – No Share Trading
Pepperstone has always focused on becoming the premium CFD and online forex broker worldwide rather than an all-in-one financial institution. This has meant the foreign exchange broker doesn’t offer traditional share trading unlike some of it’s largest competitors.
Instead, the fx broker offers:
- Index CFDs
- Precious Metals
- Soft Commodities
When it comes to the Pepperstone Cryptocurrency offering, there four that can be traded with a 5:1 leverage.
1) Pepperstone Bitcoin
Bitcoin has a market capitalisation of over USD $100 Billion dollars based on Coin Market Cap giving it the highest cap of any cryptocurrency.
This mainstream cryptocurrency is the most traded in it’s class providing the highest opportunity for trading Pepperstone Cryptocurrency with leverage.
2) Pepperstone Ethereum
Currently with the second highest market capitalisation of the cryptocurrencies (just ahead of Bitcoin Cash), Ethereum serves a large number of industries.
These include blockchain application platforms and smart contracts. It’s high usage has provided volatility and high turnover compared to Pepperstone Bitcoin fluctuations.
This cryptocurrency’s full name is Digital Cash and focuses on improving the features of Bitcoin increasing enhanced anonymity and speed.
Dash has been adopted as an efficient and effective payment system maximising liquidity and it’s market capitalisation.
Litcoin was founded in 2011 to provide a Bitcoin alternative. With a simpler block generation algorithm, transactions speed can be greatly improved.
This speed enhancement has maximised adoption and also led to volatility within the marketplace over 2017 and 2018.
While these CFD options are great for trading, if you’re looking for a share trading account, then the main trading account comparison table should be reviewed to find an ‘all-in-on’ financial institution.
Weakness 3 – Pepperstone Doesn’t Offer MT5
While Pepperstone offers the MetaTrader 4 forex trading platform, it doesn’t offer MetaTrader 5. This version is offered by MetaQuotes Software Corporation five years after MT4.
MetaTrader 5 is not an improved version of MetaTrader 4, rather it has focused on different programming language called MQL5 to trade on centralised markets such as commodities and shares. While foreign exchange is a decentralised market which MT4 caters for, the centralisation of these markets (eg stock-market) with strict legal processes is why MetaQuotes created MT5.
MT5 was also designed for the USA market due to their ‘no hedging rule’. The forex trading platform focuses on the First In, First Out FIFO requirement and aggregates all positions unlike MT4 which has them separately. Forex traders outside of USA normally opt for MetaTrader 4 as it allows hedging (automation) as they are not confined to US regulation.
Two strengths of MT5 is the speed of back testing and simultaneous multi-currency back testing. This can speed up the testing of strategies based on real past currency movements. The issue again is that once in a live environment it won’t allow hedging strategies.
Overall MT5 Thoughts
MetaTrader 5 was created to attract USA forex traders and non-currency trading. If your located in the US or looking to mainly trade non-currency markets than you may want to try a different broker. Otherwise, Pepperstone and MT4 will meet your forex trading needs.
Final Thoughts On Pepperstone
Pepperstone is the ideal forex broker for intermediate to expert traders with a high-risk appetite based on five key factors:
- Choice of MT4 or cTrader Platforms
- Fast execution speeds
- 500:1 Leverage
- Low fees and price improvement technology
- Award winning customer service including Pepperstone Live Chat
Low risk traders that are often new to forex trading may want to review the trading platform fx comparison table. There are forex brokers that have advanced risk management tools for these traders but also higher trading fees. While this won’t be suitable to advanced traders or those using automation (including expert advisors) it may be suitable to this segment.
Additional Pepperstone Broker Review Information
1) Pepperstone Group Is Regulated By ASIC
Pepperstone Group is based out of Melbourne Australia and is regulated by ASIC which requires:
- Client deposits to be segregated
- Minimum training standards be met
- Capital (solvency) requirement
- Regular auditing of account
- Conflicts of interest management
The fx broker in the UK is regulated by the United Kingdom Financial Conduct Authority.
2) Pepperstone Uses National Australia Bank (NAB) To Segregate Client Accounts
As discussed previously, forex brokers are required to segregate client funds. Pepperstone chose one of Australia’s largest banks (National Australia Bank) as the nominated account where segregated client trust accounts are held.
