FXCC Review 2022

Trust

FXCC Regulations

When we examine a broker’s regulations, we focus on the licenses issued to its separate entities. These entities usually work with clients from different geographic areas, requiring local authorities’ licensing. We rank the different regulations on a three-tier system, with tier one indicating the highest grade regulation.

This is what we found about the regulations of FXCC’s two entities:

• FX Central Clearing Limited is licensed and regulated by CySEC, which has the highest tier-1 ranking on our system, under CIF license number 121/10.
• Central Clearing Limited is registered under the International Company Act [CAP 222] of the Republic of Vanuatu with registration number 14576. However, the entity is not regulated by the VSFC.

FX Central Clearing’s CySEC regulation means that the entity operates within the MiFID regulatory framework, ensuring the highest protection for clients from the European Economic Area (EEA). This involves segregation of client funds, negative balance protection and leverage of 1:30 for retail traders.

The company’s registration alone does not ensure client funds protection, even though the entity claims to have negative balance protection. This may be true, however, VFSC cannot guarantee it.

We have summarised the most essential aspects of the two entities in terms of regulation and safety on the chart below:

Why Is It Important to Know Where Your Broker Subsidiary (Entity) is Regulated?

Since the 2008 Credit Crunch, governments in Europe and the U.S. have tightened financial regulations considerably to mitigate the risks of future debt defaults. This has prompted some brokers to seek offshore regulations, where governmental oversight is looser.

That is why a licence alone is not enough to protect a trader’s funds with a broker. It is best to select an entity regulated by a tier-1 regulator, ensuring that the most rigorous industry standards are maintained when it comes to safety.

In particular, several aspects of a broker’s profile are worth paying attention to:

• Segregation of client funds from company funds. Realistically, most retail traders do not know where their deposits end up beyond what they can see in their account balance. FXCC’s regulation by CySEC means that a client’s funds are kept separately from the company’s capital.
• Negative balance protection. FXCC has negative balance protection, meaning that the broker reserves the right to terminate any positions that run the risk of incurring losses that exceed the balance. This is particularly important for margin trading with CFDs.
• Compensation scheme. FXCC is a member of the Investor Compensation Fund (CIF), meaning that its clients can be compensated if FXCC is unable to pay what it owes them or faces the risk of bankruptcy. The payable compensation amount may reach up to 20 000 euros.
• Standard leverage. FXCC offers leverage of up to 1:30, meeting industry standards.

Stability and Transparency

In our tests for the Trust category, we also cover factors relating to stability and transparency. Here, we focused on how long the broker has been in business, the company’s size, which indicates the stability of its business model, and how transparent they are in terms of information being readily available.

Having been founded in 2010, FXCC has existed for long enough to indicate that its business model is probably effective and stable. The company employs nearly 40 people.

In terms of transparency, the main web page is easy to navigate, with all relevant data usually being no more than a few clicks away. Information concerning costs and fees is not obscured by highly technical jargon or a mountain of irrelevant filler, which is a ploy commonly implemented by less reputable brokers. We found the ‘Average Effective Spreads’ tool especially useful and informative.

Being an STP broker, FXCC’s business model is rather uncommon in the industry, though more and more brokers go in the same direction. Traders need to be aware of the pros and cons of working with an entity that does not have a dealing desk, and FXCC puts in the extra effort to explain the intricacies of STP trading.

In summary, our findings indicate that FX Central Clearing Ltd can be regarded as having a high level of trust and stability due to the following factors:

• Licensed and regulated by a top-tier body (CySEC).
• Compliant with the highest industry standards.
• As an STP broker, FXCC has an incentive to help its clients succeed.
• All information presented on the website is clear, informative, and straight to the point.

Fees

FXCC charges a spread markup starting from 0.4 pips added to the spread charged by its liquidity providers. As an STP broker, FXCC obtains its liquidity from other financial institutions and banks, which charge their own spreads. That is why retail traders, as the final consumers, have to pay both. At the time of the review, we found the spreads that retail traders pay on an ECN XL account to be competitive.

The only other costs they might face are a commission on silver and an inactivity fee. Beyond that, FXCC’s financial conditions are quite favourable.

FXCC Spreads

We tested the spread on an FXCC XL account during the London open at 8 am UK time and just after the U.S. open at 2.45 pm UK time. These are the most actively traded times, so floating spreads tend to fluctuate most. These were recorded on the 17^th of March.

Based on our findings, we concluded that FXCC’s spreads are low to average. With an industry average of around 2 pips, FXCC’s spread on EURUSD is quite competitive. Meanwhile, the spreads on a major pair such as GBPJPY and gold are below average since FXCC obtains its liquidity from a pool of international banks and financial institutions.

