The Forex market is home to many great brokers. With how competitive the space is, picking who to trade with can be overwhelming. If you have decided to get into FX trading in the new 2023, we would like to make the case that you should do so with XM, via the in-depth review below.
The name of the firm might already be familiar to you. It has been offering its services since 2009, which means it will turn 14 this year. With such an impressive amount of experience under its belt, the company has become one of the industry leaders. There are many reasons it stands out, like its tight regulation, its attractive promotions and trading conditions. It offers powerful trading platforms and a sensible payments policy. To date, the firm boasts with over 5 million clients, and we are inclined to believe that. Here is five reasons you should join them this January:
1. XM’s strict regulation and global presence
The most important aspect of a broker to consider before opening an account is the firm’s regulation. XM holds licenses with a number of prestigious regulatory bodies around the globe. We would like to go over the licenses the firm holds, and what kind of protection they entitle the client to, as well as some of the more notable branches of the firm. So here is how this broker is regulated:
Cyprus is one of the major trading hubs of the European Union. The small country’s geographic location determines its huge importance in this regard. That is why it has become home to many leading brokers, who get licenses with its regulatory body – the CySEC.
This is the case with XM as well, which has been holding such a license for years. The firm first became registered with the Cypriot market watchdog in 2010. Since then, the policy of the European Union, and, consequently, of Cyprus, towards regulating its Forex markets has changed significantly. Nowadays, trading FX with an EU-licensed broker means you are entitled to the protections of one of the strictest regulatory frameworks around.
For instance, to get a license at all, a broker needs to come up with €730 000 to prove it has the necessary liquidity to navigate the markets. It also needs to have a resilient internal structure and be led by professionals with certain qualifications. These rules mean such a licensed company rarely has any solvency issues. In the off chance it does, and it goes under, there is a compensatory fund which brokers participate in. Each retail client can be compensated with up to €20 000 in such an event. Even in the case of a margin call, the EU policy has the retail trader compensated. You cannot lose more than what you have deposited – the so-called Negative Balance policy comes into play.
Finally, the CySEC, as well as any EU regulatory body, requires the utmost transparency from FX brokers. They have to report opened and closed trades on a daily basis. This means you can be sure that the firm is playing fair!
Who is this branch of the company for? XM Cyprus mainly services traders from the Member-states of the EU.
Australia has introduced a very strict set of measures towards brokers in 2021. The regulatory body which oversees its markets, called ASIC, has done so to better protect the interests of the trader. Nowadays, the measures the country takes are reminiscent of what the EU requires. In fact, the only differences are the lack of a guarantee fund and the different minimum capital requirement. Aussie brokers need AUD 1 million to get licensed with the ASIC. Here is a chart to visualize these differences:
|Minimum capital requirement:||AUD 1 000 000||€730 000|
|Negative Balance policy:||Yes, for all retail traders||Yes, for all retail traders|
|Reporting trades daily:||Yes, required of all brokers||Yes, required of all brokers|
|Guaranteed funds:||–||Up to €20 000/person in case of bankruptcy|
The policy shift was quite sudden, because the country has historically been resistant to the stricter regulation of the EU. However, it certainly bore fruit – the following year, the ASIC released a report outlining the results achieved by its changes in regulation. Most notable was that the number of margin calls was over 90% lower than the year before, and a similar reduction in client losses was reported.
XM Australia is compliant with these rules and can grant you the mentioned protections, so do not hesitate to trade with the firm if you are reading this from the Tasmanian region. Clients from New Zealand will be trading with this branch of the firm.
