Broker comparison – who is the best? In this article, we are introducing the broker XM.
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What is behind XM?
The online broker XM was established in the year 2009 and has registered a rapidly growing customer base ever since. The main office of the company is located in Limassol, Cyprus.
XM.com was founded by the financial service provider Trading Point Holdings Ltd. with the intention of combining the greatest advantages of this company with a wide range of new financial services.
At the time of this review, XM’s clients add up to over 2.5 million. This makes the global online broker one of the market leaders in the financial industry.
The many employees and executives of XM can look back on many years of experience in the financial sector. Another unique feature of XM in the online broker market besides this great number of experts trained in the financial industry is their client section – which is available in more than 30 languages.
The company also primarily banks on international networking and training, to which end the online broker’s management has already travelled to over 120 countries to establish new contacts with clients and business partners.
Company philosophy and special features of XM
XM has already held several hundreds of seminars in recent years to provide its clients with ideal education services and thus enable them to trade more effectively. The online broker is therefore also known for its high customer loyalty, in which respect it has been honoured by the British organization Investors in People for “its exemplary achievement in terms of managing, utilizing and incentivizing its human resources in order to serve clients with excellence“.
In addition to this, XM is also distinguished by attaching major importance to the subject of sustainability. Various requirements relating to the respective culture, nation and/or religion are taken into consideration in this context, and implemented accordingly.
The online platforms and trading conditions are thus all adapted to clients around the world. The know-how of XM’s staff is meanwhile based on a host of personal experiences and in-depth knowledge about the world’s economic markets.
The company philosophy of XM is to ensure high customer satisfaction, thereby guaranteeing customer loyalty. In doing so, XM thus banks on high credibility and authenticity to meet the requirements of its customer base. XM claims to brook no compromise where fulfilling its clients‘ needs is concerned.
Awards won by XM so far
The online broker has a broad range of awards to show for itself in various categories, and especially for its forex services. It has just recently been honoured with the „Best Customer Service Global 2019“ award by Capital Finance International Magazine, as well as the same magazine’s „Best Market Research and Education Global 2019“ award.
But XM has also won plenty of honours as a top forex broker, for example including the World Finance magazine’s „2019 Best Forex Broker, Europe“ award. And the online platform itself has not least of all also garnered several prizes, e.g. as the “Best Financial Trading Platform 2015” at the eighth Saudi Money Expo in 2015.
Regulation of XM and their deposit protection
The regulation and deposit protection are key factors in the search for a suitable online broker. This because the company and client both want to be commensurately insured in emergencies. Which is why the online broker XM is overseen by the Cyprus Securities and Exchange Commission as a supervisory authority, what with their head office being located there. But as XM is an international company, various other authorities are involved depending on the country. The supervisory authority in Germany is the Federal Financial Supervisory Authority BaFin.
Even with the central supervisory authority being in Cyprus, there have not been that many negative reports to speak of in the past. The online broker keeps client funds and company assets in separate accounts, as is the law. Barclays Bank insures you as a client up to an amount of € 20,000 for the worst case scenario of an insolvency. Advanced traders should keep in mind, however, that there will be no compensation for any amounts exceeding this total. Specific safeguards can be agreed with the online broker depending on the respective customer deposit, though.
Which markets can be traded at XM?
The online broker XM provides for a broad range of options where selecting a financial instrument is concerned. Clients can choose from the following markets here:
- Forex
XM enables its clients to trade in the world’s most liquid market at favourable conditions with no hidden costs, providing its clients with more than 55 different currency pairs to choose from (including majors, minors, Cross currencies and exotics).
- Shares
XM clients can directly and inexpensively access the global stock market to try out both their short-term and long-term trading strategies.
- Commodities
Given the low minimum deposit required, commodities are particularly recommended for novices. Commodity trading at XM involves no further exchange fees.
- Stock indices
Stock index trading is also free of added costs.
- Precious metals
The precious metals gold and silver can be traded online with leverages of up to 1:30 and no requotes. No further costs are incurred here either.
- Energies
Last but not least, XM will also let you trade in oil – the world’s most traded asset. This is free from overnight financing charges for oil CFDs.
As you can see, XM offers its clients a whole range of different trade instruments to choose from depending on their individual preferences.
Which platforms can I choose from at XM?
This section takes a closer look at the Trading platforms available to XM clients. The online broker principally offers two alternatives in this regard, one being MetaTrader 4 and the other MetaTrader 5. These online platforms come in many different versions depending on the device of choice. The software is available for classic PC and Mac, and can also be very easily used online as WebTrader.
