SquaredFinancial Review 2024

Trust

SquaredFinancial Regulations

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

This is what I discovered about the two entities operating under the SquaredFinancial trade name:

• SquaredFinancial (Seychelles) Limited is licensed and regulated by the Financial Services Authority (FSA) of Seychelles under license number SD024. We rate the FSA as a Tier-3 regulator.
• SquaredFinancial (Cyprus) Limited is licensed and regulated by the Cyprus Securities and Exchange Commission (CySEC) under license number 329/17. We rate CySEC as a Tier-1 regulator.

We have summarized the most essential aspects of SquaredFinancial in terms of regulation and safety in the table below:

Why is it Important to Know Where Your Broker’s Subsidiaries are Regulated?

Brokers operate multiple entities because it allows them to serve clients worldwide. However, licenses obtained by regulators in different jurisdictions do not always entail the same degree of protection. Some regulators mandate compliance with the strictest financial frameworks, whereas others are less rigid. That is why traders need to familiarize themselves with the safety mechanisms ensured by the entity they want to open an account with beforehand.

Here is what you need to look for in a broker in terms of safety mechanisms:

• Segregation of client funds. Keeping client funds in segregated bank accounts from the ones used for the broker’s corporate capital negates the risk of accounting errors. Both SquaredFinancial entities ensure segregated client funds.
• Negative balance protection. This safety mechanism removes the risk of trading losses exceeding the account balance. In other words, the losses you incur from trading are capped at the amount you have put in your trading account. This is especially important in volatile markets. Only CySEC-regulated entity ensures negative balance protection.
• Compensation scheme. A compensation scheme protects traders against the broker’s liabilities in the unlikely event that the company becomes insolvent. The Cyprus-based entity provides compensation of up to EUR 20,000 under the Investor Compensation Fund (ICF).
• Maximum leverage. Capping the maximum leverage restricts the extent of market exposure to retail traders. The higher the leverage, the higher the potential profits and potential losses. The maximum leverage with SquaredFinancial is 1:500.

Is SquaredFinancial Safe to Trade With?

The broker is regulated internationally and adheres to some essential safety requirements, like keeping its clients’ funds in segregated accounts. However, the FSA-regulated entity does not ensure negative balance protection, allows rather high maximum leverage, and its stop-out levels (at 30%) are quite low. The broker seems sufficiently safe, however, I would recommend traders be cautious of its rather loose safety nets.

Stability and Transparency

In our Trust category, we also evaluate factors related to stability and transparency, focusing on the broker’s longevity, company size, and the availability of transparent information.

I found SquaredFinancial to be transparent regarding its fees, and I did not see any major discrepancies between what is stated on the website and what is charged by the broker.

I also reviewed SquaredFinancial’s legal documents and found everything to be in order. There are no significant omissions or misleading language that could confuse readers.

The broker has issued an ‘order execution policy,’ which is a written commitment to deliver the optimal price quotes under the prevailing market sentiment. Furthermore, SquaredFinancial has a robust client categorization policy during account creation, segregating experienced from inexperienced traders.

In summary, my research indicates that SquaredFinancial can be regarded as having a decent level of trust and stability due to the following factors:

• Authorized by Tier-1 regulator
• Has issued an “order execution policy”
• Has a robust client categorization policy

Fees

SquaredFinancial Trading Fees

SquaredFinanical Spreads

I tested SquaredFinancial’s spreads during the most actively traded times – the London open at 8:00 a.m. GMT and just after the U.S. open at 2:45 p.m. GMT. The test was conducted on the 9th of February 2024. The results are shown in the table below:

Broken down by asset class and compared to the industry average, SquaredFinancial charges low spreads on share CFDs, low-to-high spreads on commodities, average spreads on indices and cryptocurrencies, and average-to-high spreads on currency pairs.

SquaredFinancial Commissions

The SquaredPro account is commission-free, but the SquaredElite account type features a $5 commission per traded lot (100,000 units). The commission is round-turn, meaning $2.5 is charged for opening a position, and then an additional $2.5 is charged to close it. The commission rate falls below the industry average ($6). This makes it better suited for high-frequency trading.

SquaredFinancial Swaps

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.

My tests indicate that SquaredFinancial charges average-to-high swaps. This combination is not particularly suitable for day trading or position trading.