Thirdly, it should be noted that there is a strong XM presence in the MENA region. This is due to the Dubai branch of the firm, licensed with the DFSA. What kind of protections does the DFSA afford to the trader compared to the bodies we listed so far? Well, there is the requirement for firms to hold over $500 000 to prove their liquidity. However, a Negative Balance policy or a reporting requirement are not in place as of the time of writing. The DFSA is a sought after regulator that is seeing more and more brokers vie for licenses. XM has beaten them to the punch – it has held a license with the Dubai regulator since 2019. As before, here is a table with a comparison between the policies of the bodies mentioned this far:
|Minimum capital requirement:||AUD 1 000 000||€730 000||$500 000|
|Negative Balance policy:||Yes, for all retail traders||Yes, for all retail traders||–|
|Reporting trades daily:||Yes, required of all brokers||Yes, required of all brokers||–|
|Guaranteed funds:||–||Up to €20 000/person in case of bankruptcy||–|
If you are one of the growing number of traders from the UAE, this is the correct XM branch for you!
XM Belize (XM Global)
Finally, there is a major branch of the firm operating offshore, in Belize. Offshore brokers generally have a well-earned bad reputation. They are often unlicensed and turn out to be insolvent or fraudulent. This is not the case with XM Belize. The broker is backed by the institutional recognition of the XM brand, as well as its many other licenses. It is certainly not any less legitimate, or liquid than the other mentioned XM entities.
Trading with this firm will mean you forfeit the previously mentioned protections. The regulator in Belize, the IFSC only demands firms hold over $500 000 to be issued a license. Yet, the relatively relaxed regulation also has some benefits to offer. For instance, if you are looking to use a bonus, one will not be available in any other XM branch. All of the regulators listed so far have banned the provision of such promotions. There is also a leverage restriction of 1:30 in force for any retail trader – if you wish to use more, you need to meet certain qualifying criteria. Here is what the difference in regulation means you will be trading off for access to these:
|Pros of the lax Belize regulation||Cons|
|Higher leverage||No Negative Balance protection|
|Bonuses are available||No Guarantee funds|
XM Belize operates many of the smaller branches of the company, found in many often overlooked markets. Let’s take a look at one of them:
Are there other branches of XM around the world?
Yes, as a global broker, XM can be found in many countries which are considered to be emerging markets. There is a growing number of retail traders there, and most brokers fail to provide something tailored to them. This one is different, though – it seeks to grant as many people as possible access to its services. Let’s take XM Malaysia for an example. The Malay trader will have access to an exclusive feature of the broker – local wire transfers. These can be used to quickly and cheaply deposit to one’s account with a bank transfer, towards the domestic bank account of the broker.
2. XM’s attractive bonuses
With the strict regulation of the firm in mind examined thoroughly, it is now time to pay a bit more attention to its specific services it offers its clients and what makes it stand out from other brokers. We would first like to go over the bonuses, offered by the firm. Note that, as discussed, they will only be available to clients of XM Belize:
No deposit bonus
Firstly, new clients will have access this promotion once they verify their accounts with the broker. Once that is done, the bonus will become available to you, even before you have deposited a cent with the firm. Note that withdrawing it is not possible, but cashing out the profits made using it can be done at any time!
50% deposit bonus
Secondly, once you deposit with this company, you will have access to a very attractive bonus. If you deposit up to $500, the broker will give you an additional 50% of that as a bonus. And if you are seeking to deposit even more, there is a 20% bonus if you put between $500 and $4500 with the firm, making for a fairly compelling reason to do so with the broker.
Thirdly, the XM loyalty program is a way for the firm to reward clients for picking it over the competition. Here is how it works: Each trade you make is worth a certain number of XM points. By trading more and more, you will rack up these points, and that will entitle you to certain perks. For instance, there can be additional deposit bonuses, made by the broker, available for people with exceptional trading volumes.
XM also offers a referral bonus, which it rewards you with for introducing friends and family to the broker. Each trader is given a referral code they can hand out. If new accounts are registered with it and achieve a certain trading volume, the owner of the code gets a bonus of $35, which can be used to do as they please.
Please note that all of the mentioned bonuses come with their own Terms and Conditions. If you are interested in accepting them, we would recommend getting familiar with the documents which contain the additional rules, available on the XM website.