In addition, the trading platforms are also available for mobile devices such as smartphones or tablets, and can be downloaded both for Android and from the App Store. The following is hence dedicated to a more detailed description of the individual trading platforms‘ functions and benefits.
MetaTrader 4
MetaTrader 4 (MT4) is one of the most popular platforms where the trade execution quality is concerned. MT4 enables XM clients to trade without requotes or order refusals using leverages of up to 1:30. See below for a short overview of the features and helpful functions of MetaTrader 4 at XM:
- Over 1,000 different instruments available for trading, inter alia including forex, CFDs and futures
- MetaTrader 4 will let you access up to eight platforms
- MT4 works with expert advisors as well as customized indicators
- MT4 offers a range of useful technical analysis tools with 50 indicators and chart tools
- Three different chart types
- Hedging is permitted
- 1-click trading is possible
- Access to a history database, and past data exports and imports for administration
MetaTrader 5
Instead of the classic MT4 trading platform, there is also the option of using its successor, MetaTrader 5, for your trading these days. The latest version offered by XM will give you all the functions of the MT4, but with another 1,000 stock CFDs on top. All the trade instruments offered by XM can thus also be traded without order refusals or requotes at leverages of up to 1: 30 here as well. Just a brief look at the functions of MetaTrader 5:
- More than 1,000 instruments can be traded, e.g. including CFDs on shares, share indices, forex, precious metals and energies.
- MetaTrader 5 makes seven platforms available with a single login
- All order types can be fulfilled (including market orders, pending orders, stop orders and trailing stops)
- MT5 offers over 80 technical indicators and over 40 analysis objects
- Up to 100 charts can be displayed simultaneously
- Hedging is permitted
Trading account types at XM
Before going into the details of the various accounts available at XM, it is vital to mention first that the XM Group comprises two different companies that offer different conditions. One of them is „XM AU„, which is regulated by the ASIC in Australia, and the other is „XM CY„, regulated by the CYSEC in Cyprus, as already mentioned. We are therefore looking at the latter and the account models there.
XM basically offers interested investors three different options in this regard: the Micro Account, Standard Account and the XM Zero Account. The following briefly outlines the conditions of the respective account types in bullet points.
Micro Account
First off, here are the general conditions with a Micro Account:
- Possible base currencies: USD, EUR, GBP, JPY, CHF, AUD, HUF, PLN, RUB, SGD, ZAR
- Contract size: 1 lot equals 1,000
- Spreads for all majors: from 1 pip
- Minimum trade volume: 0.01 lots with MetaTrader 4 and 0.1 lots with MetaTrader 5
- Minimum deposit: US$ 5.00
- Maximum number of open/outstanding orders per client: 200 positions
Standard Account
And here the conditions with the XM Standard Account:
- Possible base currencies: USD, EUR, GBP, JPY, CHF, AUD, HUF, PLN, RUB, SGD, ZAR
- Contract size: 1 lot equals 100,000
- Spreads for all majors: from 1 pip
- Minimum trade volume: 0.01 lots
- Minimum deposit: US$ 5.00
- Maximum number of open/outstanding orders per client: 200 positions
XM Zero Account
The last and latest account type offered by XM is the so-called XM Zero Account. This partly offers very low spreads starting from 0 pips in combination with the XM execution policy without requotes. Clients opting for the XM Zero Account can choose from USD, EUR and JPY as base currencies, along with over 55 currency pairs.
The account holder can trade with MetaTrader 4 and MetaTrader 5. Here follows another list of the conditions in bullet points:
- Possible base currencies: USD, EUR, JPY
- Contract size: 1 lot equals 100,000
- Spreads fur alle Majors: from 0 pips
- Minimum trade volume: 0.01 lots
- Minimum deposit: US$ 100.00
- Maximum number of open/outstanding orders per client: 200 positions
There is yet another difference between the XM Zero Account and both the other account types, however: the Zero Account will charge you commissions totalling US$ 3.50 per US$ 100,000 transaction volume. This commission becomes due upon opening and closing a position. If a client buys 3 lots of USD/JPY, for example, the transaction volume amounts to US$ 300,000. The total commission would therefore amount to US$ 21.00 in this case [US$ 3.50 x 3 (lots) x 2 (for opening and closing)].
To give you a better overview, the conditions of the various account types are summarized in the following table once more.
The trading conditions at XM
Having described the various features and account types in the previous section, this one goes into the details of the general trading conditions at XM. A good place to start this are the trading hours of the online broker XM.
