LiteForex Review

LiteForex.eu briefly

The liteforex.eu website is owned by Liteforex (Europe) Limited, which is regulated by the Cyprus Securities and Exchange Commission (CySEC). Liteforex (Europe) Limited has been in the forex industry since 2008 and has since regularly introduced new services, developed its global office network, and increased customer potential, the company said. It has been awarded several times; the company claims. Clients can trade currency pairs, commodities, and indices, through the popular terminals MetaTrader 4 (MT4) and MetaTrader 5 (MT5), investing a minimum of USD50.

Regulation

There are two versions of the website with domains .com and .eu. The liteforex.com website is owned by LiteForex Investments Limited, which is registered in the Marshall Islands under register number 63888 and is regulated in accordance with Marshall Islands Business Corporation Act. The liteforex.eu website is owned by LiteForex (Europe) Limited, which is registered as a Cyprus Investment Firm (CIF) and is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) under license number 093/08. These licenses allow the company to conduct financial services such as reception and transmission of orders and execution of orders on behalf of clients. LiteForex is a member of the Investor Compensation Fund (ICF) and all of the client funds are insured (up to EUR20,000). EU-regulated brokerage firms are usually preferred because of their strict supervision but be careful which company you deal with.

Account Types

There are two types of live accounts, which differ mainly in spreads and commissions.

Classic account – The minimum required deposit is USD50 and the average spread for the EUR/USD pair is about 2 pips. Trading is commission free. The company informs that this account is created for experienced traders who have extensive experience in trade and proven strategies.

ECN account – The minimum deposit amount is USD50 and spreads are close to zero. There is a commission that depends on the traded instruments and is USD10 for the major currency pairs, USD20 for the crosses, USD30 for the minor currency pairs, USD20 for Gold and Silver, USD5 for Oil and Brent and USD5 for trading indices. All values are per lot traded. The company explains that the ECN account is also intended for experienced traders. This account offers deep liquidity and tight spreads. Scalping and news trading are allowed.

What Type of Brokerage the Company is?

The Best Execution Policy file in the legal section shows that when executing client orders, the company acts as a principal and not as an agent on the client’s behalf. This means that LiteForex is a market maker and counterparty to all client orders. When a company is a market maker it may keep the risk for itself without transmitting client orders for hedging. Here is the main conflict of interest – every loss for customers is a profit for the company. However, as a brokerage firm regulated by CySEC, it must adhere to strict rules, and if you think something is wrong, you can complain at any time.

The same document reveals that slippage may occur when trading financial instruments. This is the situation when at the time that an order is presented for execution, the specific price shown to the client may not be available; therefore the order will be executed close to or a number of pips away from the client’s requested price. The company informs that slippage is a normal phenomenon when trading financial instruments and happens often during periods of low liquidity and high volatility. In other words, your order may not be executed at the declared price. Slippage can occur with all types of orders, so the company does not guarantee execution of stop loss orders at the specified price. Stop loss orders are non-guaranteed and will be filled at the next available market price.

The General Business Terms file shows that all retail clients are covered by Negative Balance Protection. In the event of negative balance in a client account, the company applies the negative balance protection and recovers the loss of the client to a zero balance, meaning that the client does not have any debts to the company.

Fees

In addition to usual fees there also is an inactivity fee. If the client account is inactive for 180 consecutive days or more (no trades executed and no open positions), the company will charge a maintenance fee and a reactivation fee, the amount of which is not specified.

Deposits and Withdrawals

Customers can use several deposit methods such as wire transfer, credit/debit cards, Skrill and Neteller. LiteForex covers deposit commission for all payment methods, the company claims.

Withdrawal of the funds can be carried out only in the same way and in the same currency, which has been used for topping up. It means that if you fund your account, using Skrill, you can withdraw money only using only the same Skrill wallet. If you wish to use a different payment system, the withdrawal will be possible only if you make a deposit with the new wallet and you will be able to withdraw the money to both wallets proportionally.

Deposits and withdrawals are processed within one business day in the order of their arrival. If you use a bank transfer, the processing of your transaction may take up to 5 business days, depending on the speed of the sender’s and beneficiary’s banks.

Trading Platforms

The company says you can trade via two of the most advanced and popular platforms currently – MetaTrader 4 (MT4) and MetaTrader 5 (MT5). However, the account description shows that only MT4 is available for trading. MetaTrader 4 is the industry standard in currency trading. It is fast, convenient, and stable. MetaTrader 4 is the innovator of offering expert advisors (EAs), which are automated trading systems that are developed using the MetaQuotes language. You can use the installation version for Windows PC and Mac and the mobile version for iOS or Android devices.

Assets

Forex – You have access to 57 major, minor, and exotic currency pairs. The average spread for the EUR/USD pair depends on the account type and is around 2 pips for the Classic account and close to zero for the ECN account.

Indices – You can trade 10 of the major indices globally, such as DAX30, DJIA and ASX200. The average spread for the DAX30 is 5.6 points for the Classic account and 0.6 points for the ECN account (USD5 commission per traded lot).

Commodities – 4 precious metals and 2 energy products are available for trading, including Gold, Silver, Crude Oil, Brent Oil. The average spread for the Gold is USD6.88/1.94 and the one for the Crude Oil is USD0.90/0.03 depending on the account.

Social Trading

There is a section dedicated for investors. Here you can discover the social world of trading by copy trades. The automated copy-trading system will allow you to duplicate the best trades, trade independently, share information and communicate with your traders. There is a rank of investors (top 3) and all and you can view their trading activity and choose who to follow.

Summary

LiteForex has a CySEC regulation, which allows it to provide financial services across European Union. It acts as a market maker and the main conflict of interest exists. The company provides not so wide range of trading instruments via the popular MT4 (MT5) platform(s). There are two types of live accounts that differ mainly in the spreads and commissions. The ECN account provides close to zero spreads at the expense of a commission that depends on the traded instrument. There is another branch of the company LiteForex, registered on Marshall Island and you have to be careful who you deal with.