3. Other XM promotions
Despite the ban on bonuses in three of the four jurisdictions XM is licensed in, the broker has managed to provide its clients from the EU, Middle East and Australia with some promotions. These are non-monetary and do not fit in the definition of bonus, which is prohibited. Of course, clients of XM Belize will have access to them as well. Here is what these two look like:
Free VPS service
As we will discuss in the next section, this broker offers access to the Metatrader 4 and 5 platforms. There is a feature for these platforms, called VPS – a private server you can use to execute your trades in. The advantage of doing so is that you don’t have to worry about any kind of downtime or outages. It is also perfect for EAs. Most leading brokers also offer VPS, but they do so at the price of a monthly subscription. With XM, you can simply request to trade in the VPS environment, provided you have access to a balance of at least $5000 to your account.
Free deposits and withdrawals
Nowadays, most brokers do not charge deposit bonuses. Yet the payment providers do. For instance, if you use the PayPal e-wallet, that can come with additional fees, charged from the third party. These are small costs that add up to your trading, which is annoying and stacks up over time. XM does not want its clients to hassle with those, so it covers the fees on deposits with e-wallets and major credit cards. Even international wire transfer fees are covered by the firm, provided they are for over $200. With these costs sometimes being as high as $30, that is quite the useful promotion! The same applies to withdrawals as well.
4. The excellent XM trading conditions and software
Our coverage of the broker would not be sufficient if we did not, at least briefly, cover the trading conditions it has available. Keep in mind that you can test them out for your own at any time – XM offers demo accounts. Trading on them is done with virtual money, so you expose your capital to no risk if you decide to do so!
What account types are available with XM?
In total, there are five account tiers with the broker, available with its different branches. Two can be opened across all of said branches and the three other are more specific. We would like to cover the more generic tiers first:
These are called the Micro and Standard Account. The two share an entry cost of $5 and allow you to access the entirety of the assets available with XM. The only difference is that the Micro account has a lot size of 1 000 units of base currency. The Standard account has one of 100 000, which is the norm in the industry. Therefore, the former of the two accounts entitles you to lower risk for your trading. Micro accounts are common with most reliable brokers, and $5 is on the low end for them. Usually they cost between $5 and $10. More significant is the pricing of the Standard tier, which usually costs up to $100-200! XM has lowered the bar significantly for its clients – meaning they can have an easier access to the reliable Standard account.
The spreads with both of these accounts are from 1 pip, which is competitive – nowadays, most brokers have access to such amounts for FX majors. The available leverage for retail clients is up to 1:30 for XM Cyprus, Dubai and Australia and 1:1000 for XM Belize. Note that experienced traders in the former three jurisdictions will have access to a higher leverage amount.
Next, we would like to cover the more specific accounts, available for select regions and with certain XM entities. These are the Zero, Ultra Low and Shares accounts.
Starting off with the Zero account, this is available for traders in the EU. The minimum deposit is once again $5, and the difference in the account is the fact that the spreads on it start at 0 pips. Instead of spreads, the firm charges you a commission based on the size of each trade. These commission-based accounts are common in the industry and provide a more predictable pricing model. Costs with them are also easier to calculate. What we said about the availability of leverage applies here as well.
Secondly, there is the Ultra Low account, only available for Australian traders. What makes this account stand out is the lower spread, which starts at 0,6 pips. Additionally, traders are free to select their contract size and can pick whether it is 1 000 units of base currency or 100 000. This account is something of a combination of the features of the Micro and Standard tiers mentioned above. It is very flexible and we can sincerely recommend it to Aussie clients of XM – and the entry price is still $5.
Last, there is the Shares account. This one is available with XM Global and is the most distinctive of the tiers we mentioned so far. Staring off with its minimum deposit requirement – $10 000, you can see the target audience for the tier is different. The Shares account is geared towards the experienced trader who wishes to access this particular asset class.