SquaredFinancial’s Non-Trading Fees

There is a $50 dormancy fee charged on accounts that have been inactive for longer than 3 months. The fee is charged monthly until activity resumes or the account balance drops to zero.

The broker does not charge a handling fee for deposits or withdrawals, though third-party banking fees may apply depending on the payment method.

Are SquaredFinancial’s Fees Competitive?

SquaredFinancial’s fees vary. The SquaredPro account has less competitive prices, but with a minimum deposit of $250, it is quite accessible. In contrast, I found that the SquaredElite account offers more competitive rates than the industry average for trading costs. However, the relatively high minimum deposit requirement of $5,000 makes the broker less accessible to a wider audience.

Traders should also keep in mind that the overall cost varies greatly from one asset class to another. For instance, the broker offers generally favorable conditions on most share CFDs, but its crude oil spread is quite elevated.

Accounts Comparison

I have compiled the table below to help you better understand the difference between the trading fees on SquaredFinancial’s accounts and the industry average. It illustrates the spreads and commissions I have recorded for the EUR/USD pair and compares them against the typical costs for ECN and STP accounts in the industry at large.

The table demonstrates how much you would have to pay to trade 1 full lot (100,000 units) on the EUR/USD with a pip value of $10 for each account.

To calculate the cost of such a full-sized trade, I used this formula: Spread x pip value+commission

My tests reveal that SquaredFinancial’s Pro account has trading costs that generally meet the industry average for STP accounts. On the other hand, its Elite account type features a more favorable combination of spreads and commissions. I rate it as more competitive than the common STP account type and matches the conditions of a typical ECN account type.

Platforms and Tools

SquaredFinancial Platforms Walkthrough

MetaTrader 5 features multiple essential tools like one-click trading, an alarm setting option, and a market depth tool. These allow traders to examine various market developments from different angles and to exploit the underlying trading opportunities in multiple ways.

MT5 is arguably best suited for automated trading via its Expert Advisors (EAs) feature. The platform also has an intuitive strategy tester, allowing experienced algo traders to tweak the parameters of their strategies so that they can be used under different market conditions. Additionally, SquaredFinanical offers Virtual Private Server (VPS) hosting for enhanced execution speeds.

The Desktop Version of SquaredFinancial’s MT5 Platform

General Ease of Use

MT5’s layout is pretty straightforward. Account info is displayed at the bottom of the screen; charts occupy the middle portion of the window; a watch list of selected instruments and tools screen is positioned on the left side of the window; and a panel with various settings and configurations can be found at the top of the window.

Charts

I consider the charts screen a platform’s most important feature. It facilitates technical analysis by providing an overview of price action behavior. Chart artists use many analytical tools and chart configuration possibilities to examine it from multiple angles. In my experience, the really important aspect of a chart is how easy it is to scale price action up and down.

I have broken down the available analytical tools and chart configurations below:

• 38 technical indicators. The platform supports trend-based, volume-based indicators, oscillators, and more. These can be applied to study price action behavior and determine the underlying market sentiment. In general, technical indicators are used to gauge where the market is likely to head next. The problem with MetaTrader 5, in my opinion, is that applying 2 or more indicators to the chart obscures price action rather than contextualizing it. This is due to the ruggedness of MT5.
• 24 drawing tools. Drawing tools, such as Fibonacci retracement levels and Elliott waves, are used to study repeatable price patterns. Additionally, they can be applied to determine key support and resistance levels and potential breakout or breakdown levels. Despite the rather big collection of drawing tools, the ruggedness of MT5 makes it difficult to discern price action behavior.
• 21 timeframes. One of the standout features of MetaTrader 5 is its vast array of timeframes. MT5 allows multi-timeframe analysis of price action behavior. The greater the number of timeframes, the more intricate examinations that can be carried out across the short-term and long-term.
• 3 chart types. Price action can be represented as a line, bars, or candlesticks. This diversity makes it possible to examine potential trading opportunities from different angles.

Orders

I have broken down the available order types on the MetaTrader 5 platform below:

• 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 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. They are used to support open positions by limiting the maximum loss that can be incurred if the market turns in the opposite direction. A stop-loss order is placed at a fixed price below or above the spot price. If the market does indeed turn and triggers the stop-loss, it will transform into a market order and get filled at the best possible price.

