HYCM Review 2023

Trust

HYCM Regulations

In our reviews, we examine the licences and regulations of each entity operated by a broker. This allows us to compare each entity’s different levels of protection. We rank licences by various regulatory bodies on a three-tier system, where Tier-1 licencing indicates the highest level of regulation.

Here is what we found concerning the several entities operating under the HYCM Capital Markets Group:

• HYCM Capital Markets (UK) Limited is authorised by the Financial Conduct Authority (FCA) in the UK, under reference number 186171. The FCA ranks as a Tier-1 regulator on our system.
• HYCM (Europe) Ltd is licenced by the Cyprus Securities and Exchange Commission (CySEC) under licence number 259/14. CySEC ranks as a Tier-1 regulator on our system.
• HYCM Capital Markets (DIFC) Limited is authorised by the Dubai Financial Services Authority (DFSA) with licence number F000048. DIFC ranks as a Tier-2 regulator on our system.
• HYCM Ltd is licenced and regulated by the Cayman Islands Monetary Authority (CIMA) under licence number 1442313. CIMA ranks as a Tier-3 regulator on our system.
• HYCM Limited is registered as a Business Company in Saint Vincent and Grenadines with registration number 25228 (BC 2018). It is unregulated.

We have summarised the most essential aspects of HYCM’s entities in terms of regulation and safety in the table below:

*Under the UK’s Financial Services Compensation Scheme (“FSCS”).

Why is it Important to Know Where Your Broker is Regulated?

As is the case with HYCM, a broker can have multiple entities operating under the same trade name. And when these entities are located in different parts of the world, they become liable to local jurisdictions and thus licenced by different types of regulators. The safety procedures mandated by regulators differ from region to region. That is why traders need to be aware of what protections they are guaranteed by the regulator overseeing their chosen entity.

We have listed the most important safety policies to look for in a broker below:

• Segregation of client funds. Keeping client funds in separate bank accounts from the ones used by the broker for its own corporate capital is essential for decreasing the risk of accounting errors. All of HYCM’s entities ensure the segregation of client funds except for the St. Vincent and the Grenadines one.
• Negative balance protection. Essentially, negative balance protection is a policy that precludes the possibility of a trader’s losses exceeding their balance. All of HYCM’s entities adhere to this requirement.
• Compensation scheme. A compensation scheme protects the company’s clients against its liabilities and the risk of becoming insolvent. Except for HYCM Ltd. and HYCM Limited, the company’s other three entities have such schemes.
• Maximum leverage. The maximum permitted leverage differs greatly from one regulator to the next. It is difficult to say what is optimal for retail traders since the leverage at once multiplies the profit and loss potential of a position. The more strict regulators tend to cap the maximum allowed leverage in order to limit a trader’s market exposure. With HYCM Capital Markets (UK) Limited and HYCM (Europe) Ltd, the maximum leverage for retail traders is set at 1:30. This is markedly lower compared to the other entities.

Is HYCM Safe to Trade With?

The HYCM Capital Markets Group consists of 5 separate entities with varying degrees of protection. With regards to HYCM Capital Markets (UK) Limited, we found the entity very safe and reliable. It is licenced and authorised by arguably the most trusted regulator in the industry – the FCA in the UK – and it adheres to all essential safety regulations.

The risks of accounting errors and adverse market exposure are minimised, while the risk of incurring a negative balance is completely removed. Additionally, clients of the entity are protected against its credit risk. They can be compensated by up to 85,000 GBP if the entity goes bankrupt. This is the biggest compensation scheme in the industry.

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, how big the company is, and how transparent it is in terms of readily available information.

HYCM Capital Markets (UK) Limited was founded in 1977, and its longevity in the often turbulent financial industry attests to its overall stability and successful business plan. During those more than four decades on the market, the broker has been awarded multiple times for its accomplishments, including “Best Forex Broker for 2019” by Global Brand Awards and “Best Mobile Trading App for 2020” by World Finance.

What makes the broker very transparent is the clear and concise Legal Docs section on the website. Information pertaining to safety policies, costs, and best execution practices is detailed and unobscured by complicated terminology. All of this makes HYCM Capital Markets (UK) Limited very reliable and trustworthy.