Trading hours at XM
XM’s official trading hours are Sunday 10:05 p.m. to Friday 09:50p.m. GMT. The dealing desk is closed outside these hours, meaning that no transactions are possible on the online platform. The customer service is meanwhile available around the clock Monday to Friday in case you have any questions or problems.
Execution Policy
Another interesting feature is the Execution Policy at XM. The online broker has been playing a leading role in this respect since 2010, with no requotes or order refusals as a matter of principle. The order fulfilment quota runs to 100 percent, with an astounding 99.35 percent executed within a second.
There is a good quote from the founder of the XM Group – Constantinos Cleanthous – in this context:
„At XM execution quality is crucial. We foster the ease and speed at which our clients enter the market at the best available market price. Thus we strongly oppose any software or methods that undermine the execution quality by aggressively re-quoting or rejecting clients’ orders. As ex-interbank dealers, we also know that inferior execution turns a profitable trading strategy into a losing one. Tight spreads only make sense if you can trade on them. In this respect, the XM mission is to provide the best execution possible.“
Spreads
XM promises its clients narrow spreads in general, irrespective of the selected account type or trade volume. These narrow spreads can partly start from as little as 0.0 pips with the major currencies.
As fixed spreads are usually higher than variable ones, XM uses the latter, and even goes so far as to offer fractional pip prices to let its clients benefit from the lowest possible price. The broken-down pip prices enable you to trade with very tight spreads while benefitting from very precise quotations.
Detailed information on the actual spreads of specific trade instruments in the respective account types is always available from the XM website.
f the invested capital drops below 100 % of the required margin, the client gets a margin call for timely information.
The margins for the various trade instruments are always available for viewing at the XM website. In forex, they usually range between 3.33 and 5.00 percent. With shares, they usually amount to 20.00 percent, for commodities to 10.00 percent and for stock indices they range between 5.00 and 10.00 percent. The margin for oil CFD futures is also usually set to 10.00 percent. And the margins for gold and silver are 5.00 and 10.00 percent, respectively.
Deposits and withdrawals at XM
The minimum amount for making deposits or withdrawals is US$ 5.00. XM offers various options for making either, with the payment alternatives principally split into credit cards and electronic payment systems. Where the credit cards are concerned, you can use Visa, Visa electron, MasterCard, Maestro, Union Pay or Diners Club International.
The electronic payment systems primarily include so-called e-wallet services. These offer the advantage that the clients‘ bank data are not disclosed to the respective contract partners. You can choose from Skrill, Neteller, SOFORT, iDEAL, paysafecard or giropay here.
Withdrawals will moreover require an additional personal identification, while deposits do not. This is designed to protect the client.
Clients are not charged any transaction fees for either deposits or withdrawals. These are fully covered by XM. But please note that the total deposit always needs to exceed the total withdrawal with credit cards. This may require a bank account to be verified to transfer the difference. While deposits are immediately effected with most payment methods, withdrawals will normally be handled within 24 hours.
Demo account
XM also offers interested investors the option of a demo account. This demo account is of a very user-friendly design that even enables novices to gain a comprehensive overview in mere minutes. One huge advantage of this demo account is that its use is unlimited in time. Especially so as the Demo account of many other online brokers can only be used for a specific period of time. If you opt for a XM demo account first, you will be starting with a virtual credit of US$ 1000,000, and can try yourself out at the stock exchange without any financial risk whatever.
Education at XM
In addition to all the above, the online broker XM also offers its clients an upskilling section. This includes four weekly seminars revolving around Forex trading, for example, which are also available in German.
Another interesting section is called „Platform Tutorials“ and offers interested users a range of videos explaining the basics and how to operate the online platforms.
A recent addition is their „Live-Training“ section that is only available in English so far, alas. This lets you join „Education Rooms“ where experts and tutors support you and help you with your trading.
Based on your experience and aims, you can choose from three different rooms here (Primary, Intermediate, and Advanced Education Room). In addition to which there are also many training videos delving into the strategy development, but also the psychology of trading.
The customer service at XM
The customer service at XM is very international, supporting clients from nearly 200 countries in more than 25 languages. The telephone support is available to deal with clients‘ questions and problems around the clock from Monday to Friday. Besides the telephone, you can also contact their service team in a live chat for fast and efficient answers to your enquiries.
Experiences with XM
Looking for reviews of XM online, one largely finds them tending to the positive. Users particularly appreciate the relatively broad range of trade instruments and fair conditions. Another positive aspect is the demo account, which can be used indefinitely, and the comprehensive education opportunities.
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