My Key Takeaways After Testing the MetaTrader 5 Platform

MT5 is a good option for fast and simple order execution. On the other hand, its dated and rugged design falls short compared to newer, sleeker platforms. As a trader who prioritizes flexible chart scaling, I find MT5’s charting capability too rigid and less effective.

SquaredFinancial’s MT5 Mobile App

The mobile app version of MT5 affords quick and easy access to the market on the go. It is very useful for opening, terminating, and adjusting open positions.

The market is continually evolving, marked by periodic surges and declines in volatility. For this reason, staying abreast of the latest market developments is crucial, a task made simpler through the mobile app version of MT5.

You can also use the app to place market, limit, and stop orders, as well as to adjust the exposure of your open trades.

My Key Takeaways After Testing MT5’s Mobile App

MT5’s mobile app suffers from the same underlying problem inherent to other mobile apps. Analyzing price action behavior on low-resolution devices is extremely difficult. That is why I recommend using the mobile app only to monitor the development of your open positions and make changes if needed.

Tradable Instruments

Compared to the industry average, SquaredFinancial offers an average amount of FX pairs, commodities, and cryptocurrencies and a high amount of share CFDs and indices.

What Are CFDs?

Contracts for difference (CFDs) are derivatives used to speculate on the underlying asset’s price without physical delivery. For example, a long position on gold would generate profit as the price rises or incur a loss as it falls, all without the need to purchase actual gold bars.

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. CFDs are leveraged products. Trading in CFDs carries a high level of risk and thus may not be appropriate for all investors.

What Can You Trade With SquaredFinancial?

My Key Takeaways After Exploring SquaredFinancial’s Instruments Offering

I concluded that SquaredFinancial’s assortment of instruments is best fitted for speculative trading due to the abundance of characteristically volatile instruments, such as share CFDs, indices, and cryptocurrencies.

However, the inclusion of 19 futures contracts also makes it possible for traders to hedge their positions by locking into trades with predetermined execution prices for some future delivery.

Customer Support

Customer Support Channels

Customer Support Test

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

I completed my test on 12 February at around 2:45 p.m. CET via live chat. I inquired into SquaredFinancial’s security, execution performance, and deposit and withdrawal policies.

Before you connect to a live agent, you have to enter your name, email address, and phone number.

An agent connected to my chat almost instantaneously. She was very polite throughout the conversation, leaving a pleasant impression on me; her answers were concise. My only concern was that, occasionally, her responses to even trivial questions took longer than expected.

Deposit and Withdrawal

SquaredFinancial Deposit Methods

SquaredFinancial Withdrawal Methods

Account Types and Terms

Why is Choosing the Right Account Type Important?

Your account should reflect your goals, needs, and ambitions on the market. You should take into consideration several factors, such as whether the account type has a minimum deposit requirement, its spreads and commissions, the execution method, and more.

What Account Types Does SquaredFinancial Offer?

I have broken down the features of SquaredFinancial’s retail account types below.

The SquaredPro account type is unsurprisingly the most affordable of the two, with a minimum deposit requirement of only $250. However, its trading fees exceed the industry average.

What is important to point out is the combination of high margin call, low stop-out, high leverage, and no negative balance protection. These factors add up to a potentially dangerous mix where reckless (or inexperienced) traders could very easily lose a vast portion of their accounts or even their entire balance. Essentially, this combination accommodates the execution of risk-taking strategies at the expense of rigid safety nets.

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 positions. The leverage multiplies the profits a trader generates from winning positions but also the losses incurred from failed trades.

SquaredFinancial’s Execution Model

SquaredFinancial operates as an STP broker without a dealing desk. It averages execution speeds of around 100 milliseconds, which more or less matches the industry average. This performance is not particularly suitable for high-frequency trading because it risks negative slippage. However, it’s perfectly fine for intraday trading and day trading.

SquaredFinancial Account Opening Process

The account creation process with SquaredFinancial is straightforward and quick. You can go at your own pace and be done with everything within an hour. I have summarized the step-by-step process below:

• Step 1. Click ‘Open Account’ at the top-right corner of the main page.
• Step 2. Enter your name, country of residence, and other personal information.
• Step 3. State your financial and wealth information, including your employment status, annual income, etc.
• Step 4. Disclose your trading experience (if you have any).
• Step 5. Enter your tax information.
• Step 6. Acknowledge SquaredFinancial’s terms and conditions.
• Step 7. Configure your account settings (choose a type, leverage, currency).
• Step 8. Upload proof of ID and proof of address to verify your account.

