OctaFX is a relatively new online forex broker that offers its services to over 100 countries around the globe. Read our detailed review of OctaFX to find out its main features, its advantages and disadvantages, and discover whether this broker will be right for you.

OctaFX Regulation

OctaFX was founded in 2011, with the operating company being Octa Markets Incorporated. Octa Markets Incorporated was registered in the Saint Vincent and Grenadines.

This means that its first financial regulatory authority is its license under the International Business Companies Act of Saint Vincent and Grenadines. It also subsequently obtained a license from the Caribbean Financial Services Authority.

In April 2015, OctaFX established a UK operating company, OctaFX UK Limited managed to obtain a license from the UK’s Financial Conduct Authority (“FCA”). This was a definite boost to the broker’s credibility given that the FCA is considered to be one of the most stringent and reputable financial regulators in the world.

This was particularly notable for OctaFX as while it was already regulated by the financial authorities in Saint Vincent and Grenadines as well as the Caribbean, those are not considered to be strict countries in terms of financial regulation and have a reputation for being very lax in that area.

Unfortunately, according to the official FCA website, as of 27 April 2017, OctaFX UK Limited’s status is listed as ‘no longer authorized’, meaning that OctaFX can no longer provide regulated products and services, but was previously authorized by the Prudential Regulatory Authority and/or FCA.

While this could potentially be an administrative mishap, such as OctaFX not renewing their license in time, we note that OctaFX’s official website does not list anything about FCA regulation. This means that more likely than not, OctaFX has decided to cease offering its services in the UK.

The loss of OctaFX’s FCA license is nothing short but a hard negative for the broker. In the overcrowded world of forex brokerage, many of which are either unregulated or are registered under weak regulatory bodies, the brokers that stand out are those that make the effort to obtain licenses from legitimate financial authorities such as the FCA. Without the FCA license, it looks like OctaFX rejoins the sea of weakly regulated forex brokers, which do little to inspire trust and confidence.

In conclusion, OctaFX’s current status as a ‘weakly regulated’ broker is a definite negative and potential traders should be aware that due to this lack of strong regulation, legal recourse against this broker will be weak or non-existent.

OctaFX Account Types and Minimum Balances

OctaFX offers three different types of accounts, each one tied to a particular trading platform. Some of their salient features and their minimum balances are described below.

MetaTrader 4 Micro Account: This is the account that OctaFX recommends beginners and novices use. The recommended minimum deposit is only $100. Only allows trading for forex plus gold and silver. No commission is charged but spread markups are applicable. As it is for newer traders, the margin call and stop out level is set at a lower 25% and 15%, respectively.

MetaTrader 5 Pro Account: This is what OctaFX recommends for the more experienced trader, consequently the recommended minimum deposit is a much higher $500. Allows for trading in all available asset classes.

No commission is charged but spread markups, which are lower compared to the micro account, are applicable. As it is expected to be used by more experienced traders, the margin call and stop out level is set at a higher level of 45% and 30%, respectively.

cTrader ECN Account: This one is recommended for the ‘progressive trader’ who wants the maximum amount of transparency in pricing. As an Electronic Communication Network account, it provides Direct Market Access, giving traders access to full market liquidity and the most transparent pricing.

Accordingly, it does not have any spread markups but rather charges based on commission instead. The recommended minimum deposit amount if $100 and traders can trade in forex, gold, and silver. The margin call and stop out level is set at 25% and 15%, respectively.

OctaFX also gives its traders the option of having a Shariah compliant Islamic account that can be applied to any of the three account types above. When converting any of the above account types to an Islamic account, there will be no swap fee applied during a rollover but a fixed fee instead.

The fee is not considered as interest, which is not permitted under Islamic law, but depends on the direction of a trader’s position. OctaFX has conveniently provided a commission calculator on their website which traders can use to determine how much the fee will be depending on the asset traded, the volume, and account currency.

As with many brokers, OctaFX also offers a demo account. A demo account can be opened for any of the three types of accounts above and has a virtual balance of $5,000.

While it is good that OctaFX offers a demo account, we note that the relatively low balance of $5,000 is below average compared to its competitors, some of which offer automatically replenishing demo accounts.

