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.