MEX Exchange Review

MexExchange.com briefly

This website mexexchange.com is owned by MEX Australia Pty Ltd, which is authorized and regulated by the Australian Securities and Investments Commission (ASIC). The company was founded in Sydney, Australia in 2012 and currently it serves retail clients, introducing brokers and institutions offering an advanced trading platform and decent trading conditions. MEX Exchange claims it offers one of the narrowest spreads in the industry by building relationships with leading liquidity providers. The company offers a wide set of trading instruments including currency pairs, metals, and stocks through the popular terminal MetaTrader 4 (MT4). Among the company’s liquidity providers are BNP Paribas, Citi, Commerzbank, Deutsche Bank, JPMorgan, etc.

Regulation

MEX Exchange is the trading name of MEX (Australia) Pty Ltd, which is authorized and regulated by the Australian Securities and Investments Commission (ASIC) under license number 416279, which authorizes MEX Exchange to offer Margin FX and CFD products for online trading. The company adheres to strict measures and controls regarding the client’s money. It also implements strict Anti-Money Laundering (AML) and Counter-Terrorism Funding (CTF) measures.

Account Types

There are two main types of accounts that traders open with MEX Exchange:

Real Account – there are two types of real accounts available and both do not require a minimum deposit to open:

Classic Account – MEX Exchange MetaTrader 4 standard account provides clients with tight spreads and the trading is commission free.

ECN Account – This account provides true ECN connectivity through the MetaTrader 4 platform, which receives quotes directly from the company’s electronic communications network (ECN) connection. As a result, the spread for the EUR/USD pair starts from 0.0 pips and its average value is 0.2 pips. However, the raw spreads are at the expense of the commission of USD7.

Demo Account – all clients with live and funded accounts are entitled to a non-expiring demo account, where you can try your strategies before implementing them into the real account.

What Type of Broker the Company Is

We have found in the Product Disclosure Statement file that MEX Exchange clearly announces: ‘We are a market maker, not a broker, and we generally make our money from the spreads that are embedded in the price of the instrument’. It is also written that under the market maker model, each margin contract and CFD transaction creates a direct financial exposure for the provider, which may or may not be hedged in the underlying instrument or with a counterparty using OTC derivatives. It is the counterparty to every contract. Market makers make money from the client losses as well, and they are interested in such situations to happen. However, the company is well regulated by the ASIC and such a situation is unlikely to occur, but the conflict of interest exists.

The same document reveals that trading in Margin FX and CFD involve the risk of losing substantially more than your initial investment. In such cases, it will be necessary for you to deposit additional funds with MEX Exchange. This means that there is no negative balance protection and if your account balance is negative, you will owe money to this company.

There is also a warning that stop loss orders are not guaranteed and the execution of such orders will depend on market volatility and liquidity. The stop-loss order could be activated by a short-term fluctuation in the markets, or in a fast-moving market, the price at which the trade is executed could be much different from the stop-order price.

Market orders are subject to slippage and its deviation can be configured into the platform settings. If you want your orders to be executed without slippage, you must set the deviation value below 1 pip (or zero). In this case your order may be rejected if there is a difference between the current and the requested price.

Fees

On all CFDs on indices and commodities, clients will be charged a commission of USD10 per standard lot.

Where clients make deposits or withdrawals in foreign currencies through third-party payment processors, a fee of up to 8% of the relevant funds will be payable.

If an account has not been active (no new transactions have been placed) for 3 consecutive months, MEX Exchange will charge a monthly fee of USD60 per calendar month.

The company reserves the right to charge some additional fees in some circumstances:

Deposits and Withdrawals

Clients can use several deposits methods such as bank transfers, credit/debit cards, Skrill and Neteller. MEX Exchange does not charge any internal fees for deposits or withdrawals. However, payments to and from international banking institutions may involve intermediary transfer fees and/or conversion fees from either party which are independent of MEX Exchange.

Trading Platforms

Customers can trade through one of the most used terminals – MetaTrader 4 (MT4). It is available both as a desktop (for Windows and MAC) and web-based versions, as well as a mobile application. MT4 platform offers trading in Forex, Metals and CFDs utilizing the ECN technology, in which MEX Exchange has invested solidly. This technology allows the company to perform with great stability and reliability. Prices are derived by multiple liquidity providers, which allows a sub-second order fulfillment. One-click trading and plenty of expert advisors are also available.

MT4 can also be used as a Multi Account Manager (MAM) and a Percent Allocation Management Module (PAMM), which is a good solution to manage and trade multiple MT4 accounts simultaneously.

Assets

Forex – Over 35 currency pairs available including popular major, minor, and exotic ones. Although the company claims the spread for the EUR/USD pair is below 1 pip, when we tried our demo account it was above 2 pips. The leverage can be up to 1:500.

Indices – You can trade most popular indices globally, such as DJIA, US500, ASX200 etc. The leverage is 1:100 and they are daily contracts, which means the rollover will be applied daily.

Precious Metals – All major traded precious metals are available such as Gold, Silver, Platinum, Copper, etc. The average spread for gold is USD0.50. The leverage can be up to 1:250.

Commodities – You can trade spot Brent Oil and WTI crude Oil. The leverage is 1:100.

Data Centre

MEX Exchange uses the newest Equinix data centers in NY4, New York’ and LD4 in London along with oneZero connectivity, which allows it to choose from leading liquidity providers to create customized liquidity pools that meet their trader’s unique needs, the company claims.

Education

There is a dedicated educational section on the web page called Trading Tools. You can find explanations of the Forex market and the factors that influence exchange rates, but they are available upon request only. You can find a third-party economic calendar and daily market analysis. MetaTrader 4 video tutorials can also be found in this section.

Partnership

The Partnerships section provides the necessary information for Introducing Brokers. White Label partnership is offered as a solution for institutions wishing to offer forex and other trading products to their clients.

Summary

MEX Exchange is the ASIC regulated market maker, which provides the latest trading technology through the popular MT4 trading terminal. However, there are only a few instruments available for online trading.  There is no minimum deposit requirement and you can start trading with as much as you want. Deposits can be made by bank transfer, credit card, Skrill and Neteller. There are no internal fees on deposits and withdrawals, but the other banks and providers may charge you.