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SMFX Review - is it scam or safe?

SMFX review - Is smfx.com scam or good forex broker?

RATING: 2.3 / 1 REVIEWS ForexBrokerz SMFX
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SMFX is a forex and CFD broker registered and regulated in Belize. They offer a fine selection of trading instruments with a choice of three account types, leverage as high as 1:500 and the MetaTrader4 platform. And they even say to be official trading partners of West Ham United.

 

Account type Min. deposit Max. leverage Spreads/ Payout
Standard Account $100

1:500

1,9 pips
VIP Account $1000 1:500 1,3 pips
ECN Account $2000 1:500 0 pips + $7/lot

 

And although their offer looks legit, bear in mind that this is an offshore broker, governed by much less strict regulatory requirements than the ones, imposed on brokers regulated in the European Union, including the UK, the. U.S., Canada or Australia. You may find detailed information about their offer in the following review.

 

SMFX Advantages:

 

Leverage as high as 1:500

 

This is basically as good as it can get. In the past few years higher leverage became a luxury especially since the European Securities and Markets Authority (ESMA) followed the example of the regulatory authorities in the U.S. and Japan and capped the maximum leverage allowed for retail traders at 1:30 with most forex transactions and 1:20 with CFDs. 

 

In fact, currently a leverage cap is discussed even in Australia – the last major regulatory hub, where higher leverage still remains unrestricted. In any case, you should always use higher leverage with extra caution as it is invariably associated with higher risk.

 

Lots of currency pairs and a fine selection of CFDs

 

When we checked the SMFX trading platform with a demo account we came across 48 currency pairs many of which minor or exotic like USDRUB, USDMXN, USDZAR, USDNOK, USDAED, USDHKD, USDTRY, USDSGD, USDSEK, USDPLN, USDINR, USDDKK and USDCNH, as well as CFDs on spot metals like gold, silver, platinum, palladium and copper, oil, natural gas, 14 indices, stocks, futures and even crypto coins including Bitcoin, Bitcoin Cash, Ethereum, Litecoin, Monero, Ripple, Zcahs and Dash. However, if you find the idea of trading the crypto markets attractive, here you may also check our list of brokers trading with Bitcoin CFDs:

 

>>Bitcoin Forex Brokers<<

 

Acceptable minimum deposit requirement 

 

At SMFX you can start trading with 100 USD and this is in lower range of what most traders would usually require as a minimum deposit. Still, bear in mind that with some big and well known brokers like FBS and IG you will be able to open a trading account with just 5 USD or so.

 

MetaTrader4 available

 

This is another piece of good news. This is by far the most widely used trading platform on the market, featuring well over 50 modifiable market indicators and trading robots with the help of which one can easily run automated trading sessions. You can see the platform here:

 

 

On top of that MT4 comes with a fine pack of advanced charting tools so here you may also checkour list of brokers supporting MetaTrader4:

 

>>MT4 Brokers<<

 

Various payment methods

 

SMFX says you can fund your account with major credit and debit cards like VISA and MasterCard, bank wire and some alternative e-payment methods. Besides, here you may also check our list of brokers, accepting Skrill - by far the most popular e-wallet in Europe:

 

>>Brokers accepting Skrill<<

 

SMFX Disadvantages:

 

An offshore license 

 

SMFX is a trading name of Scope Markets Ltd, which also operates another offshore brand – ScopeMarkets. And as we noted the company is based in Belize and is regulated by the local International Financial Services Commission of Belize (IFSC).

 

And while some of the requirements of IFSC are similar to those of the regulatory authorities in Europe and Australia, others are much more relaxed. For example the Financial Conduct Authority (FCA) in the UK, the Cyprus Securities and Exchange Commission (CySEC) and basically all other national regulators in the EU require all supervised brokers to maintain at all times a minimum operational capital of no less than 730 000 EUR, with which to guarantee all outstanding payments to traders.  

 

IFSC on the other hand has a requirement for a  minimum paid up capital in the amount of 500 000 USD, which should be deposited in a local bank. 

 

Also IFSC does not require its brokers to keep their clients' funds in a segregated, protected form creditors trust account, as is the case with all FCA or CySEC brokers. 

 

And finally with a EU regulated broker you will have the additional protection of a client compensation fund, basically covering  between 20 000 EUR and 85 000 GBP (with FCA brokers) of your funds. Here you may check our list of brokers regulated by the FCA in the UK:

 

>>FCA Regulated Forex Brokers<< 

 

Our main issue however is that, requirements put aside, we simply doubt the ability of an offshore regulator like IFSC to properly manage internationally operating brokers like SMFX.

 

High spreads

 

As tested with a demo account the benchmark EURUSD spread floated about 1,9 pips and we consider this higher than what traders would usually expect with a standard account. Bear in mind that with a standard account, the base spreads should not exceed 1,5 pips. Here you may check our list of brokers offering tighter spreads:

 

>> Lowest spread forex brokers<<

 

Conclusion:

 

SMFX is an offshore broker based in Belize. Their main advantages are the generous leverage and the MetaTrader4 platform, combined with the fine selection of trading instruments. On the down side however, their license is not as reliable as the licenses of some well respected financial institutions like the FCA in the UK, CySEC in Cyprus and the Australian Securities and Investments Commission (ASIC). So we simply do not see a reason why you should chose SMFX over a properly regulated EU or Australian broker.

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Traders` reviews for SMFX

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