FXCC Swap Fees

A swap fees, also known as a rollover, is the cost of holding an open position overnight. This cost can vary considerably during periods of heightened market volatility. The values listed in the table below are for one full contract (100,000 units) of the base currency. Swap long refers to the charge deductible or credit receivable for holding a buy position open overnight. In turn, swap short relates to the charges/credits deductible or receivable for holding a selling position open overnight.

We documented FXCC’s fees in the table below:

Overall, FXCC’s swap rates exceed the industry average, though this can be attributed to the particular conditions that were prevalent on the market at the time of the review’s writing.

Non-Trading Fees

FXCC charges a 5 EUR/USD/GBP fee for inactivity, also known as a Dormant fee. It applies to accounts that remain inactive for more than 120 calendar days. This charge does not apply if the free balance in the account is equal to zero.

The company does not charge a fee for processing deposits or withdrawals. However, the client may be liable for charges made by the payment providers (third-party) involved in the transfer.

Are FXCC’s Fees Competitive?

We concluded that FXCC’s trading and non-trading fees are competitive for retail and professional traders alike. This is owing to the commission-free trading on most instruments and free deposits and withdrawals. On the other hand, FXCC’s rollover charges are higher than the industry average.

It is also worth mentioning that at the time of writing this review, FXCC’s spreads were higher than usual because of elevated market volatility. Periods of heightened uncertainty generally drive prices up, which is what causes FXCC’s liquidity providers to raise their spreads as a consequence.

Platforms and Tools

We tested the performance of the platform on MT4’s desktop and mobile app versions, focusing on the quality of the charts, availability of drawing tools and indicators, and general ease of use.

MetaTrader 4 is a bit rough around the edges, and it takes some time to learn where everything is. Even still, all essential charting tools are present, and the platform can be used to carry out detailed and intricate technical analyses.

Trading on MetaTrader 4’s Desktop Version

General Ease of Use

Even though there are newer versions of the household name, MetaTrader 4 can accommodate the needs of inexperienced and seasoned chart artists alike. Still, the platform is quite complex and beginners may need some time to get used to it at first. Nevertheless, finding a particular instrument and extracting vital information about it, such as spread size, minimum position size, or swaps takes only a few clicks.

As an STP broker without a dealing desk, FXCC does offer fast execution, which complements MetaTrader 4’s simplicity and flexibility perfectly. Traders can thus benefit from the two by reacting promptly to changing market sentiments and catching a new opportunity at a moment’s notice.

Charts

MetaTrader 4 contains some of the most commonly used tools needed to examine the price action of any given asset. We have listed some of those available to FXCC’s clients on the platform:

• Chart options. Traders can augment their charts based on their personal preferences. They can choose between bar charts, line charts and candlesticks. The platform offers 9 different timeframes.
• Trading indicators. Some of the more popular trend indicators available on the platform include moving averages, Bollinger bands, ADX and others. Among the oscillators, it incorporates the MACD, RSI, DeMarker and others. Other popular indicators include the Gator oscillator, Money Flow index, and others.
• Drawing tools. This is where you can get really creative. You have under your disposal different trend lines, parallel channels, Fibonacci retracement levels and fans, Elliott waves, and others.

Orders

Traders can either open simple market orders at the spot level or place the more intricate limit orders at a different price level. The platform also offers classic stop-losses as well as trailing stop orders. Those are used to limit the overall risk while leaving the profit potential of the underlying position uncapped.

The platform also offers expiry orders, which can be used for protection against the unpredictability of the future. If certain conditions aren’t met by a specific time, the order will be closed.

FXCC Mobile App

FXCC’s mobile app has the same functionality as the desktop version but it’s more difficult to use. This is owing to a problem that is inherent to most such apps. A comprehensive technical analysis is best carried out on screens with high resolution, which is quite difficult to do on a typical smartphone. The app, however, has its essential benefits, particularly when you need to adjust your positions while on the go.

FXCC clients can download MetaTrader 4 on their smartphones and tablets. The software runs on iPhone, iPad (ios) and Android devices. We have conducted our test on an Android device.

General Ease of Use

The app offers most of the same features available on the MT4 desktop version, though they are compressed and altered for smaller screens. The ease of use inevitably suffers when a technical analysis has to be conducted on a lower resolution smartphone. Nevertheless, the app is still useful for quick checks on the account’s performance and possibly making changes to the open positions on the go.