There is a lot of flexibility when it comes to the accounts with XM, which can be a bit overwhelming. So here is a chart to summarize the availability of accounts and who they are perfect with:
|Account tier:||Available in:||Who should use this account?|
|Micro||All XM branches||Risk-averse traders|
|Standard||All XM branches||Retail FX traders|
|Zero||XM Cyprus||Traders who wish to avoid spreads|
|Ultra low||XM Australia||Any Australian XM trader|
|Shares||XM Belize||Experienced traders|
XM’s powerful trading software
With the account tiers of the broker examined, it is time to take a brief look into its trading software. There are thee platforms it provides access to. Unlike its account tiers, all of them are available across all XM branches. These are Metatrader 4 and its successor, MT5, as well as a proprietary mobile piece of software called the XM app.
Let’s start with the two Metatrader platforms. They are a staple of Forex trading nowadays, and there are a lot of reasons behind their success. Since the launch of Metatrader 4 all the way in 2005, it began dominating the markets. There were many advantages to the software at the time – there was the clean interface it boasted, the plethora of TA tools and the robust community around it. Most unique was the EA system. Using it, traders were able create trading bots – EAs, which could be traded with other MT4 users in the in-platform marketplace. Fast forward to 2023, and you will see that MT4 is still around. It is improved quite substantially from its release, but support for it has been discontinued by the developer.
This developer, called MetaQuotes, has instead now focused on Metatrader 5. With a modern 64 bit architecture and more indicators, chart types and timeframes, MT5 refines on its predecessor. A number of fresh community features are available, like better means to chat in-platform and so on. More importantly, EAs are available here as well. In general, this is the best trading softwareto date and it keeps getting new and exciting updates. For instance, the most recent one took place in December 2022 and improved on the security of the platform with the introduction of two factor authentication.
Thirdly, the platform offered exclusively by this broker is called the XM App. As the name suggests, it is available for mobile devices, both Android and IOS ones. There are many brokers nowadays which have created their own trading software, but we consider the one by XM to stand out from the rest. That is because it can be synched up with the account of a trader on either Metatrader 4 or 5. It can then be used to open and close trades, as well as quickly deposit to the account. This makes for a flexible companion to the desktop versions of both MT4 and MT5.
5. XM’s flexible deposit and withdrawal policy
Lastly, we would like to touch on the deposit and withdrawal policies of the broker. As everything about the company, these are flexible and suitable for the needs of various traders. The firm accepts payments via credit cards and wire transfers. These are commonly used across the world with most brokers. Another popular means of depositing is China Union Pay. Next, XM also accepts e-wallet transfers via Neteller, Skrill and others.
All of these are free from charge, as per the promotion we mentioned above. The withdrawals are also free of charge as well. So you are free to use the one that is most convenient to you, as these payment provides match the needs of various clients differently. For instance, wire transfers are best suited to larger deposits and cards can be used on a day-to-day basis to quickly top up accounts.
While on the topic of depositing with XM, we would like to mention the firm offers several base account currencies. This is a huge advantage, and here is why: Let’s say you are depositing in Australian dollars. If the base account currency is the Euro, you would have to transfer your AUD into EUR with every transaction you make. That costs additional fees and can mean you lose money if the currency you deposit in depreciates with regards to the other one.
With XM you can open an account in AUD and skip all that hassle. But there are more base currencies available. Traders are free to pick between opening their accounts in EUR, USD, AUD, JPY, CHF, HUF, RUB, PLN and GBP. This is another area in which XM provides you with and excellent amount of flexibility.
We have covered all of the most important aspects of a Forex broker. These are its regulation, trading conditions and platforms, deposit and withdrawal policies, as well as promotions. In every step of this review of XM we found the firm to be incredibly competitive and client-oriented. We can sincerely recommend opening an account with it. Doing so will allow you to trade safely and profitably with a company you know you can rely on. But you don’t have to take our word for that – you can head over to the website of XM and open a demo account in minutes. This will allow you to determine whether trading with the broker is for you at zero risk!