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GDAX

GDAX Review
Trader's rating 1
Editor's rating 4

Trading Accounts

 

Account type Minimum deposit Leverage Maker Fee Taker Fee
Standard Undisclosed 1:3 0% Up to 0.25%

 

GDAX, which stands for Global Digital Asset Exchange, is a company owned by Coinbase. While some of you may know Coinbase for the ability to purchase Bitcoin directly by Credit Card, GDAX is the other part of the company – the exchange aimed at traders. Trading fees at GDAX are much lower and margin trading is available.

 

The company, security of funds

 

Company Country Regulation
Coinbase USA NY BitLicense

 

As mentioned above GDAX is actually a part of San Francisco – based Coinbase. The company holds the New York BitLicnese, which is by its nature an interesting piece of legislation. The New York Department of Financial Services (NYDFS) attempted to make the city a major Bitcoin trading center, the same way it hosts the world’s largest stock exchange. One may argue the idea backfired, as a lot of the key players backed-out of the 2015 proposal. This is due to the burdensome and slow regulatory procedure. As of the summer of 2017 only three companies have received the license and Coinbase is one of them.

 

When it comes to hacking, a major attack has not struck GDAX or Coinbase. That being the case, there was a “flash crash” in Ethereum prices, which raises suspicion. The coin was trading at around $317, when it suddenly spiked to an alleged value of 10 cents and quickly retraced. The company proceeded to halt trading and later claimed this was merely a “fat finger” - single large trader accidentally placed a market sell order, which triggered a chain of stop-loss orders to be executed. Here is а live video, shot by a trader, who has connected a MetaTrader4 platform to his GDAX account (the interesting thing happens around 2:50):

 

 

The public’s concerns, of course, come from the fact GDAX offers margin trading. The company could have manipulated the price, in order to wipe-out traders who were long. All of this is purely speculation.

 

 

Other than this case, the user reviews for GDAX generally match the ones for Coinbase. One of the major concerns of the fans of decentralization in the cryptoverse, is the fact a lot of the investors behind the project are well-established in the traditional financial sector.

 

Trading conditions

 

Trading instruments (cryptocurrencies)

Only three crypto currencies are available at GDAX, namelyBitcoin, Ethereum and Litecoin. Trading is done against USD and EUR, with BTC/GBP also being available, alongside the crypto-crosses ETH/BTC and LTC/BTC.

 

Minimum initial deposit

There is no information on the minimum initial deposit at GDAX, which is not that unusual in the crypto currency sphere. On the other hand, most forex brokers have such a level and disclose it on their websites. For instance the FCA-regulated industry pioneers at IG (who also offer some coins as CFDs) proudly announce they do not have a minimum – you can open an account for as low as you want.

 

Leverage

Margin trading is available on GDAX, with a maximum leverage ratio of 1:3. While this may sound like nothing in comparison to the 1:500, which a lot of forex brokers offer, keep in mind such high levels only apply for fiat currencies, which rarely have price movements bigger than 1-2% per day. 

 

When it comes to crypto, the aforementioned broker IG offers 1:13 in leverage (a 7.5% margin requirement). For a full comparison between crypto-exchanges and forex brokers, who offer Bitcoin trading, read this article.

 

Fees

The costs of trading at GDAX are a lot lower than the ones available at Coinbase. When trading on the exchange, market “makers” (the people who place passive orders and wait for other traders to trigger them) do not pay a fee. Market “takers” (i.e. the “aggressive” traders who directly buy/sell with a market order) pay fees starting from 0.25% and going down for the bigger traders. Both of these levels (especially the free of charge passive trading) are very competitive.

 

Trading platform

 

The platform provided by GDAX, which is web-based, is a lot better than the one offered at Coinbase. That being said, we find the charting lacking when compared to the charts provided by TradigView (which other exchanges have integrated, as well as MetaTrader4, of course. Only a couple of predetermined moving averages are available, in terms of technical indicators. Here is a preview (click to zoom-in):

 

 

The order book is located at the left and the more bizarre design decision to place the “ask” column on top of the “bids” is made. While this may seem strange to experienced traders it does provide a nice graphical representation for beginners. The tape is located to the left, with the middle ground being taken by the chart (which is nothing special) and the open positions tab. 

 

Methods of payment

 

While Coinbase is obviously the main source of clients (and funds) for GDAX, money can also be sent directly to the exchange. This is a massive convenience tool, as accounts can be funded, without the need of paying the hefty Coinbase fees. That being said, Credit/Debit Card deposits can only be made via Coinbase, while GDAX accepts Bank transfers.

 

Conclusion

 

GDAX is a part of Coinbase and more specifically the part of the company, which is targeting more active traders. The fee structure is very competitive, especially with the free market “maker” trades. The selection of trading assets is not great, but the trading platform feels relatively nice (although charting is nothing special). Here is a summary of GDAX: 

 

Pros Cons
New York BitLicense Few altcoins available
Competitive trading fees Suspicion regarding the ETH spike
No major hacks yet  
Accepts Bank Transfers  
Relatively nice trading platform  

 

XM

XM Review
Trader's rating 3.4
Editor's rating 4.7

Trading Accounts

 

Account type  Minimum deposit  Minimum trade size  Maximum leverage  Average Spreads
Micro  $5  0.01 1:500 1.7 pip on EUR/USD
Standard  $5 0.01 1:500 1.7 pip on EUR/USD
Zero  $100 0.01 1:500 0.1 pips on EUR/USD + $7 / lot (round trip) 

 

XM offers its clients three types to choose from: Micro, Standard and Zero. You may choose from commission-free trading (in Micro and Standard accounts) or tighter spreads, involving commission fees and higher initial deposit (Zero account). The broker offers high leverage levels and floating spreads. Beginners can sign up for Micro accounts with as little as $5, and micro lots are available for trade on all accounts.


