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UMOFX Review - is it scam or safe?

UMOFX review - Is umofx.com scam or good forex broker?

RATING: 1.9 / 1 REVIEWS ForexBrokerz UMOFX
UMOFX is an offshore broker. Your money is not safe.

RECOMMENDED FOREX BROKERS


UMOFX is a forex and CFD broker, offering four account types on the MetaTrader4 platform. The broker is based in New Zealand. You can find more about its trading conditions and regulatory status in the following review.

 

Account type Min. deposit Max. leverage Spreads
Mini4 Account $1 1:1000 2 pips, fixed
Mini5 Account $1 1:1000 1,5 pips, floating
Standard Account $250 1:400 0,7 pips, floating*
ECN Account $500 1:200 1,5 pips, floating
*commission

 

UMOFX Advantages:

 

Generous leverage

 

With UMOFX you can trade with a leverage of up to 1:1000, which basically is the absolute maximum you can find on the market. And while such leverage can help traders score reasonable profits with a relatively small deposit, it also works as a two edged knife – the higher the leverage, the higher the risk of loosing your funds much faster. Professional trader know that well and rarely trade with a leverage exceeding 1:100. Here we should note that UMOFX offers leverage of up to 1:1000 only with its Mini4 Account and Mini5 Account. For its Standard Account the maximum leverage allowed in 1:400 and for the ECN Account it is caped at 1:200.

 

Acceptable spreads

 

UMOFX has four account types – Mini4, Mini5, Standard and ECN. In its presentation the broker says spreads with the Mini4 Account are fixed at 2 pips for the basis EURUSD pair, while with the Mini5 starting spreads should be floating around 1,5 pips. That sounds acceptable as it is in line with what traders usually expect to see with a standard account. For the two Mini accounts UMOFX takes no commission on the trade as well.

 

For their Standard Account, however, they do take a commission of 7 USD for a standard lot traded, which basically adds 0,7 pips to the spread, when the second currency in the pair is USD. So here we end up with an actual EURUSD spread of 1,4 pips, as UMOFX says the average spread for the account is 0,7 pips.

 

Finally, with the ECN Account the average EURUSD spread is said to be floating around 1,5 pips, which is a bit strange, because with the Standard Account you get better conditions. Here you may check our list of brokers, offering tighter spreads:

 

>> Lowest spread forex brokers<<

 

You can start trading with just 1 USD

 

With UMOFX you can open a  Mini4 Account and a Mini5 Account with just 1 USD and that is good news. In the same time for a Standard Account you will have to invest 250 USD and for an ECN Account – 500 USD. We should note that with some well established players like FBS and IG you can also start trading with less than 5 USD.

 

Various payment methods

 

With UMOFX you can deposit or withdraw funds with all major credit or debit cards like VISA and MasterCard, e-wallets like SkrillNeteller, FasaPay, Perfect Money and CashU, as well as with a bank wire. Still as payment with crypto coins are getting more and more popular, here you may check our list of brokers, where you can pay with Bitcoins:

 

>>Forex Brokers Accepting Bitcoin<<

 

MetaTrader4 supported

 

UMOFX offers the MetaTrader4 and this is also good news. The platform is well known to most traders - it is user friendly, light and intuitive. It has nicely designed charting tools and supports automated trading sessions via specially designed algorithmic, trading bots or Expert Advisors as they are called, which by the way you can easily modify on a proprietary scripting language – the MQL4. You can also modify and even compile your own market indicators. Here you can check our list of brokers, also offering the MetaTrader4:

 

>>Find other MT4 brokers here<<

 

UMOFX Disadvantages:

 

No license

 

UMOFX CO. LIMITED is based in Auckland New Zealand. The broker is not regulated, but says they are working on getting a license.

 

 

We will check their web page again and if they have acquired a license we will surely update our review. Until then however we will have to regard UMOFX  as an unregulated broker and this is unfortunate as regulation is key for the security of any investment. 

 

The Financial Conduct Authority (FCA) in the UK, CySEC in Cyprus and the Australian Securities and Investment Commission (ASIC) are among the most respected financial watchdogs in the sector, as their regulatory regimes are balanced enough to provide both security to investors and flexibility to the brokers.

 

Licensed brokers are obliged to follow strict fiscal and ethical rules, including to maintain a minimum capital adequacy ratio, to keep all clients money in protected, segregated accounts and in some cases even to insure traders capital. 

 

Withr the FCA backed Financial Services Compensation Scheme for example, in case the broker goes under, traders can receive back up to 50 000 GBP of their capital. Similar compensation scheme with the CySEC in the Cyprus guarantees traders up to 20 000 EUR of their investment. Here you may check our list of brokers, also licensed by CySEC:

 

>>Forex brokers in Cyprus<<

 

Relatively few trading instruments

 

In it presentation UMOFX says to be offering some 47 pairs, including currency pairs and CFDs on metals, energy commodities and indices. However, when we tested their trading platform with a Demo account, we counted just 27 forex pairs with no exotic currencies at all. The only other instruments are CFDs on gold and silver. As we found no crypto CFDs as well, here you may check our list of brokers, where you can bet on a Bitcoin CFD:

 

>>Bitcoin Forex Brokers<<

 

Conclusion:

 

UMOFX is a New Zealand based broker, which currently does not hold a license. The broker says they are in the process of acquiring one. Until then however, we will have to regard them as an unregulated entity. As for the trading conditions, they are reasonable – generous leverage, acceptable spreads, no minimum deposit requirement and all that with the MetTrader4 platform. Still, we can not give the broker a higher grade until they get their license.

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Traders` reviews for UMOFX

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Slippage

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Price feed

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Platform

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Deposit/Withdraw

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