FairMarkets Review 2022

Trust

FairMarket Regulation

In our trust category, we place the most importance on how a broker is regulated. So let’s dive in and take a look at how FairMarkets is regulated and how this impacts you as a trader. We rate regulators on a scale of 1 to 3, with 1 reflecting the highest level of trust.

FairMarkets Trading Pty. Ltd. (FairMarkets Australia) is authorised and regulated by the Australian Securities and Investments Commission (ASIC), AFS licence number 424122 and ACN number 159166739. We rate ASIC as a Tier 1 regulator.

GK Trade International Ltd. (FairMarkets International) is authorised and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. We rate FSC as a Tier 3 regulator.

Why is it important to know where your broker subsidiary (entity) is regulated?

Different regulators provide different levels of protection. FairMarkets clients in Australia benefit from the oversight of a Tier 1 regulator and have negative balance protection since it is a requirement of ASIC. Negative balance protection means that clients cannot lose more than their deposit. ASIC also requires that brokers have at least $1 million in operating funds and can only use Tier 1 banks for segregating their clients’ funds. ASIC allows retail traders a maximum leverage of 30:1.

Global clients with the FairMarkets International entity do not enjoy these same protections as the entity they are working with is regulated by the less stringent Mauritius Financial Services Commission (FSC).

In the table below we break down the mandated protections and benefits by entity, regulator and region.

Stability and Transparency

In our tests for the Trust category we also cover factors relating to stability and transparency. Here, we focus on how long the broker has been in business, the size of the company and how transparent they are in terms of information being readily available.

FairMarkets has a decade of operating experience, having been founded in 2012. They were acquired by Netherlands-based company Kapital Investment Group B.V., in 2021. FairMarkets is a small forex and CFD broker, with 2-10 employees, according to the company LinkedIn page.

In researching FairMarkets, we found that they showed an adequate level of transparency in the areas of fees, business terms and the background of the company. Information can be found with relative ease on their website. Fees can be found under the Trading Conditions section. The Client Agreement (Terms of Business) document is available in the Legal Documents section. An About Us page provides an overview of the company covering its history and goals.

In the area of regulation we felt that FairMarkets could have done better, because there is not a page on the website dedicated to their background in this area and what it means. FairMarkes does mention their regulatory status in the footer of the website. We would also have liked to see information on the website about how long deposits and withdrawals take to process.

Is FairMarkets Safe to Trade With?

We judged that accounts opened with FairMarkets Australia are relatively safe due to the robust oversight of ASIC. Accounts opened with FairMarkets International do not have the same level of mandated protections, but they state that they have an insurance policy that covers clients up to $500,000.

Fees

FairMarkets Trading Fees

Trading related fees at FairMarkets consist of spreads, commissions (for the Aussie Premium account only) and swap fees (the interest rate charged or paid for leveraged positions held overnight).

Trading fees at FairMarkets are mainly reflected in their spreads. Spreads are variable, meaning that they fluctuate slightly. The size of the spread depends on the level of liquidity in the market. Liquidity describes the extent to which an instrument can be bought and sold quickly and without moving the market. Tighter spreads are typically seen when there is greater liquidity in the market.

FairMarkets Spreads

We tested the spreads at FairMarkets across different asset classes using the MetaTrader 4 platform.

The test was done at 8AM GMT and at 3PM GMT on January 25th 2022. We made our tests at two different times to allow greater perspective. 8AM GMT is the London open, when there is a great deal of liquidity in the forex market and therefore tighter spreads in currency pairs. 3PM GMT is a quieter time, shortly before the opening of the New York stock exchange.

Spreads were especially competitive in forex and the least competitive in commodities.

Swap Fees

In the table below you can see the Swap Long (the cost/credit of holding a buy position overnight) and the Swap Short (the cost/credit of holding a sell position overnight) for one full sized contract. A full sized contract is 100,000 units of the base currency (the first currency quoted in the pair).

Swap fees at FairMarkets were about average for the industry.

Non-Trading Fees

FairMarkets does not charge any deposit, withdrawal, inactivity or account closing fees.

Are FairMarkets Fees Competitive?

With tight spreads across multiple asset classes and reasonable swap fees we judged the fees at Fairmarkets to be competitive overall.

Platforms and Tools

FairMarkets Desktop and Web Platforms

FairMarkets offers MetaTrader 4 and MetaTrader 5 for desktop, which includes advanced functions such as copy trading and automated trading. MetaTrader 4 is available in 39 languages, from Arabic to Vietnamese.

We judged that this is a platform more suited to intermediate or advanced traders as it can take some time to become familiar with it. For example, while this platform has advanced features such as the ability to automate trading, it does not have a readily available search feature to quickly pull up a trading instrument.

