DMM FX Review

WHO IS DMM FX?      

According to research in South Africa DMM FX was established in 2013 and is headquartered in Sydney, Australia.

DMM FX is an online Forex broker supported by DMM Group, a premier Japanese Forex broker with $1 097 billion in global trading volume, 32 000 real time active traders and 360 000 client accounts.

The DMM Group is a global provider of online trading services and its members regulated by the Australian Securities and Investments Commission (ASIC) in Australia and the Financial Services Agency (FSA) in Japan.

DMM FX offers trading in currency pairs and CFDs through the standard MT4. The broker no longer provides binary options trading accounts and services.

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SAFE OR SCAM

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

The DMM Group, the company behind the DMM FX brand, is a global provider of online trading services regulated by the Australian Securities and Investments Commission (ASIC) in Australia and the Financial Services Agency (FSA) in Japan.

ASIC requires licensed financial services providers to meet certain requirements and comply with various rules. Brokers must hold at least $ 1 million to provide financial services legitimately. Australian brokers are not covered by any compensation scheme.

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.

DMM FX clients can choose leverage ratios from 1:1 to 1:600.

ACCOUNTS   

A forex account at DMM FX 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.

DMM FX offers only one standard account which allows traders to trade 27 symbols with low fixed spreads of USD/JPY 0.5, EUR/USD 0.7, and AUD/USD 0.7. There are no limits on the number of open positions or pending orders and no commissions or account fees.

The minimum deposit to the account is $200 and deposits can be made in AUD, USD, EUR, GBP and NZD.

A demo account is available too. Accounts area available for clients from outside Australia but not from the US.

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.

DMM FX offers clients the opportunity to trade commodities including precious metals and now offers traders the opportunity to trade oil on the following indices: JPN 225, US30, NAS100 and SPX500.

FEES

Cost depends on different factors, like spread and margins, and DMM FX 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.

DMM FX is a fixed spread forex broker, offering competitive spreads on its commission-free account, comprising 1.7 pips on EUR/USD. In return, the broker adds negative balance protection and waives withdrawal fees for high-volume traders.

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 DMM FX traders need to deposit $200 to open an account. Deposits can be made with China UnionPay Cards, Skrill, Neteller, Fasapay, POLipay, Wire Transfers and BPAY but not standard credit or debit cards.

Withdrawals can made in the same way and are processed within 1 to 2 business days.

There are no commissions, deposit or withdrawal fees or account fees on any of the CFD accounts but for withdrawals to overseas bank accounts an AUD $20 bank handling fee is charged.

TRADING PLATFORMS

The forex trading platform provided by DMM FX 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.

DMM FX provides several platforms:

MetaTrader 4 – has a complete set of valuable and convenient trading tools. Metatrader 4 offers real-time quotes on currencies and commodities, comprehensive charting and technical tools, economic news and the use of Expert Advisors.

MT4 is also available for Mac with the same high performance as MT4 for Windows, as well as MT4 for iPhone, Androids and Tablets.

ChartIQ WebTrader – provides a wide collection of advanced charting tools, with extensive trading performance statistics, aggregated position control and a single click ‘close all’ transaction button. The ChartIQ is free of charge to all traders.

HOW TO OPEN AN ACCOUNT

Similarly to a bank, to register a forex trading account with DMM FX for the first time, you will be required to go through a basic “know your customer” process, which will allow DMM FX 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 DMM FX customers can get dedicated 24/6 customer support. A toll free number to the Sydney office is available to clients 24/6 and email can be accessed at all times. A chat option is offered 24/6 during working hours in Australia.

The webpage is available in an several different languages.

EDUCATION       

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

DMM FX offers DMM FX offers tutorial videos on basic topics as well as on leverage trading. More videos provide instruction on the MT4 platform and its uses and a user friendly glossary of terms and FAQ page offers more help.

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 DMM FX they have access to global economic news events and their expected volatility as well as a Forex economic calendar.

AWARDS

Being an awarded company instils extra confidence by traders.  DMM FX mentions that it has been chosen as the Most Innovative Broker and Best Forex Broker 2014 by FXEmpire and Best Value Broker at the Shanghai Expo 2014.

CONCLUSION  

DMM FX can be described as a company that offers very low spreads, especially on frequently traded majors such as the EUR/USD and AUD/USD. These, together with the broker’s no fees and no commission stance, makes DMM FX very appealing.

The broker offers clients the use of the MetaTrader4 platform, the most popular platform in the Forex industry.

Aside from Forex, DMM FX also offers traders the trading of CFDs with very competitive spreads.

DISCLAIMER

DMM FX 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 DMM FX, 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.

DMM FX 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 DMM FX cannot guarantee a maximum loss that a trader may suffer, according to research in South Africa.

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Frequently Asked Questions

Is DMM FX regulated?

Yes, DMM FX is regulated by (ASIC) in Australia and (FSA) in Japan.

Is DMM FX a recommended forex trading broker for experts and beginners?

DMM FX offers a fair trading environment for beginners and experienced traders.

What is the overall rating out of 10 for DMM FX?

Overall rating is 7/10

How many instruments can I trade with DMM FX?

You can trade several different instruments with DMM FX, which include the following:

• Commodities
• Precious metals
• Oil
• Indices

Which platforms are supported by DMM FX?

DMM FX provides the following popular trading platforms:

• MetaTrader 4
• ChartIQ WebTrader.