Charts

The charts on the mobile version are informative and sufficient, yet they are cramped and more difficult to navigate compared to the desktop version. The mobile version includes most of the tools and indicators available on the desktop version:

• Chart options. Traders can augment their charts based on their personal preferences. They can choose between bar charts, line charts and candlesticks. The platform offers 9 different timeframes.
• Trading indicators. Some of the more popular trend indicators available on the platform include moving averages, Bollinger bands, ADX and others. Among the oscillators, it incorporates the MACD, RSI, DeMarker and others. Other popular indicators include the Gator oscillator, Money Flow index, and others.
• Drawing tools. This is where you can get really creative. You have under your disposal different trend lines, parallel channels, Fibonacci retracement levels and fans, Elliott waves, and others.

Orders

Order execution follows the same inherent logic and can be conducted just as fast. However, regardless of how comfortable trading from your smartphone gets, this sense would always be at least partially misleading. Trading should always be conducted with the greatest amount of care possible, yet it is difficult to apply the same level of caution when using your phone.

Nevertheless, the mobile app can be an indispensable asset when you need to make emergency interventions, such as terminating a losing trade when you cannot use your desktop version.

Tradable Instruments

Due to the lack of diversity, FXCC’s instruments score is low. And while it is true that the Advanced XL account entails over 200 tradable instruments, with a minimum deposit requirement of 100 000, these instruments will be unavailable to most traders.

What Are CFDs?

CFDs are financial derivatives used for trading on margin. To put it simply, they allow traders to speculate on the price action of a given asset without physically owning the underlying. Trading CFDs with leverage is appealing because it is easily transacted and can multiply the profits of your winning poisions. On the downside, trading CFDs on margin can just as easily multiply the losses incurred by your failed trades.

What Can You Trade with FXCC?

The list of trading instruments on an FXCC XL account consists of FX pairs and commodities.

• 28 currency pairs
  • Majors and minors
• 2 commodities
  • Silver and gold

Even though the assortment is quite limited compared to other brokers, it is enough to be able to implement some of the most popular types of trading strategies. Intraday traders can speculate on intermittent changes in the price action of currency pairs. In contrast, position and day traders can trade on more significant changes in the longer term with a combination of majors and, say, gold.

Here is a breakdown of the most notable instruments:

Customer Support

Customer Support Test

We conducted our customer support test on the 18^th of March at 11 am GMT +02, clicking on the live chat icon in the ‘About’ section of the website. An agent responded within one minute after our question was submitted, and it took as long for a satisfying answer to be provided.

When asked a topic-specific question (in this case, concerning their rollover charges), their customer support provided a concise answer within minutes. This means that they are familiar with the matter and have a good overall understanding of basic concepts.

Deposit and Withdrawal

FXCC Deposit and Withdrawal Methods

Third-party fees may apply depending on the selected processing method. For additional information, please visit the main deposit page on the website.

A bit of a drawback is that traders should use the same method for withdrawing their funds as the one they had previously used to deposit. Processing times also vary depending on the selected method.

Account Types and Terms

Account opening takes only several minutes to complete. Provided you have all the relevant documents prepared in advance, and the verification can be finalised within 24 hours (during business days). This applies to all account types.

With a minimum deposit of 100 (USD, EUR, or GBP) and zero commissions, the ECN XL account is the best fit for small retail traders or people who are just now getting involved with capital markets for the first time. In contrast, market whales who can afford to fund their accounts with amounts north of 100 000 may enjoy the 200+ instruments available on the ECN Advanced account.

Why is Choosing the Right Account Type Important?

The type of account you choose will be a major determinant of your future success or failure in the market. This would be true if you have a sophisticated trading system that you want to implement aggressively or would prefer to learn about trading’s basics without paying too much for it.

What Account Types Does FXCC Offer?

The spread markup is added to the interbank spreads quoted by FXCC’s liquidity providers, which may start from as low as 0.1 pips. In other words, the liquidity FXCC obtains from other banks and financial institutions has a baseline spread that is added to FXCC’s spread markup. The combination of the two is what FXCC’s clients have to pay.

Depending on the underlying market volatility, this baseline spread may rise or fall, thereby altering the spreads that traders have to pay. On average, STP brokers tend to offer very competitive spreads precisely because they obtain their liquidity from some of the biggest financial institutions out there.

In terms of practicality, the XL account boasts the best cost-to-service value. In contrast, the Advanced account offers the highest flexibility with its wider range of available instruments and the availability of higher leverage.

An alternative to the three main account types is the corporate account, which is constructed specifically for Legal or Registered entities. Though it is not intended for retail traders, its availability alone is evocative of FXCC’s catering to all of its clients’ different needs and goals.

What is CFD Leverage?

The leverage is essentially a mechanism that can allow traders to open positions with larger market exposure against smaller initial deposits. It can increase the profits generated by winning positions and the losses incurred by failing ones.

Your leverage can either be your best friend or worst enemy on the market, depending on how prepared you are for margin trading. Suppose you were to open an ECN XL account with an initial deposit of $100. With a leverage of 1:30, your total market exposure would be 30 times higher or equal to $3000.