In summary, our findings indicate that HYCM Capital Markets (UK) Limited can be regarded as having a very good level of trust and stability due to the following factors:

• The broker is licenced by a top-tier regulator (FCA).
• It complies with all safety procedures and requirements.
• It is very transparent.

Fees

HYCM’s Fixed and Classic account types offer a combination of commission-free trading and variable spreads (fixed on the former and floating on the latter), while the Raw account type has spreads starting from 0.1 pips and round turn commission of $8. The overall competitiveness of HYCM’s trading costs is further bolstered by its low swap charges.
As regards its non-trading costs, there is a maintenance fee charged on dormant accounts, which is normal for the industry. HYCM also has very good conditions in terms of deposits and withdrawals.

HYCM Trading Fees

HYCM’s Spreads

We tested HYCM’s spreads during the most actively traded times – during the London open at 8 AM GMT and just after the U.S. open at 2.45 PM GMT. The test was conducted on the 10th of October 2022.

* Not available on HYCM’s MT5 platform, only on the MT4

The spreads on a Classic HYCM account are low to medium compared to the broader industry. It is a positive sign that there aren’t considerable discrepancies in the recorded spreads between the AM and PM sessions, except for indices. This suggests a robust liquidity supply at most times.

HYCM’s Swap Rates

A swap fee is a trader’s cost for holding an open position overnight because of changing interest rates. Swap long refers to the charge deductible or credit receivable for holding a buy position open overnight. In turn, swap short relates to the charges/credits deductible or receivable for holding a selling position open overnight.

The values listed below are for one full contract (100,000 units) of the base currency.

At the time when we collected our data, HYCM’s swap charges were very low. However, keep in mind that rollover charges are subject to underlying volatility, meaning they are likely to change in the future. Still, HYCM offers swap-free trading via its Islamic accounts.

HYCM’s Commissions

HYCM charges a $4 round commission on instruments from all asset classes on its Raw account type. This commission is charged for opening a position worth 1 lot (100,000 units). Closing the same position will incur another $4 commission. Thus, HYCM charges an $8 round turn commission per 1 traded lot.

HYCM’s Non-Trading Fees

Inactive accounts – accounts that have laid dormant for a period of 90 consecutive days – are charged an administrative fee of $10 or an equivalent amount, depending on the account’s base currency. This fee is deducted from the account monthly until activity resumes or the account balance drops to zero.

HYCM does not charge any handling fees for deposits or withdrawals, though third-party fees may apply.

Are HYCM’s Fees Competitive?

HYCM’s fees are overall very competitive. High-frequency traders may find the Fixed and Classic account types preferable because they permit commission-free trading. More risk-averse traders may lean towards the former and its fixed spreads starting from 1.5 pips. Less risk-averse traders, in turn, may opt for the latter and its floating spreads starting from 1.3 pips. Fixed spreads, though slightly higher, ensure stability at times of heightened market volatility, while floating spreads are lower at normal times.

Accordingly, high-volume traders who do not open as many positions may find the Raw account type more suitable. Its competitive edge comes from the very low spreads starting from 0.1 pips, while the $8 round turn commission is pretty average for the industry.

Platforms and Tools

When choosing between the two alterations of MetaTrader, clients of HYCM should consider which instruments are available on either platform (further information is available here). As regards MT5, it has some of the industry’s most important features, such as one-click trading. Those interested in automated trading can also take advantage of MT5’s Expert Advisors (EA) option. There is, however, no social trading.

The desktop version of MT5 consists of multiple charting tools that make it possible to execute probing technical analyses. Its mobile app version, in contrast, is more rugged and consisting fewer features, though its one advantage is that it allows trading on the go. Alternatively, traders can download HYCM’s proprietary mobile platform from the App Store or Google Play.

HYCM’s Desktop MT5 Platform

General Ease of Use

The platform is easy to navigate, though its outlook is somewhat rugged. Price action is represented in a wide window in the middle, but the transition as it gets scaled up and down is not as smooth as on other platforms. MT5 has multiple features and supporting tools that make it easier for traders to pick up good potential setups. However, it lacks the aesthetic feel and user-friendly design of more modern platforms like TradingView.

