FXMTF is an Introducing Broker to LMAX. As you may know, the term MTF stands for Multilateral Trading Facility, essentially what the LMAX exchange is. This is mechanism of matching orders is similar to an ECN, but slightly different. We would not get into the details, for the purposes of this review.
The Company. Security of Funds
Company Country Regulation
PK Investment Services Ltd. UK N/A
FXMTF is owned and operated by PK Investment Services, which is registered in the United Kingdom. The company itself is not regulated by the local financial watchdog – the FCA. That being said FXMTF is only an Introducing Broker (or IB) of a well regulated company. This is a rather normal procedure for IBs, as they do not keep client’s money, but just offer their clients a contract with the major brokerage.
Regulation is key for us, when reviewing forex brokers. Unregulated (often times off-shore) companies can be scammers, who don’t allow clients to withdraw their funds. This is why most countries have some sort of agency, which regulates the financial services sector. In the UK, this is the Financial Conduct Authority (FCA). It enforces many rules upon forex brokers, who are registered with it. One of these rulings is the implementation of segregated accounts, meaning the company can not freely access the funds in a client’s trading account. This prevents the most basic form of fraud – the broker simply taking your money and leaving you only with a “virtual balance”. The second major rule is the mandatory participation in a compensation scheme. This is a system, which forces brokers to set aside a small portion of their profits in a common fund. It later serves as an insurance policy, to protect all clients against their broker going bankrupt. If you trade with a firm, overseen by the FCA, your account will be safe, up to GBP 50, 000 if the firm happens to go under.
As mentioned in the beginning, FXMTF is an IB to LMAX. Although FXMTF is not regulated, your deposit will go directly to LMAX , which is an FCA regulated company. That being the case, you may ask yourself, well why shouldn’t I create an account directly with LMAX? The thing is FXMTF offers slightly different conditions, the most notable of which is the lower minimum deposit.
Minimum Initial Deposit
FXMTF requires $1,000 as the first deposit. This is way out of line, when compared to what other brokers demand nowadays. XM for instance only demands $5, as a way to attract less experienced traders. On the other hand a professional account, directly with LMAX can not be opened if you deposit less than $10,000, so FXMTF’s offer is quite reasonable in that regard.
It is perfectly ok to start trading with a small account. There is no shame in willing to risk less money when you are learning the ins and outs of trading. More experienced traders will know, that trading with a smaller account just isn’t worth the time, money and mental efforts.
Average spreads & Commissions
FXMTF’s trading costs are unclear at first glance. The company offers access to one of the best liquidity pools in the world, where the spread on EUR/USD is often below 0.4 pips. That being said, commissions are always added in the mix, due to the MTF model. FXTM claims they can offer lower commissions than the ones offered directly by LMAX. This is theoretically possible with them having a bulk discount agreement. Overall, we can not assess how good the conditions are, simply because they are not set out clearly. On the other hand, you can view a real-time comparison of what other leading brokers are offering here.
Furthermore there is an inactivity fee. If you do not meet the required trading volumes for six months, you would be charged $50 per month.
The maximum leverage at FXMTF is capped at 1:100 for the major currency pairs. This is perfectly fine, if you plan to trade in a responsible way. That being said, brokers nowadays offer even higher leverage ratios.
Keep in mind, higher leverage may not be better for you. What a bigger ratio allows you to do, is to take bigger positions, with less capital in your account. This can lead to a small move against you, have a significant impact on your account. Please familiarize yourself with all the risks involved with margin trading, before participating in it.
When it comes to trading platforms, FXMTF offers a variety of solutions. One of them is the web-based LMAX platform. It is an overall solid choice, despite some limitations. We have seen better charting packages and more intuitive overall designs.
The LMAX mobile platform is also available. It is a solid choice, which gets the job done, although we doubt anyone will use it for serious technical analysis (not that that is the point of a mobile platform).
Furthermore the MetaTrader4(MT4) platform is available. This is a popular choice for many brokers, as it has proven itself over time. It is also the most popular platform in the world, which has led to the development of many new technical indicators automated trading systems (or Expert Advisors, as they are called). The platform also has mobile versions for both iOS and Android, which match-up pretty fairly to LMAX’s proprietary offering, in our opinion
And if this wasn’t enough for you, further options are provided. They include payed platforms like PTMC and MultiCharts. These are definitely aimed at the more advanced traders, with many subtle, but precious features. For instance, the lack of multiple monitor support in MT4 is something veterans often complain about. A few more order placing options also help paint a nice picture, which of course comes at the appropriate cost.
Methods of Payment
FXMTF only offers the traditional payment methods: Bank Transfer and Credit/Debit Card. Nowadays lots of people prefer using e-wallets, such as Neteller for online transactions, but this will not be possible with this broker.
FXMTF is an Introducing Broker for LMAX. The company is not regulated, but this is not a big issue, since your funds will go directly to LMAX. The business model relies on receiving a discount on the commission charged by the Multilateral Trading Facility (i.e. exchange). However, no clear conditions are presented on FXMTF’s website. Thus we can not compare their offer to others. We believe the conditions may be negotiable on an individual basis, depending on your account size and trading volumes. The minimum deposit is relatively high, but still lower, than what a professional account at LMAX requires. Overall this is a company, only seasoned traders should do business with.
FXMTF Review Conclusion
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