Solid CFD is a broker which offers trading, via a platform, similar to the ones provided by binary options brokers. That being said, their offering is an interesting hybrid.
The Company. Security of Funds
Company Country Regulation
LOK Marketing LIMITED Vanuatu VFSC
The company behind Solid CFD is called LOK Marketing LIMITED. They are registered in Vanuatu and regulated by the local Financial Services Commission (VFSC). This immediately raises a red flag. While this broker may be operating legitimately, the risks involved with off-shore brokers are still present.
Just in case you are not familiar with financial regulation, we must reiterate its importance. When dealing with an unregulated (or loosely regulated) company, one can never be sure about the security of his funds. This is why most countries regulate the behavior of financial services providers, via specific agencies, commonly referred to as “watchdogs”.
One such regulator is the UK’s Financial Conduct Authority (FCA). It requires companies to frequently submit reports on their activities and more importantly follow certain rules. As an example, this watchdog requires brokers to participate in the Financial Services Compensation Scheme (FSCS). This is a mechanism which guarantees clients’ funds (up to £50,000) in case their broker goes bankrupt. Additionally all of the money deposited in personal trading accounts must be kept in the so called “segregated accounts” – special bank accounts which can’t be freely accessed.
While the VFSC regulation is better than nothing at all, the main condition for obtaining their licensing is having $2,000 in capital holdings (compared to €750,000 at the the aforementioned FCA). At this point you probably understand our concerns with off-shore companies.
Minimum Initial Deposit
Solid CFD requires $250 as a minimum investment. This may not seem like a lot for some of you, but nowadays the industry accepts even smaller clients. Brokers like FXTM, have lowered their entry conditions in order to appeal to more and more people. There you can open a cent-account after depositing only $5.
It is worth pointing out, that one should only trade with money she can afford to lose. There is absolutely nothing wrong with starting out small.
Average spreads & Commissions
The costs of trading at Solid CFD are not revealed on the website. We are used to brokers giving this information willingly in a very visible section of their page. While testing the trading platform, we saw a 3 pips fixed spread on the EUR/USD pair, the most liquid forex pair. Even for fixed spread standards, this is a high level. As a comparison, easyMarkets offers a 1 pip fixed spread on the most popular pair, to those clients who deposit more than $250.
Additionally, variable spreads can even go lower. For a full analysis of the offers, provide by some of the top-notch brokers, you can to this section.
The maximum leverage at Solid CFD is 1:300, as disclosed by their trading platform. This level is in the middle of what is currently available on the market. While 1:100 is considered a conservative ratio nowadays (but was standard a couple of years ago), 1:500 is popular,
We must warn you, trading with a high leverage ratio can lead to substantial losses. Some industry analysts even claim misusing high “gearing” is one of the leading reasons for the losses experienced by new traders.
Trading at Solid CFD is provided via a modified version of the popular binary options trading platform SpotOption. This may seem counterintuitive to traders, who are familiar with other industry leading solutions, like MetaTrader4 (MT4), the most popular forex trading platform.
It clearly has the feeling of a binary options software. Charting doesn’t come close to the expectations of even not so-sophisticated analysts. On the other hand the entire trading process is “reversed”. One has to pick the amount of money he is willing to risk, his leverage ratio and profit target. While some people experienced with binary options may find this more intuitive, it prevents you from picking the actual stop-loss level. Most trading systems require doing the calculations the other way around – you first determine your stop-loss and take-profit levels (on the chart) and then enter with the appropriate size for your trading account.
The Solid CFD platform is surrounded by two columns on the website. One provides a twitter feed, while the other has recent analysis done by company representatives (or third parties). Its one fatal flaw is the fact news bulletins pop-up on top of the trading platform.
While the content of this post appears to be fine, it basically defies its purpose – encouraging clients to trade.
Methods of Payment
Solid CFD lists credit/debit cards as the method of payment. The absence of e-wallet support, while not necessarily troubling, will prevent some potential clients from hopping aboard. Nowadays, Skrill and Neteller are popular among traders.
Solid CFD is an off-shore forex and CFD broker. The company is registered in Vanuatu and overseen by the local VFSC (notorious for its loose standards). The interesting thing about Solid CFD is their trading platform, which appears to be a mix between binary options and spot trading. While we don’t find it very appealing as it does basic risk management in reverse, beginners may. That being said the costs of trading at this broker are very high.
SolidCFD Review Conclusion
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