Demo Account Important

SquaredFinancial offers demo accounts that introduce traders to the broker’s services and allow them to tweak their strategies in a risk-free environment. The market is continually evolving and never static, so it is important to hone your skills in a safe environment. You can set up a demo account for yourself alongside your live CFD account.

Islamic Account

SquaredFinancial offers Islamic accounts for swap-free trading, as mandated under Shariah law. Traders who want to open an Islamic account need to contact the broker’s customer support and request the service from there.

SquaredFinancial Restricted Countries

SquaredFinancial Seychelles’ services are not directed towards clients from certain jurisdictions such as EU/EEA member states, UK, USA, Canada, Australia, New Zealand, FATF-listed countries including, among others, Iran, North Korea, Cuba, Syria, Belarus, Myanmar (Burma), Russia, South Sudan, Venezuela, and Yemen.

Research

I have broken down SquaredFinancial’s research content by type below:

Market Insights

Daily updates on current market developments assist traders in grasping the prevailing market sentiment more effectively. Each article closely examines the economic factors influencing price action. I appreciated the inclusion of numerous charts as they aid traders in comprehending the analysis more clearly.

Market Watch

The Market Watch tool is used for monitoring price fluctuations of groups of assets (forex pairs, commodities, etc). Essentially, it serves as a market sentiment gauge. The tool is useful for determining where the market is likely to head next, to anticipate upsurges and downsurges in volatility.

Newsfeed

Being frequently updated, the newsfeed highlights the latest economic and financial news. However, it lacks supporting charts or graphs.

Additionally, summaries of recent news are available in video format in the website’s ‘Daily News’ section.

Economic Calendar

The economic calendar is an essential tool in a trader’s arsenal. It informs traders of upcoming market events and releases that have the potential to stir price action, thereby creating viable trading opportunities.

My Key Takeaways After Exploring SquaredFinancial’s Research Materials

I appreciated SquaredFinancial’s research content for its insightfulness and scope. It is updated regularly and does a good job of helping traders understand what is driving the market at all times.

However, the broker does not provide actionable trading ideas and does not incorporate any third-party content, such as Autochartist’s market breakdowns or Trading Central’s market buz features.

Education

I have broken down SquaredFinancial’s educational content below:

Talk Show

A podcast featuring two market experts, Noureldeen Hammoury and Dominique El Khoury, who regularly appear on reputable news outlets such as Bloomberg, discusses market developments and trends. I found it valuable for traders seeking to comprehend the market’s driving forces at all times.

Webinars

SquaredFinancial conducts webinars in English every day. There are several main topics, including ‘Introduction to Forex,’ ‘Basic Class Bootcamp,’ ‘Weekly Outlook,’ and more. The webinars are informative and provide very practical insights.

eBooks

The broker offers a variety of educational books covering the basics of trading. There are also books dedicated to technical analysis, fundamental analysis, and the psychology of trading. This resource is particularly beneficial for beginners, providing them with a comprehensive and detailed understanding of crucial trading concepts.

Educational Videos

SquaredFinancial boasts an extensive library of 98 educational videos, organized into three distinct categories: markets and tradable instruments, trading strategies, and trading platforms. These videos are an excellent supplement to the educational books.

The Bottom Line

SquaredFinancial has almost 20 years of operating history and is regulated by top-tier CySEC and offshore FSA Seychelles. After thorough research, I consider it a sufficiently safe and transparent broker.

SquaredFinancial incorporates the widely used MT4 and MT5 platforms and provides VPS hosting. It stands out for its extensive range of educational and research materials, along with an advanced social trading feature.

SquaredFinancial accommodates various trading strategies and provides access to over 2000 instruments across multiple markets, meeting the needs of intraday and day traders.

With median execution speeds around 100 milliseconds, SquaredFinancial matches the industry standard. The broker’s trading fees vary. The spreads on its commission-free SquaredPro account are slightly above the industry average, but I discovered that the SquaredElite account type offers a more competitive pricing structure (commissions and spreads).

FAQ