Key Features

The platform provides popular features such as:

• Alerts. This feature allows traders to be updated when an instrument reaches a specific price level. Alerts can be delivered via audio, an email, or a push notification to a mobile device.
• Watchlists. Traders can set up a list of their favorite instruments and follow live quotes in a panel called Market Watch.
• One-click trading. This feature allows traders to execute orders with a single click and no secondary confirmation. Being able to place a trade with a single click saves time and is especially useful for short term traders.
• Trading from the chart. MT4 also allows users the convenience of trading directly from the chart.

Order Types

MetaTrader also delivers when it comes to the range of available order types and its charting functionality. The following order types are available:

• Market Order. This is an order to buy or sell an instrument at the current best available price.
• Limit Order. This is an order to buy or sell an instrument at a specified price or better.
• Stop Loss Order. This is an order to buy or sell an instrument that is triggered when price reaches a specified level.
• Trailing Stop Order. This is a stop loss order that can be set at a defined percentage or dollar amount away from an instrument’s current market price. It is used to secure profits when you are in a winning trade, while not having to exit the position.

Charting

Charting features are robust. MetaTrader 4 offers:

• 30 technical indicators. These include classic trend indicators, volume indicators and oscillators.
• 23 analytical objects. These include lines, channels, Gann and Fibonacci tools.
• 9 time frames Each instrument can be displayed in nine time frames, from one minute to one month.
• 3 chart types. Traders can choose between Bar Charts, Japanese Candlestick Charts and Line Charts.

Advanced Features

MetaTrader is also popular due to its copy trading and automated trading features.

• Trading Signals. Signals in MetaTrader 4 allow users to automatically copy the activity of other traders in real time.
• Automated trading. MetaTrader 4 allows users to develop, test and apply Expert Advisors (EAs). EAs are programs that monitor and trade markets using algorithms. They find opportunities according to set parameters and then either create a notification or automatically open a trade.

To conclude, the MetaTrader 4 desktop platform is one of the most feature-rich and popular trading platforms in the world. It does not have the most beautiful interface and it does require some time and effort to learn, but that is typical of advanced platforms.

Web Platform

The MetaTrader Web Platform (WebTrader) is a slightly stripped down version of the desktop platform. It allows you to trade without any additional software, only an internet connection is required. The Web Platform allows users to trade directly from any browser and operating system. FairMarkets clients can access WebTrader from within the client portal.

Popular features include:

• One-click trading.
• Trading from the chart.
• Watchlists with real time quotes.
• Trade History.
• Advanced charting with 30 indicators for technical analysis.

Note: copy trading and automated trading are also only available on the MT4 desktop platform. The web platform is not as intuitive as some rival platforms among CFD brokers, but it offers a strong range of features.

FairMarkets Mobile App

For mobile trading, FairMarkets offers the MetaTrader 4 mobile app, which is available for Android and iOS. The app offers popular features such as alerts, 1-click trading and trading from the chart. The MetaTrader 4 mobile app also provides a broad range of order types including pending and stop-orders. However, trailing stop loss orders are only available from the desktop platform.

The MT4 app is feature rich, but not as slick and user-friendly to navigate as the proprietary apps of some competing brokers. Also, in order to change the language of the MT4 app, you must change the language for your entire phone

Order Execution

FairMarkets is a dealing desk/market maker broker, meaning that they act as a counterparty to every client transaction. They set the bid (buy) and offer (sell) prices internally and automatically take the other side of a client’s trade. This contrasts with STP/ECN brokers who provide clients direct access to other market participants. STP stands for straight-through processing and ECN stands for electronic communications network. STP/ECN brokers charge commissions but trading fees can end up being lower for active traders, using this model of brokerage.

Tradable Instruments

FairMarkets offers access to the forex market and commodity, stock index and cryptocurrency CFDs.

What are CFDs?

CFDs (Contract for Differences) are financial derivative products that allow traders to speculate in various markets without owning the underlying assets.

What Can You Trade with FairMarkets?

Tradable instruments at FairMarkets include the following assets:

• 30 Currency Pairs. A currency pair combines two different currencies, with the value of one currency quoted against the other. For example EUR/USD, which reflects the value of the euro measured in dollars.
• 9 Index CFDs. An index is a basket of trading instruments that is used to gauge a market sector, stocks within an exchange or the economy of a country.
• 4 Commodity CFDs. Commodities are raw products, such as gold and oil.
• 3 Cryptocurrency CFDs. Cryptocurrencies, such as Bitcoin, are digital currencies that are secured by cryptography.

Below is a sampling of instruments across the various asset classes.

Customer Support

We tested FairMarkets via the available support channels (phone and email). Responses via email took a couple of days. We were unable to get support via phone, but a representative responded via email offering direct support.

