Fastbrokers expert review

Fastbrokers is a regulated forex broker providing an absolutely unique combination of cheap ECN trading (non-dealing desk trading) and the MetaTrader 4 trading platform. Before my full review of Fastbrokers, here is the bottom line:

Pros

• an American forex broker registered with NFA and CFTC
• ECN trading with no dealing desk
• low spread
• microlots
• sophisticated forex trading platform (MetaTrader 4)
• suitable for automated trading (including free hosting of expert advisors and API)
• gold, silver, oil, futures
• payment options (bank wire, credit card, PayPal, check)
• quick and efficient customer support
• no additional fee for an Islamic swap-free forex account

Cons

• low number of exotic currency pairs
• forex trading accounts held only in USD
• a rather high minimum deposit for an ECN trading account

Recommended for

• technical trading
• scalping and high frequency trading
• news trading
• automated trading

Not recommended for

• trading of exotics

Why is an ECN forex broker better than a market maker?

Most forex brokers are “market makers”. Only very few brokers offer Electronic Communications Network (ECN) trading. A good comparison of these two business models can be found here. In short, an ECN forex broker provides every trader, big and small, with an access to the interbank market. As a result, the spread paid by a trader is much much lower. Another advantage is transparency. An ECN broker does not trade against its clients, does not hunt their stop loss orders, does not manipulate the price. ECN trading has been traditionally reserved for institutional traders, such as Deutsche Bank. Fastbrokers is one of the few companies that bring ECN to small individual forex traders.

Low spread

During the normal trading conditions, spreads offered by Fastbrokers are among the lowest I have seen in the industry. For example, the spread on USD/JPY regularly decreases to less than 1 pip. Unfortunately, these moments are not as frequent these days as I would wish. On the other hand, even the usual spread on majors is around the levels offered by other low-spread forex brokers.

News trading

Of course, I am talking about the typical spread because Fastbrokers’ variable spreads widen during news announcements. Since I do not trade news, I cannot really comment on whether this widening is better or worse than elsewhere. I only traded once AUD/JPY during the Australian news and the spread widened… surprise, surprise… by “staggering” 2 pips. At the exact same time, OANDA had already widened its spread on the same pair by 6 pips (and later by 30 pips). If this experience was not just an accident, Fastbrokers can make news trading ridiculously cheap. My observations also indicate that Fastbrokers widen their spread only during really important news announcements, while other low-spread forex brokers usually widen their spreads whenever they have a problem with liquidity. For example, OANDA’s spread on GBP/USD at night is usually 50% or even 100% higher than the spread charged by Fastbrokers.

MetaTrader 4

Fastbrokers use the popular MetaTrader 4 (MT4) as their forex trading platform. MetaTrader has all the features you can ever ask from a trading platform: a huge number of technical indicators, all sorts of orders (including orders with a trailing stop), and hedging. Perhaps the most attractive feature is automated trading based on little programs called expert advisors (EA). Fastbrokers accommodate automated trading in an unprecedented way. They host expert advisors for free on their server, so you will not miss a trade even if your computer is currently offline. Just to compare with another major forex broker, OANDA’s fee for a similar service is $600 per month. If you have a sound forex trading system, but you know nothing about programming, Fastbrokers even offer an intuitive Expert Advisor Builder on their website.

Safety and regulations

Fastbrokers in an American company with the headquarters in Glendale, California. It is registered with NFA (ID:0342002) and CFTC. I have not had any problem with them so far and various reviews on other blogs and discussion fora are mostly positive.

Choose the right forex trading account

Fastbrokers offer three very different types of forex trading accounts. Serious forex traders would probably choose the “ECN FX Trader” account that provides all the benefits of ECN trading. Using an ECN feed, you can see the depth of market (5 level bid/ask view) and choose the offer with the best spread – often 0 pips! In ECN trading, the counterpart of a transaction is one of the liquidity providers (Goldman Sachs, Citibank, JP Morgan, and Bank of America in this case), not the broker. As a result, Fastbrokers do not face the usual conflict of interest, which compels many market makers (i.e. most forex brokers) to trade against their clients. Instead, Fastbrokers charge a small and totally transparent commission for each trade. Needless to say, the commission is lower than what you would pay as an artificially high spread offered by any market maker. Talking about attractive features, the minimum deposit of $3,500 is much lower than $50,000 at Dukascopy – which would be otherwise my first choice of an ECN broker if not for this high minimum deposit.

The “Professional Trader” account combines ECN style pricing with the MetaTrader 4 trading platform. Again, you get the best spread available, but you pay a small commission to Fastbrokers. In comparison to the previous forex account, the main advantage of the “Professional Trader” account is the MetaTrader trading platform. You can use hundreds of technical indicators and expert advisors while still benefiting from non-dealing desk trading. Since most (if not all) forex brokers with MT4 are market makers, this combination is absolutely unique. Therefore, it is not surprising that the minimum deposit is also a bit higher: $10,000.

