Level 2 Forex Review
Level 2 Forex is an ECN forex broker, which provides access to the eFXClould. Trading conditions don’t vary that much for the different account types, except for the offered leverage. The company has not given enough information, regarding some aspects of its services on its website.
The Company. Security of Funds
Company Country Regulation
Level 2 Forex N/A N/A
Level 2 Forex goes not provide any information, which is relevant to its parent company, nor its registration. This would be considered a big disadvantage, had the company not been a partner of eFXClould. That being said, IBs and White Label partners are occasionally under some form of oversight. At this point, we have to treat Level 2 Forex as an unregulated company.
As we keep reiterating in all of our reviews, financial regulation should one of the key things to look for, when looking at a forex broker. Financial regulatory agencies are government institutions, which create and enforce certain rules on companies, offering financial services. Lets take a look at some of the rulings, applied by the UK’s FCA, one of the most reputable watchdogs. First of all, a forex broker must keep its client’s funds separate from its own, via the enforcement of the so called segregated accounts. This prevents the company from using your account, for its own purposes and limits the possibility of fraud. Another key ruling is the mandatory participation in the Financial Services Compensation Scheme (FSCS). This is a system, which forces brokers to set aside a portion of their profits in a collective pool. This then serves as guarantee, in case one of the brokers goes bankrupt. If you trade with an FCA regulated broker, your account would be compensated up to GBP 50,000 in case they go insolvent.
Furthermore, at the time of writing of this review, the account opening page on Level 2 Forex’s website was under maintenance. This may be a temporary technical issues, or the company waiting to receive a license before accepting new clients.
Minimum Initial Deposit
Level 2 Forex requires $500 as a minimum deposit. This is quite high, when compared with most brokers, who require about $100, on average. That being said some go even lower, like FXTM which only demands $5 for a cent account.
Of course, this should only be a consideration for less experienced traders, who are willing to see what real money trading feels like, after months of demo trading. There is no shame in opening a small account, especially if you don’t have enough risk capital, but more experienced traders know a serious trading plan requires serious funding.
Average spreads & Commissions
Trading costs at Level 2 Forex are a bit tricky to calculate. The company offers access to the eFXClould liquidity pool, where the spread on EUR/USD is around 0.8 pips in the most liquid time of the day. Furthermore you must add the commission of $0.04 per 1000 units of currency, per side. This effectively adds up to 0.8 pips, making the total spread starting from 1.6 pips. This is borderline competitive, with many brokers offering similar or slightly tighter spreads. Want to check out their offers in details? Feel free to use our real-time comparison, of spreads offered by some of the leading brokers, which is available here.
Level 2 Forex provides different levels of margin, depending on your account size. That being the case, the gaps between account sizes is fairly large so this seems balanced. The maximum is 1:100, for accounts under $10,000. This is more than enough for any decent trading system, although you wouldn’t get that impression if you follow offers by other brokers, which go to 1:500 and above.
Higher leverage isn’t a better thing for your trading. In fact, it is most often the detriment to new traders, who take bigger positions than they should. Keep in mind, every trading set-up could go against you, no matter how certain you feel about it. Always know how many pips you are going to risk on any given trade, and enter with the appropriate size so that you don’t drastically damage your account if your stop-loss is hit.
Level 2 Forex provides its services via the xStation platform. It feels visually similar to cTrader, but is slightly different. Charts look fairly pleasant to the eye, but keep in mind the tons of custom technical indicators and Expert Advisors, available for MetaTrader4 will not work here. That being said the platform does have its own unique features. One of them is the trading calculator, which allows for easy calculation of the risk you would be taking with certain orders. Although this is pretty much an automated process in the minds of experienced traders, newbies may find it helpful. Furthermore the platform shows the depth of the order book (the actual Level 2), but we have doubts about how useful a feature this is for the decentralized currency markets.
This is a screenshot of the web-based version, but the platform also has mobile apps for both major operating systems and a stand-alone desktop version. We can easily say this is an OS independent platform.
Methods of Payment
Level 2 Forex only offers the standard payment options: Bank Transfer and Credit/Debit card. Users of e-wallets, such as Skrill, would probably be disappointed. Keep in mind bank transfers may take several business days.
Level 2 Forex is a partner of eFXClould and as such provides access to their liquidity pool. The former company is not regulated, while the ladder one is. At the time of writing of this review, the account creation page is not working. This may be the company waiting to receive a license, before accepting customers. Trading conditions are barely competitive, with the 0.8 pips worth of commissions in addition to the spread. The xStation platform may not be everybody’s cup of tea. Overall this is a mediocre broker, but the lack of basic information about the company is rather troubling. We reserve the right to change our review, if any of the circumstances change.
Level 2 Forex Review Conclusion
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