Charts

The chart is arguably the most important component of every platform. There are all kinds of traders looking for different types of signals, which is why a platform’s chart needs to accommodate a wide variety of styles. For instance, range traders may be monitoring price action for signs of rebounds and dropdowns from major support and resistance levels. Conversely, contrarian traders may be looking for signs of range breakouts and breakdowns or trend reversals.

We have listed the most important features of MT5 below:

• Trading indicators. The chart comprises 38 technical indicators used to gauge market sentiment and forecast possible price action behaviour. These indicators fall into several categories, the most significant being trend-based, volume-based, and oscillators.
• Drawing tools. There are 24 types of drawing tools, including lines, channels, Fibonacci levels, and others. These are used to outline trends and ranges and key support and resistance levels. Drawing tools are thus also used to forecast potential trend continuations and reversals.
• MT5 has 21 different timeframes, which is arguably its greatest advantage. This huge variety affords traders an intricate outlook into the subtle changes in price action behaviour.
• Chart types. There are only 3 chart types on the platform. Traders may choose to represent price action as a line, using bars or candles.

Orders

Here is a list of the most essential order types available on MT5:

• Market orders. Market orders are used for immediate entry at the best possible price. If triggered, they guarantee volume filling, though there could be a discrepancy between the requested price and the price where the order actually gets filled.
• Limit orders. Unlike market orders, limit orders guarantee exact price execution. However, a limit order will not be filled if the price action does not reach the pre-determined execution price.
• Stop orders. These have multiple variations, the most popular ones being stop loss and trailing stop orders. Stop orders are usually used to cap the maximum losses that can be incurred from an underlying position. For instance, if the stop loss order is triggered after the market reverses, it will be transformed into a market order and filled at the best possible price.

HYCM’s Mobile MT5 App

The primary function of MT5’s mobile app is to afford traders quick and easy access to their accounts on the go. This is particularly useful when they need to make urgent corrections to their running positions but do not have access to the desktop platform. Compared to it, the mobile app lacks the same level of sophistication and precision.

General Ease of Use

The biggest perk of the app is that traders can promptly switch between its different components. On the other hand, price action is difficult to read because it is cramped on a small screen, which is a problem that is more or less inherent to all similar apps.

Charts

Below we have listed the most important features of the app’s charts:

• Trading indicators. The app has 30 different trading indicators, which are used to gauge market sentiment. The chart can be populated with indicators very quickly due to low resolution.
• Drawing tools. There are also 21 drawing tools, a bit fewer than on the desktop version. They are used for examining the direction of the price action and forecasting potential breakouts and breakdowns.
• Unlike the desktop version, the app has only 8 timeframes. It, therefore, affords a narrower outlook into price action behaviour.
• Chart types. The mobile app also has three chart types – line, bars, and candlesticks.

Orders

Here is a rundown of the order types available for execution through the mobile app:

• Market orders. Market orders are used for immediate entry at the best possible price. If triggered, they guarantee volume filling, though there could be a discrepancy between the requested price and the price where the order actually gets filled.
• Limit orders. Unlike market orders, limit orders guarantee exact price execution. However, a limit order will not be filled if the price action does not reach the pre-determined execution price.
• Stop orders. These have multiple variations, the most popular ones being stop loss and trailing stop orders. Stop orders are usually used to cap the maximum losses that can be incurred from an underlying position.

Tradable Instruments

HYCM scored below average in the Instruments category, which is its lowest mark.
The broker offers over 100 instruments from 4 different asset classes that can be traded as CFDs. There, however, are no complex instruments like ETFs or options. Moreover, some of the instruments can be traded on MT4 while others on MT5, but neither platform consists of all of them.

HYCM has a decent amount of FX pairs and commodities but almost no high-risk assets – there are only several shares and no cryptocurrencies. Crypto trading is only available with HYCM’s offshore entities (HYCM Limited and HYCM Ltd.). Nevertheless, HYCM’s assortment of indices exceeds the industry average, which is suitable for high-volatility traders.

