Is LiteForex Really a Brokerage We Can Trust?
Since its founding in 2005, LiteForex had accumulated over 500,000 clients across the globe. It has multiple offices in Ghana, Indonesia, India, Iran, Kenya, Myanmar, Nicaragua, Nigeria, the Philippines, Tanzania, and Vietnam. Its main headquarters is in the Marshall Islands. These base of operations are under the entity, LiteForex Investments Ltd. The company caters to traders who reside in Europe through LiteForex(Europe) Ltd.
With the number of clients and the years of tenure under its belt, it is easy to assume that LiteForex had indeed grown to be a brokerage of repute within the trading industry. But of course, the number of clients and years of tenure are not the factors for consideration when choosing a brokerage to do trades through.
As this is the case, this review will go into a detailed discussion of the following:
1. LiteForex’s regulatory status
2. The various instruments that the firm gives its clients access to
3. The trading accounts that are available through LiteForex
4. The trading platforms that are being offered by the firm
5. The commissions, spreads, and leverage available through the firm
To serve the cause, the review team had spent months with LiteForex to conduct exhaustive examinations of all the pertinent facets of the firm’s service.
As already mentioned, LiteForex is based in the Marshall Islands and had been established back in 2005. It is registered within the region and is being regulated not by an actual regulatory board, but by the Marshall Islands Business Corporation Act.
The Marshall islands Business Corporation Act allows for businesses to flourish with minimal restrictions imposed on the companies it regulates. Also called the Marshall Islands Associations Law of 1990, the act stipulates that it is highly acceptable for corporations to have single ownership and not be deducted for taxes.
These primary conditions are well and good for LiteForex as it is able to operate without stumbling into complex judicial processes. What it does not guarantee however is the safety and security of the data and funds of the company’s clients. For what it’s worth, the law is too lenient with Marshall Islands’ non-resident company owners.
To add to this concern, the Marshall Islands is considered an offshore financial destination. It is already common impression within the financial industry that offshore companies are challenging to trust due to the non-transparency of their operations with them not being compelled to disclose anything to a central authority. That being said, trading with LiteForex can actually be seen as a gamble of faith.
Offers and Services
The trading instruments that are open to LiteForex’s clients include the following:
With Commodities, LiteForex clients would be able to trade Gold and Oil 14 hours a day, 5 days a week. Throughout their trading activity, liquidity is consistent
The most popular cryptocurrenies may also be traded through LiteForex which includes crypto forerunner, Bitcoin.
Foreign Exchange Currency
Forex trading is available for 24 hours a day, 5 days a week across all types of currencies.
Global Stock Indices
CFDs on major global indices are up for grabs through the firm. One of the most notable being the US30 Dow Jones.
The assets that the firm offers represent the markets that are greatly valued by traders. It is to the opinion of the review team that these selections are enough to build strong investment portfolios.
Available Trading Accounts
LiteForex offers two live accounts:
1. The Classic Account
The Classic Account had been created for the more seasoned traders. The account is void of interest with respect to surplus funds. In addition, the account does not charge commissions.
2. The ECN Account
While the more experienced traders are catered to by the Standard Account, the Electronic Communications Network (ECN) are recommended to the more professional traders and investors.
The ECN Account offers 2.5% worth of interest rate from surplus funds. Through this account, liquidity providers are in on an unlimited duration of transactions and trades that are directly delivered.
Traders wanting to open a live account with the firm should note that it is not possible to change the account type once it is open. Because of this, should one opt to change accounts he or she must delete the previous account to open another one.
Followers of the Muslim faith can also enlist with LiteForex through the firm’s Islamic Accounts. These, as already made apparent by the nature of the account, follows the stringent tenets of the Sharia Law.
A Demo Account is also available to those who are not comfortable opening an actual live account. This account is furnished with digital funds that LiteForex had furnished. But unlike some brokers, the company does not qualify profits from trade simulations, something that may be considered to be standard practice anyway.
Offered Trading Platforms
LiteForex does not have its own proprietary platform. Instead, it had partnered with MetaQuotes to provide industry favorite, MetaTrader 4 and MetaTrader 5.
The industry lauds both MetaTrader versions in light of efficiency and fast trade executions. It had also received commendations for the tools that these provide.
MT5, on the other hand, while not as desirable as its predecessor makes attractive offers such as an increase in the number available indicators and advanced tools for trading analysis. On top of these, MT5 has a Depth of Market feature, a tool that allows clients to change prices of the orders that had been previously set and move pending orders to the relevant price line.
Commissions, Spreads, and Leverage
LiteForex takes its fee from spreads that are specific to the account that the client holds and the asset he or she is trading.
In light of this, the Classic Account makes use of a spread-based system. The ECN account on the other hand, is commission-based. Through the latter, commissions are charged $5 per lot.
While the spreads that the firm offers may be seen as competitive, the major forex pair spreads can be around 2 pips.
The Leverages available in LiteForex can total up to 1:500.
Trading with LiteForex
Save for the regulatory status, the trading conditions with LiteForex are decent. The trading accounts are sufficient enough for big trades and are effectively demarcated between the types of traders who would be enlisting with the brokerage.
The firm’s decision to enlist only the services of MetaQuotes for trading software is a wise move, given that the MetaTrader platforms are of good repute across all brokerages.
However, it could not be stressed further that LiteForex’s regulatory status leaves a lot to be desired. And it does not help that the firm is based in an offshore region. Should the firm want to increase its trust level among clients, it should think about enlisting itself with a top-tier financial authority.