The representative was helpful and courteous. There is no chat support, which is typically the most practical solution for traders seeking help. For FairMarkets Australia, support is only available in English, but FairMarkets International can assist clients in 9 languages.

Deposit and Withdrawal

The base currency is the currency in which your account is denominated. FairMarlets offers 4 base currencies which you can use to open an account: EUR, USD, GBP and AUD.

FairMarkets Deposits

Deposits are free and can be made via credit card, digital wallet or bank transfer.

FairMarkets Withdrawals

Withdrawals are also free at GKFX including withdrawals via bank wire. Here are the available

withdrawal methods and the time it takes for them to be processed:

Account Types and Terms

FairMarkets Account Opening Process

Opening an account at FairMarkets is seamless but features a rather lengthy questionnaire for the Australian entity. Clients start out by entering their name, country of residence, email, phone and create a password. Next individuals can choose whether they want to open a demo or live account. Users then choose between MetaTrader 4 or 5, select their account type (Standard or Aussie Premium) and base currency (EUR, USD, GBP, AUD). Another password must be created for MetaTrader.

During the Regulatory Assessment questionnaire prospective clients must provide information relating to the following:

• Country of residence.
• Scope of trading activities.
• Net assets.
• Gross income.
• Size of financial instrument portfolio.
• CFD transactions of significant size.
• Work experience.
• Education level.
• Questions relating to leverage and margin.
• Length of trading experience.
• Level of trading activity.

The Know Your Customer (KYC) questionnaire aims to ensure that brokers understand the risk tolerance, investment knowledge, and financial position of prospective clients. For the KYC section, individuals must provide the following information:

• Name and address.
• Residence and nationality.
• National Identification Number (National ID).
• Employment status, position and annual income.
• Total assets, liquid assets, origin of assets.
• Trading objective (speculation, hedging, capital gains etc.)

Finally, prospective customers must provide proof of identity by uploading a copy of documents such as passport, national ID card or driver’s licence. In addition, proof of address must be provided using documents such as driver’s licence, national ID card, bank statement or utility bill.

What Account Types does FairMarkets Offer?

In the table below, we cover the key features of the 2 different account types: Standard and Aussie Premium.

FairMarkets International offers 4 account types: Standard Fixed, Standard Variable, VIP Variable and Raw Zero.

The table below compares the main features of these account types.

Leverage

One of the reasons that traders are attracted to the forex and CFD markets is the high degree of available leverage. Leverage is the use of borrowed funds to increase the size of your trading positions beyond what would be possible using only the cash in your account.

Both Standard and Aussie Prime accounts offer a maximum of 1:30 leverage.This means that with an account of $1,000, you can control up to $30,000 worth of positions in the market.

Leverage is often described as a ‘double-edged sword’ because it can amplify both your profits and losses. Leveraged trading comes with a high level of risk and can often result in significant losses.

FairMarkets Demo Accounts

FairMarkets offers a free demo trading account, which expires after 30 days. This is especially important for beginners as it enables them to practice their strategies and get comfortable with the trading platform without risking any real money. Both Standard and Aussie Premium demo accounts are available using either MetaTrader 4 or MetaTrader 5.

The demo account features live quotes and simulates live market conditions in all the markets offered by FairMarkets, such as forex and CFDs on commodities, indices and cryptocurrencies. Once you have got up to speed on a demo account, you can easily switch over to a live account.

Islamic Accounts

FairMarkets does not currently offer swap free Islamic accounts.

FairMarkets Supported Countries

FairMarkets Australia (FairMarkets Trading Pty. Ltd.) supports clients from Australia. FairMarkets International (GK Trade International Ltd.) accepts clients globally. Like most CFD brokers, FairMarkets does not accept clients from the United States or from FATF (Financial Action Task Force) blacklisted countries North Korea and Iran.

Research

Trading Central combines award-winning automated investment analytics and analyst research.

Popular features include:

• Alpha Generation. A pack of three indicators that represent market psychology and assist with identifying new trade opportunities and potential entry/exit points.
• Analyst Views. Offers directional guidance in real time based on the analysis from industry experts.
• Adaptive Candlesticks. Scans for sixteen classic candlestick patterns, instantly on any chart.
• Adaptive Convergence Divergence (ADC). Provides signals based on components including price lines, indicators and oscillators.

Trading Central offers materials useful to both beginners and experienced traders, ranging from basic market commentary to advanced technical tools.

Education

The Bottom Line

FairMarkets (FairMarkets Trading Pty. Ltd.) can cater well to specialised traders in Australia with competitive fees and advanced tools. Clients also have the reassurance of the robust regulatory protections guaranteed by ASIC. An improvement in customer service and the inclusion of educational materials would help to round out the offering of this forex and CFD broker.

FAQ