What are CFDs?

Contracts for difference (CFDs) are derivatives used to speculate on the price of the underlying without physical delivery. For example, a long position on gold would generate a profit as the price rises or incur a loss as it falls. This is achieved without having to purchase actual bars of gold. One of the biggest advantages of trading CFDs is that traders can get in and out of the market almost instantaneously, thereby catching even minute changes in the price of the derivative.

What Can You Trade With HYCM?

We have listed the available instruments by asset class below:

• 70 Currency Pairs
  • Majors, Minors and Exotic
• 14 Commodities
  • Metals, Energy and Agriculture
• 11 CFD shares
  • S. bluechip
• 28 indices
  • S., Europe and Asia

Compared to the industry average, HYCM offers a high number of FX pairs, commodities, and indices but a low amount of shares. It should also be mentioned that all 70 FX pairs are available on MT5, but not all of them are present on MT4. The same is also true for HYCM’s commodities and indices. With regards to the 11 shares, they are only available on MT4.

Disregarding HYCM’s assortment of shares, the diversity of instruments from other asset classes is complemented nicely by HYCM’s low-to-average spreads on a Classic account.

Customer Support

The broker has multiple channels for contact, giving traders the flexibility to choose the most practical option for them. HYCM’s agents generally respond fast to queries, but their answers could be even more detailed and concise. Still, there is plenty of information available on the website.

HYCM’s Customer Support Test

When we test a broker’s customer support team, we evaluate the agents’ knowledge of their own website, how long it takes them to respond to questions, and how detailed their answers are.

We conducted our test on the 11th of October at 13 pm via the live chat option, available at the bottom-right corner of the main page. We requested additional information concerning the difference between HYCM’s Classic and RAW account types beyond what is stated on the website.

A bot responded automatically to our query and requested an email address to which further information was to be sent. We received a response several minutes later. The answer to the question was not particularly detailed and did not delve deeper than what can already be seen on the website.   

Deposit and Withdrawal

HYCM Deposit Methods

*Third-party fees may apply depending on the bank processing the transaction

HYCM’s Withdrawal Methods

Payments to and from accounts with HYCM can be transacted via wire transfer, credit or debit cards, or e-wallets. Waiting times for both deposits and withdrawals are generally low compared to the broader industry, and the minimum transaction requirements are reasonable. HYCM does not charge handling fees on deposits and withdrawals, though third-party fees may apply. For instance, withdrawals over $5,000 via Skrill and Neteller are subject to a 1% processing fee.

Account Types and Terms

The terms and conditions of HYCM’s retail accounts are also very good, incorporating some essential features such as the best execution policy. There is also a fine balance between costs and usability on all three account types. This allows traders to choose the one that matches their style and needs most closely. What we found particularly useful is HYCM’s questionnaire that helps traders with their choice.

Why is Choosing the Right Account Type Important?

Brokers have more than one account type in order to cater to the needs of different types of traders. Some have fixed costs and are generally more suitable for highly risk-averse traders who want stability even at times of heightened market volatility. Others have floating spreads and can either gain or lose their competitive edge, subject to changing market uncertainty and volatility. That is why choosing an account type that matches your personality and approach to trading is so important.

What Account Types Does HYCM Offer?

The greatest advantage of the Fixed account is that it is commission-free. As its name suggests, the spreads are fixed, meaning that traders know in advance what to expect for each instrument even when the market is at its most unpredictable. And even though it has higher spreads, on average, this could change when the market becomes volatile. The Fixed account also has a low minimum deposit requirement, but it does not accommodate automated trading. It is most suitable for highly risk-averse traders.

The Classic account type is HYCM’s most popular option. It also affords commission-free trading in combination with floating spreads. Unlike the former, the Classic account accommodates the Expert Advisors (EA) option. Its floating spreads fluctuate over time, subject to changing liquidity and volatility levels in the market. The Classic account is thus best fitted for beginners who do not yet have a system.

The Raw account type has spreads starting from 0.1 pips and an $8 round turn commission per 1 traded lot (100,000 units). It is most suitable for low-frequency clients, such as day and position traders, who tend to place high-volume orders several times per month.