The National Australia Bank has over $500 billion Australian dollars in assets held. As one of the ‘Big 4’ Australia banks they are also eligible for the Guarantee Scheme providing further assurance for Pepperstone clients funds.
The bank has more than just retail clients with investment managers, insurance companies, superannuation funds and government institutions.
Initial Deposits and Pepperstone Withdrawals
The Pepperstone minimum deposit is $200
Withdrawals must be made through forms which when received prior to 7:00am (Eastern Standard Time) will be processed that day. Any form received after this time will be processed the following business day. They can be withdrawn to:
- A bank account in a join or same name as the trading account
- A credit card when the deposit was made that way (it can’t exceed the deposit amount)
- A International Telegraphic Transfer to overseas accounts which typically have a $20 fee and can take 3-5 working days.
Funding Method 1 – Bank Transfers
There are two ways to make a transfer for deposits to Pepperstone.
The first is POLi-Pay which allows instant transfers 24 hours, 7 days a week. This is like a credit card with transactions been near instant but through a bank account. The down-side of POLi is that it’s an Australia client service only. Overseas bank accounts won’t allow POLi transactions. There are no fees charged through POLi.
The second options is a traditional bank wire transfer. This can occur across most currencies and on average can take a business day from Australia accounts while several days for international transfers. Pepperstone doesn’t charge bank-wire fees but some institutions (mainly overseas) main have their own fees and charges. This can also be used for withdrawals unlike POLi.
Funding Method 2 – Credit Card/Debit Card
Pepperstone allows instant funding from approved credit and debit cards anytime. A range of currencies are accepted across the following cards:
- Visa Debit
Transaction fees can range but on average are 1.8% for Australian Dollar Deposits and 3% for other currencies. There are no fees though if either MasterCard SecureCode or Verified By Visa is selected. An image of the card may need to be uploaded as well to verify it’s physically imprinted to meet AML policies.
Only deposit amounts can be withdrawn back to a credit card. Any profits made need to use another withdrawal method.
Funding Method 3 – Paypal
Paypal can be used for deposits and withdrawals offering flexibility of payments through bank accounts and/or credit cards.
Presently there are no fees associated with Paypal making it a fast and convenient Pepperstone funding method.
Funding Method 4- Instant Funding
There are three 24/7 instant funding methods:
- China Union Pay (Processing Time: Under 15 minutes)
- Skrill (Moneybookers)
- Neteller ($1USD fee for withdrawals)
Funding Method 5 – bPay
BPay allows the transferring of funds from banks to Pepperstone. The processing times range from 12 to 24 hours and must be in Australian dollars. The plus-side of this Pepperstone funding method is that there are no fees. This is method is only for deposits (not Pepperstone withdrawals).
Mobile App Offered By Pepperstone
As discussed above, Pepperstone offer two forex trading platforms. MetaTrader 4 has both an android mobile app and a iPad/iPhone mobile app. The MT4 App for Android® offers live quotes and one-tap execution. Custom views across multiple screens helps access real-time data. Currency traders can also view historical currency market data and CFD data.
The MT4 Pepperstone App for iPhone® offers one-tap execution, live quoting and customisation options. Advanced charting also exits for past currency data allowing analysis of forex when out and about.
Pepperstone offers Qantas points when trading the most popular currency pairs including:
Qantas points can only be earned once a Qantas Frequent Flyer membership is linked to a Pepperstone trading account. Then a trader will earn 10 points for every one lot traded. Each calendar month up to 10,000 points can be earned. Note there is rounding at the end of each month to the closest 0.2 lot.
About This Pepperstone Broker Review
This Pepperstone review was compiled and updated at the start of 2018 by our panel of trading experts. We aim to bring readers only accurate information about the world’s top FX brokers so as to make their trading experience a positive one. Please be aware that sometimes information found on our website may be incorrect.
The fx broker was compared to several other ECN accounts including AxiTrader and IC Markets. Even though we have great attention to detail and our propensity to update reviews and tables is compulsive, mistakes do occur from time to time. Furthermore, brokers tend to update their features every few months. We’re usually on top of all these updates. However, to be 100% certain please validate all information found on our website with broker websites.