OctaFX Trading Platform

As mentioned in the account types section above, OctaFX has three different trading platforms: MetaTrader 4, MetaTrader 5, and cTrader. We will highlight the salient features and differences between each trading platform below.

• MetaTrader 4: The leading trading platform in the industry. Available on web, desktop, iOS, and Android. Offers signal trading, one click trading, advanced chart trading, and even auto-trading through its Expert Advisors feature. 9 possible timeframes. However, does not offer level II market depth or partial fills. Also has a reliable Virtual Private Server service for lower latency and faster execution.

• MetaTrader 5: The successor to the popular MetaTrader 4 platform. Available on web, desktop, iOS, and Android. In addition to having all the features of MetaTrader 4 such as signal trading, one click trading, advanced chart trading, and auto-trading, it also offers traders the options of volume calculation in units as well as lots, the ability to create and share chart screenshots automatically, and a built in economic calendar. It also has more timeframes, 21 in total but still does not allow partial fills or provide level II market depth. Its Expert Advisors feature also has a more integrated development environment which means programming savvy traders have the ability to program their own customized trading robot.

• cTrader: A highly popular ECN / DMA platform. Available on web, desktop, iOS, Android, and mobile browser. Gives level II market depth, auto-trading, full size tick charts, one click trading, and advanced chart trading. Its one click trading feature is also more advanced, allowing traders to reverse position in one click, double position in one click, and close all open positions in one click. Has 26 timeframes and allows for partial fills. However it does not allow for signal trading and has no real time market news or economic calendar. Comes with a cloud service to keep all accounts and templates in one place.

Like all forex brokers, OctaFX offers leveraged trading and the maximum amount of leverage depends on which account and associated trading platform a trader signs up for. The maximum amount of leverage is 500:1 however this depends also on which asset is being traded.

500:1 leverage is only offered for currencies on the MetaTrader 4 and cTrader platform. 200:1 leverage is offered for metals on the MetaTrader 4 and cTrader platform and for currencies on the MetaTrader 5 platform.

100:1 leverage and 50:1 leverage is provided for metals / energies and indices on the MetaTrader 5 platform, respectively. As you can see, maximum leverage on the MetaTrader 5 platform is significantly lower compared to the other two platforms.

While leveraged trading can increase returns, it also amplifies risk. As such, traders should be wary about highly leveraged trading as it can easily go south and wipe out most of the account’s equity or even wipe out more than the account’s equity, sending it into negative territory.

Fortunately in the latter case, OctaFX offers negative balance protection meaning that if a trader’s account balance moves into the negative, OctaFX brings it back up to zero. So a trader’s maximum loss is always capped at his or her deposit amount.

OctaFX Trading Tools

To assist with trading, OctaFX also provides traders with several trading tools that can be used to optimize the trading experience. Directly from the OctaFX website, traders can access the global economic calendar to view important events such as Non-Farm Payrolls.

There’s also a ‘Forex News’ section, a trading calculator to calculate figures such as pip value, trading fees, and swap values. Of course, there’s also another calculator for the most important metric, profit. You can also view central bank interest rates, national holidays, and live quotes from each trading platform.

OctaFX also has an interesting ‘Account Monitoring’ feature, which allows you to see each account details such as profit and loss, open trades, traded volume etc.

This is sort of a social trading feature where other traders will be able to monitor successful traders and possibly emulate their trades. Note that accounts are listed according to number only and no identifying trader information is shown.

Another feature that OctaFX offers is a trading signal service known as Autochartist. This service provides buy or sell recommendations based on four technical analysis patterns: triangles, channels and rectangles, wedges, and head and shoulders. These signals are delivered via email up to thrice daily.

OctaFX Asset Classes

OctaFX allows trading in four broad asset classes; currencies, metals, energies, and indices. In total there are 35 currency pairs, 4 metals, 2 energies, and 10 indices.

While most traders will be more than satisfied with this selection, the number of instruments available to trade with OctaFX is definitely significantly less compared to its competitors, which is a minus point.