When trading with CFDs, you have to be very careful because your losses can be leveraged just as easily as your winners. Many retail traders wipe out their accounts because even if they meet the bare minimum deposit requirement, this may not be enough to help them weather some of the more violent price swings whose impact is magnified by the leverage.

How to Open an Account with FX Central Clearing?

Opening an account with FXCC is fairly easy and quick. You can be done in less than 10 minutes, without too much hassle. We have broken down the process for you in these few easy steps:

• Step 1 – After you click ‘Register’ on the top right corner of the main page, you will be asked to fill in your names, email address, telephone number, etc. Then you have to tick the boxes to acknowledge that you have read the Terms and Conditions and that you are not a ‘U.S. reportable person’.
• Step 2 – Afterwards, a confirmation email will be sent to your email address. Open that email and click the large ‘Confirm Email Address button. Below it, you will find a temporary password that has been automatically generated (you can change that later).
• Step 3 – Once you log in to your live account, you will be asked to fill in additional information as part of the verification process.

Why is Demo Account important?

A demo account is important not just because it lets you test out your trading system in a safe environment but also because you can determine whether the broker’s services meet your needs.

You can also set up a demo account for yourself to test your MetaTrader 4 skills. You can download the platform from either the main page of the website or from your live account. FXCC’s demo account offers the same features as the live account, which is why it can help beginners before they get started with the real deal.

FXCC does not accept clients from the U.S.

Research

FXCC’s research provides a wide range of descriptive technical and fundamental insights, news and analyses, which are nonetheless limited in their scope. There are also no video materials or webinars to complement the written articles.

FXCC Research materials include:

• The trading analyses represent a quick rundown of key developments on the price action of a given instrument over the last several hours. The most important support and resistance levels are underpinned on the chart, giving readers a sense of where the day’s battlegrounds may occur between bears and bulls may take place.
• The fundamental picture. The analyses also underscore the current market sentiment – whether bullish or bearish bias is prevailing. Unlike other such materials, FXCC does not oversaturate its analyses with a heap of useless information and incompatible indicators to mask the inaccuracies of its forecasts. Quite the contrary, the information presented is accurate, punctual and straight to the point.
• The news section is yet another great addition. In it, FXCC has managed to integrate pieces directly from Bloomberg, most traders’ favourite source of news and financial insights. FXCC also has a rich collection of highly instructive articles covering topics from all aspects of the general trading experience.

Education

FXCC’s educational courses manage to cover all necessary topics without leaving anything behind. But more could have been said about the psychology of trading, arguably the most complex and difficult skill to master. Also, the incorporation of video materials could have made the study process easier for beginners.

One of the most challenging aspects of teaching a trader about the market is avoiding transmitting your own biases or misconceptions. Despite the apparent need to be as objective as possible, many traders eventually find out that their craft also contains a considerable dose of subjectivity. That is why it is so vitally important to learn about the basics of trading without developing such biases and misconceptions.

FXCC stays committed to achieving that goal. Its educational courses are technical and informative without straying into empirically ambiguous territory. The materials are delivered matter-of-factly, representing a well-rounded bank of information.

The Bottom Line

Investors looking for a broker with low overall fees and good trading conditions should definitely consider FXCC. Despite the glaring issue with the minimal number of available trading instruments, the broker more than compensates for this in other ways.

FXCC’s European entity – FX Central Clearing Ltd.- is regulated by CySEC and complies with MiFID regulations. However, the offshore entity – Central Clearing Ltd.- is not regulated, entailing higher trading and non-trading risks.

And since FXCC operates as an STP broker without a dealing desk, its spreads are competitive, and the speed of trade execution is fast. FXCC really gives the impression that it is actively looking to foster strong broker-client relationships.

In addition to the above-mentioned problem that FXCC’s ECN XL account offers only 30 instruments, those can be traded solely as CFDs. With spread betting being the only option, traders cannot use other types of instruments such as bonds, ETFs, and options to diversify their positions.

On the other hand, FXCC has integrated MetaTrader 4, which contains all of the essential indicators and tools a trader may need to make comprehensive technical analyses.

Beginner traders have the opportunity to start their journey on the market with a broker that can and does cater to their most essential needs. The available account types and supporting educational and research materials on the website are enough to provide those traders with a solid start in the world of CFD trading.

More advanced traders, in contrast, can take advantage of FXCC’s lower spreads to build lasting trading systems that can gain the maximum out of most opportunities on the market.

No broker is perfect, and there is more that can be desired of FXCC, but overall, the benefits of working with the company outweigh the negatives by a wide margin.

FAQ