What is CFD Leverage?

The leverage determines a trader’s overall market exposure. When trading Contracts for Difference (CFDs), positions can be opened for a fraction of their value because of the leverage. Essentially, the broker lends the trader money so that the latter can open bigger-sized positions. The leverage multiplies the profits a trader generates from winning positions but also the losses incurred from failed trades.

HYCM Account Opening Process

Here is a breakdown of the process of setting up an account with HYCM:

• Step 1. Click the ‘Open An Account’ button at the top-right corner of the main page. Fill in your name, email address, date of birth, and billing address information, or use a social account.
• Step 2. Choose a trading platform, account type, and base currency.
• Step 3. Declare whether you are a U.S. reportable person or a politically exposed person (PEP).
• Step 4. Proceed with the account verification on the client portal by uploading proof of ID and address.

Why is a Demo Account Important?

Demo accounts serve a twofold purpose. Prospective clients of the broker can use them to test its services in a safe environment before they decide whether to open and fund a live account. Additionally, traders use practice accounts to hone their skills and improve the parameters of their strategies without the risk of losing money.

HYCM Supported Countries

HYCM Capital Markets (UK) Limited does not serve residents of certain jurisdictions such as Afghanistan, Belgium, Hong Kong, Japan, the United States of America, and some other regions.

Research

To gain access to Trading Central’s sophisticated analyses and Market Buzz feature, clients of HYCM have to have a verified and funded account with the broker. The majority of HYCM’s in-house content can be accessed from its YouTube channel. The videos are very detailed and informative, providing traders with a well-rounded overview of minor and major market developments.

Research Tools

We have broken down HYCM’s research content by type:

• Economic calendar. The economic calendar informs traders of upcoming events and releases that are likely to result in potential trading opportunities. The calendar has filters that allow traders to screen such events by their importance and anticipated market impact.
• Trading calculators. HYCM’s calculators are very practical. Traders can use them to calculate the pip value, margin requirement, and currency conversion of trades they plan to execute.
• Fundamental analyses. HYCM’s YouTube channel has a playlist of nearly 300 videos examining the fundamental and technical outlooks of potential trading setups. Each video highlights the most important support and resistance levels on a given instrument and the underlying factors driving the price action.
• Seasonal pattern analytics. The broker’s YouTube channel has another specialized playlist consisting of over 360 videos on the impact of market seasonality. They provide a broader overview of market sentiment and the underlying factors shaping it.

Education

Most of HYCM’s educational content is on the broker’s YouTube channel. There are hundreds of webinars and videos on different trading topics ranging from technical to fundamental analyses. Guest speakers are often invited to provide their unique perspectives on a number of topics, affording traders a multi-faceted outlook on the general trading experience.

The website has a glossary and a rich collection of videos. The broker’s overseas entities also offer a dedicated blog containing a wide range of written articles, trading strategies, and practical trading tips. HYCM’s educational content delves deep into the intricacies of trading, covering both universal and abstract topics. It’s suitable for traders with different experience levels.    

The Bottom Line

HYCM is a multi-awarded derivatives broker that is globally represented in some of the biggest financial hubs in the world – the United Kingdom, Hong Kong, Cyprus, and Dubai. Since its foundation in 1977, HYCM has been growing and improving steadily, turning itself into a trustworthy and reputable broker. It is currently trusted by clients from over 140 different countries.

The multi-regulated broker has very competitive fees and an assortment of diverse account types catering to the needs of different traders – from scalpers to day and position traders. Its research and education materials are rich and informative, helping both novice and experienced traders gain a competitive edge in a highly volatile market environment.

In contrast to HYCM Capital Markets (UK) Limited’s licencing by the FCA, some of the other subsidiaries of the HYCM Capital Markets Group have weaker offshore regulations or are not regulated at all. Another drawback is the lack of diversity of available trading instruments. There is also room for improvement in HYCM’s customer support.

The very high trust level of HYCM Capital Markets (UK) Limited and its very competitive spreads and top-of-the-line supporting materials make it suitable for both beginners and advanced traders.

FAQ