What is more, swap-free (Islamic) accounts are available, designated for clients who are not willing to earn interest for religious reasons.


The Company. Security of Funds

 

Company Country Regulation
Trading Point of Financial Instruments Ltd. Cyprus  CySEC
Trading Point of Financial Instruments PTY Ltd. Australia ASIC
     

Based on the sunny island of Cyprus, XM offers great trading conditions for trading in a wide range of instruments, including currency trading, CFDs on commodities, indices, precious metals, energies and stocks on two trading platforms (MT4 and MT5). What is more, XM provides ultra-fast execution (99.35% of all trades executed in less than 1 second), as well as awesome bonuses & promotions.

 

XM is a brand name of Trading Point Holdings Ltd, which wholly owns Trading Point of Financial Instruments Pty Ltd (XM Australia) and Trading Point of Financial Instruments Ltd (XM Cyprus).

  

CySEC and ASIC apply certain rules and requirements to regulated firms, which are not as stringent as those in the US, for instance, however they provide a good level of credibility. Besides, licensed brokers are required to keep customer funds in segregated accounts, separated from the company’s operating funds.

 

As a further guarantee to clients’ funds, all companies regulated in Cyprus are covered by compensation schemes as additional guarantee to clients funds. All deposits with a Cyprus regulated forex broker up to EUR 20,000 per client are guaranteed by the  Investor Compensation Fund.

 

Currently, however, Australian forex brokers are not covered by any compensation scheme.

 

The XM group also includes Belize-registered XM Global, as well as Trading Point of Financial Instruments UK Ltd (XM UK), a company authorized by the Financial Conduct Austhority in the UK. It currently operates Trading.com brand. The latter is also expected to launch in the US, as XM has also applied for authorization with the National Futures Association (NFA). 

 

 

Trading Conditions


Minimum Initial Deposit

In order to open an account with XM, traders have to invest just $5. Such low minimum initial amount is rather attractive, as typically brokers require $100 - $300 as a start.


Spreads & Commissions

This broker offers variable spreads. The typical ones on commission-free accounts amount to 1.7 pips on EUR/USD. According to us, the conditions on the Zero account are better: spreads averaged 0.1 pips on EUR/USD and commission $3.5 per standard lot traded (per side). So, basically trading costs on the Zero account amount to around 0.8 pips, commission included, which is a great offer. What is more, you can open a Zero account with just $100.


Leverage
XM offers flexible leverage between 1:1 to 1:500. Using leverage means that you can trade positions larger than the amount of money in your trading account. Leverage amount is expressed as a ratio, for instance 50:1, 100:1, or 500:1. Assuming that you have $1,000 in your trading account and you trade ticket sizes of 500,000 USD/JPY, your leverage will equate 500:1.


Trading Platforms

 

When trading with this broker, you will be offered both MetaQuuotes;s platforms - the Metatrader 4 (MT4) and MetaTrader 5 (MT5).

 

MT4 is an internationally acclaimed trading software, offering a full array of trading tools and features: more than 50 built-in technical indicators, advanced charting package, a wide range of Expert Advisors (EAs) and extensive back-testing options for them. Traders can download ready-made or create their own EAs and let the program do all the work, no human emotions involved. The MT4 with XM is availavle in all forms and shapes: desktop, web, and mobile.

What is more, XM provides MT4 MultiTerminal, which offers a practical and convenient way to manage multiple accounts simultaneously from a single interface (PAMM).

 

Recently MetaQuotes has been putting a stronger emphasis on the MT5: the hedging function was finally added to it and all versions of the platform have been ehanced. As a result, the number of brokers that support the platform has been on the increase. XM also followed suit and added it to its offerings. 


Besides, free Virtual Private Server (VPS) hosting is offered to both new and existing customers of XM who deposit a minimum of $5,000 and trade at least 5 round turn lots per month. VPS hosting allows the execution of orders 24 hours, 5 days a week.


Promotions

 - Free VPS for clients who maintain a balance (Equity-Credit) USD 5,000 or currency equivalent. No end date for this promotion;

 - $30 Non-Deposit Trading Bonus for new clients only. No end date for this promotion;

 - The two-tier deposit bonus offers 50% deposit bonus up to $500 and 20% deposit bonus up to $5,000. No end date for this promotion;

 - The XM Loyalty Program offers the clients XM Points (XMP) per lot traded. These XMP can be redeemed at any time for credit bonus which can be used for trading purposes only. No end date for this promotion.

 

*Clients registered under Trading Point of Financial Instruments Ltd are not eligible for bonuses. 

 


Deposit/Withdraw Methods


XM accepts the most commonly used Local Payment methods today including Credit/Debit Card, Neteller, Skrill, