CMS Forex Review

WHO IS CMS FOREX?      

According to research in South Africa CMS FOREX was acquired by Gain Capital in 2010. CMS FOREX was one of the largest Forex brokers on the market with a presence in some of the most important financial markets in the world.

After the transition from CMS to Gain Capital CMS FOREX still seems to offer services to retail traders through proprietary trading accounts, but with some drawbacks.

CMS FOREX was founded in 1999 and based in New York with affiliate companies around the world, including Bermuda’s Capital Market Services International, CMS FOREX Japan, and CMS FOREX UK.

CMS FOREX trading relies on the VT Trader 2.0 platform, offers practice and live accounts and education for newcomers to Forex trading.

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SAFE OR SCAM

One of the best benchmarks to measure the safety of a broker like CMS FOREX, is to establish which regulating authorities are watchdogs over its actions.

CMS FOREX regulation is complicated and not clear since Gain Capital has set up the brokerage’s headquarters in the British Virgin Islands. CMS FOREX was previously regulated by the NFA in the US, but after its acquisition by Gain Capital, supervisory duties and responsibilities were given to the parent company.

Although CMS FOREX clients can be assured that Gain Capital is one of the top regulated financial companies in the market, CMS FOREX was fined heavily by the NFA and the CFTC due to irregularities on broker capital requirements and performance issues with their trading platforms.

CMS FOREX’s official website appears incomplete and without vital information about the different trading products and services.

PRO AND CONS

LEVERAGE

Leverage is a facility that enables you to get a much larger exposure to the market you are trading than the amount you deposited to open the trade. Leveraged products, such as forex trading, magnify your potential profit – but also increase your potential loss.

Leverage amount is expressed as a ratio, for instance 50:1, 100:1, or 500:1. Assuming that you have $1,000 in your trading account and you trade ticket sizes of 500,000 USD/JPY, your leverage will equate 500:1.

Margin is the amount of collateral to cover any credit risks that may arise during your trading operations. It is expressed as the percentage of position size (e.g. 5% or 1%), and you have to have funds in your trading account to ensure sufficient margin.

For example, on a 1% margin a position of $1,000,000 will require a deposit of $10,000. The margin level in a trading account needs to be equal or more than 100% to be able to open new trades, otherwise your trading account will be fully hedged.

CMS FOREX offers a maximum leverage ratio of 1:50.

ACCOUNTS   

A forex account at CMS FOREX is a trading account that you will hold and that will work similarly to your bank account, but with the difference that it is primarily issued with the purpose of trading on currencies.

Forex Islamic accounts are also known as swap-free accounts as they imply no swap or rollover interest on overnight positions, which is against Islamic faith.

Often, the number and type of accounts that a trader can open with a broker company differs depending on the country in which it operates and the regulation authorities under whose jurisdiction it falls.

CMS FOREX offers a trading account for a minimum deposit of $200, and according to the CFTC rules of Forex trading, traders can only get a maximum leverage of 1:50.

CMS FOREX is an automated dealing desk broker that works on the market maker protocol, where the CMS FOREX spreads for major currency pairs start at 2 pips.

A CMS FOREX demo account is only available for 30 days.

MARKET INSTRUMENTS

The most popular market instruments available from most brokers for trading include:

Forex:

Forex trading describes the currency exchange market which refers to the global, decentralised marketplace where individuals, companies and financial institutions exchange currencies for one another at floating rates.

Commodities:

Commodity markets offer many investment opportunities for traders. Soft commodities have been traded for centuries and plays a major role in portfolio diversification and risk management. Investing in contract-based tradable goods is a reliable way to mitigate risk during times of economic uncertainty.

Indices:

Equity, or stock indices, are actual stock market indexes which measure the value of a specific section of a stock market. They can represent a specific stock market or a specific set of the largest companies of a nation.

Precious metals:

The trading of gold and other precious metals, along with crude oil, copper or petroleum, are hard commodities that play a major role in the commodities market and are contract-based tradable goods.

Energy:

The typical feature of energy prices is high volatility due to the influence of political and environmental factors, supply and demand, extreme weather conditions and global economic growth.

CMS FOREX offers the following of the above:

Currencies: (35+)

Cryptocurrencies: (1) Bitcoin

CFD: (175+) Gold, Silver, Other Precious Metals, Stocks, Stock Indexes, Oil, Other Commodities.

FEES

Cost depends on different factors, like spread and margins, and CMS FOREX clients may also experience different fee structures according to their country or place of residence.

The spread of a currency pair is the difference between the bid and the ask rate. A pip represents the smallest increment that an exchange rate can move.

Margin is the amount of money required in your account in order to open a position. Margin is calculated based on the current price of the base currency against USD, the size (volume) of the position and the leverage applied to your trading account.

CMS FOREX spreads for major currency pairs from 2 pips. All account funding payment methods come with a standard transaction fee to the trader.

DEPOSIT AND WITHDRAWAL

Accounts usually requires a certain minimum initial deposit, which can be paid in several ways. Withdrawals can usually be done with the same ways, but sometimes differ.

In the case of CMS FOREX, the following are required:

A CMS FOREX trading account requires a minimum deposit of $200, with a limited leverage option due to the CFTC regulations. Traders can deposit funds into their trading account using their credit/debit cards, or other payment options such as PayPal, bank wire, or checks.

All payment methods carry a standard transaction fee for the trader. Bank Wire, VISA and MasterCard can be used for withdrawals.

TRADING PLATFORMS

The forex trading platform provided by CMS FOREX to its clients is in essence the software to carry out their trades. Some brokers provide only one, others quite a few platforms.

A multi-asset trading platform is one that allows clients to trade forex as well as other asset classes. The decision about which platform to choose will usually depend on what a client would like to trade.

CMS FOREX provides VT Trader and the MT4 trading terminal, which connect traders to more than 40 different currency pairs and allied commodities.

Although MT4 is a stable and reliable platform, the VT Trader has led to the issues that resulted in fines from the NFA and the CySEC. Since the broker was unable to rectify the issues on time, the CFTC deemed the company to have deviated from its regulatory code of conduct, which resulted in penalties.

HOW TO OPEN AN ACCOUNT

Similarly to a bank, to register a forex trading account with CMS FOREX for the first time, you will be required to go through a basic “know your customer” process, which will allow CMS FOREX to ascertain that your submitted details and ensure the safety of your funds and account details.

CUSTOMER SUPPORT

Potential traders need to make sure the broker company they chose will offer sufficient support whenever they need it.

In the case of CMS FOREX customers can reach the support team via phone calls and emails. CMS FOREX offers 24 hours live chat with professionals to ensure a positive consumer experience on the site.

EDUCATION       

Before starting to trade, potential clients of CMS FOREX should avail themselves of all possible information and trading skills needed to be successful in the world of forex and commodity trading.

CMS FOREX offers information to guide traders through each step of using the site. There are pages dedicated to teaching the user the basics of Forex trading before opening a practice account, what Forex trading is, and the benefits of trading Forex over trading stocks.

The CMS FOREX site also provides a tutorial on how to use the VT Trader 2.0 software to trade Forex.

RESEARCH         

To be able to trade with confidence, traders should do as much as possible research about this kind of speculative trading before commencing, but also preceding every daring deal to ensure that they don’t lose money unnecessarily and trade as profitable as possible.

With CMS FOREX they have access to fundamental and technical analysis of Forex trading.

For traders who had opened a practice account and want to switch to a live account, a guide outlines what to expect in the transition from trading practice money to real money.

AWARDS

Being an awarded company instils extra confidence by traders.  Although CMS FOREX is acclaimed by customers, there is no indication of awards won on its homepage.

CONCLUSION  

CMS FOREX has seen a downward spiral for a few years, but its parent company, Gain Capital, has other established Forex brokerage services that should provide traders with an excellent Forex trading account without any of the associated drawbacks.

DISCLAIMER

CMS FOREX warns potential customers that Forex and CFDs trading always carries a high risk and may not be suitable for all investors.

Before deciding to trade with CMS FOREX, potential traders are advised to carefully consider their investment objectives, financial situation, needs and level of experience before investing money they cannot afford to lose.

CMS FOREX warns that margin trading involves the potential for profit as well as the risk of loss and that movements in the price of foreign exchange and commodities are very unpredictable, hence CMS FOREX cannot guarantee a maximum loss that a trader may suffer, according to research in South Africa.

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Frequently Asked Questions

How many instruments can I trade with CMS Forex?

• Currencies: (35+)
• Cryptocurrencies: (1) Bitcoin
• CFD: (175+) Gold, Silver, Other Precious Metals, Stocks, Stock Indexes, Oil,
• Other Commodities.

Which platforms are supported by CMS Forex?

CMS Forex provides the following popular trading platforms:

• MetaTrader 4,
• MT4 Mobile and
• VT Trader.

Does CMS Forex offer leverage?

Yes, CMS Forex offers a maximum leverage of 1:50

Is CMS Forex a recommended forex trading broker for experts and beginners?

CMS Forex offers trading opportunities for all types of traders.

What is the overall rating out of 10 for CMS Forex?

5/10