OctaFX Trading Spreads and Commissions

OctaFX makes its own profits via spread markups and commissions, depending on which account type a trader signs up for. When using the MetaTrader 4 and MetaTrader 5 platforms, no commissions are charged and a spread markup is applied instead.

The opposite is applicable for the cTrader platform, where there are no spread markups but a commission is applied instead. The amount of spread markups that OctaFX charges vary, however, they are some of the tightest in the market.

On average, the minimum spreads range from 0.4 pips to 0.7 pips for currency pairs. You can view the current spreads live on the OctaFX website. For the commission when using the ECN / DMA cTrader platform, the trading commission is $2 – $3 per lot.

OctaFX Deposits and Withdrawals

OctaFX allows deposits and withdrawals through the following methods: Visa, MasterCard, bank transfer (traders in Malaysia and Indonesia can opt for a direct bank debit), Neteller, and Skrill. All currencies will be converted either to USD or EUR.

All deposits and withdrawals will be processed within a few hours if within operating hours or by the next business day. There is no minimum or maximum amount but note that withdrawal amounts cannot exceed the amount of free margin in an account. OctaFX also does not charge any fees for deposits or withdrawals, however fees might be charged by the respective payment processor.

OctaFX Trader Education

Like most forex brokers, OctaFX also maintains a trader education section, accessible via its website. Unfortunately, its trader education section is not very extensive, focusing only on Forex basics and is basically text only. Other than that, OctaFX provides a handy glossary as well as manuals for each trading platform.

Overall OctaFX’s trader education section, while helpful, pales in comparison to that provided by its competitors.

OctaFX Bonuses and Promotions

OctaFX has one main type of bonus, which it calls its 50% deposit bonus. This bonus is applicable only to the MetaTrader 4 Micro and MetaTrader 5 Pro accounts and must have a minimum deposit amount of $50. Traders do not have to claim the full 50%, they can elect to claim 10% or 30% as well.

Just like most bonuses, it come with terms and conditions and attached. In this case, in order for a trader to withdraw the bonus, there is a minimum trading volume which is calculated using the following formula: (bonus amount)/2 (bonus amount divided by two) standard lots.

Once those amounts have been traded, only then can the bonus be withdrawn. Bonuses can also be cancelled by the trader at any time. Bonuses will not be credited if account free margin is less than the bonus amount and if the account equity falls below the bonus amount, the bonus will also be cancelled. Bonuses have no time limit and do not expire.

In addition to the bonus, OctaFX also runs various contests. The current contests it is running as of May 2017 are the ‘OctaFX Champion Demo Contest’ and the ‘cTrader Weekly Demo Contest’.

In the first contest, traders who have the most successful demo account trades according to the contest can win prizes of $500 ($300 for the 2nd place and $100 for two 3rd places). The second contest, which happens weekly has prizes of up to $150 ($100 for 2nd place, $75 for 3rd place, $50 for 4th place and $25 for 5th place).

Who is OctaFX Suitable For?

OctaFX, having its center of operations in Indonesia, is clearly targeting the Asian market, and South East Asia in particular. As such, traders from that region may enjoy certain advantages such as direct bank debiting, and perhaps being able to communicate better with any company staff.

Other than that, OctaFX is a fairly standard forex broker, with traders likely enjoying their choice of trading platforms and tight spreads. That said, traders who are concerned with broker regulation should probably not trade with OctaFX, which is as we have previously mentioned, very weakly regulated after having lost its FCA license.

Frequent traders might also find the lack of incentives off-putting; for example there is no reduced commission or spread markups for higher volume trading.

Also OctaFX does not offer any VIP accounts, likely because they are targeting the relatively inexperienced retail traders, as can be seen by their contests. Nonetheless, the fact that OctaFX is targeting this target market without offering an unlimited demo account is also a definite negative.

Conclusion

OctaFX provides tight spreads, a good variety of trading platforms as well as various trading tools to assist traders. That being said, their lack of strong regulation is probably their largest drawback, and more than a few traders will likely be put off from trading with them due to this alone.

Of course, if OctaFX manages to get is FCA license back, that will change and bring OctaFX back into the ranks of the highly regulated and trustworthy brokers.