Finally, you can opt for a “Retail Trader” account, with no commission, fixed spread, and a dealing desk. The trading platform is again MetaTrader 4. The minimum deposit of only $500 combined with a possibility to trade micro lots makes this option seemingly attractive to a typical small retail trader, but I believe that anyone wanting to trade currencies seriously should aim for either a “Professional Trader” account or for an “ECN FX Trader” account. Although the “Retail Trader” account still features a powerful trading platform and low spreads, the true strength of Fastbrokers lies in the combination of MetaTrader and ECN trading.

Muslim traders can open any of these three accounts in a swap-free “Sharia” mode. What makes the Fastbrokers’ offer to Muslim traders unrivaled is that Sharia accounts are opened and held at no additional fee.

Customer support

I have communicated with Fastbrokers using a live chat on their website and e-mail. The person chatting with me was very knowledgeable, polite, and efficient. When I used e-mail, I got a response in less than an hour. Obviously, I was more than satisfied on both occasions. I have never tried their 24-hour hot line. In addition to English, Fastbrokers also provide support in French, Italian, and Spanish. But I have never tested their customer support in these languages.

More information

You can find some more details about this forex broker at the Forex Learning Site’s Fastbrokers review.

5 cheapest forex brokers with Islamic swap-free accounts

Shariah, the Islamic law, prohibits interest payment. However, the rollover interest is an integral part of forex trading. How can a Muslim forex trader from Saudi Arabia or the United Arab Emirates trade currencies without violating the religious law? The answer is to find a forex broker willing to offer an account with no overnight interest. Such swap-free accounts are usually offered only to Muslims in order to prevent abuse. To substitute for the revenue from a missing swap, forex brokers also charge a flat fee for this service. The only exceptions is the American forex broker Fastbrokers, which does not charge any additional fee for its Sharia account.

A review of the online forex brokers offering an Islamic account follows. The list of Islamic forex brokers was created using an interactive comparison of forex brokers. I included only forex brokers that offer Islamic swap-free accounts, charge no commission for forex trading, and are regulated by trustworthy authorities. The five cheapest Muslim friendly brokers are ordered starting with the lowest spread (transaction cost).

#1. Fastbrokers

Fastbrokers is one of the few ECN forex brokers who offer Islamic forex accounts. What do the letters “ECN”, so coveted by forex traders, mean in practice? First, Fastbrokers has no dealing desk that would trade against their clients or requote prices. Second, Fastbrokers’s variable spread can sometimes decrease to zero pips. Alternatively, you can also ask them for a fixed spread, which is a bit higher (2 pips on EUR/USD). But, why would you? Muslim forex traders can trade 19 currency pairs, gold, silver, and futures. Depending on the account, you can choose any leverage from 1:1 up to 200:1. Fastbrokers uses the popular and highly sophisticated MetaTrader 4 trading platform. It supports hedging, trailing stops, automated trading, and mobile trading – a combination, which is still quite rare among forex brokers. Fastbrokers is also the only forex broker that does not charge any additional fee for an Islamic account. You can get more information about this forex broker from the Fastbrokers review.

#2. FXOpen

FXOpen welcomes traders from all Muslim countries. The fixed spread is among the lowest in the industry (2-3 pips on majors). In addition to 30 currency pairs, a Muslim forex trader can also trade precious metals (gold). The available leverage is among the highest (500:1). Since FXOpen’s minimum deposit is only $1 and it the minimal contract size only $100, it is possible to test FXOpen’s live trading platform practically without any risk. The forex trading platform itself is the popular MetaTrader 4 (MT4), which features hedging, trailing stops, and free automated trading (EA). FXOpen also offers mobile trading. Their customer support speaks Malaysian. For more information read the FXOpen review.

#3. eToro

eToro distinguished itself from the rest of the crowd by an easy-to-use, visually-based trading platform. Obviously, their platform appeals more to beginners than to advanced traders. For example, although it supports hedging, eToro does not provide any algorithmic trading. On the other hand, both beginners and advanced traders would be definitely interested in eToro’s fixed spread of 2-3 pips on all majors. It is not so frequent to see a broker offering the fixed spread of 2 pips on USD/CHF. Another attractive feature of this Islamic forex broker is the leverage of 400:1. eToro also provides support in the Arabic language. For more details, see the eToro review.

#4. Finexo

Finexo is a German forex broker, under the oversight of strict German authorities (BaFin). The leverage is 200:1 and the minimum deposit $25. Features of the trading platform include trailing stops and mobile trading. But the spread is higher (2-5 pips for major currencies) than in the previous cases. What is unique, Finexo can communicate not only in Arabic, but also in Turkish. You can find more details in the Finexo review.

#5. Easy Forex

Easy Forex offers the spread of 3-6 pips on majors, which I consider a bit too high. However, they offer a great variety of 182 different currency pairs and precious metals. Another advantage over their competitors is that you can hold an Islamic forex account in one of twelve currencies, not just USD or Euro. The customer support speaks Arabic. Easy Forex offers the 200:1 leverage, a minimum deposit of $100, hedging, mobile trading, but, again, there is no automated trading. If you want to know more about this Islamic forex broker, please read the Easy Forex review.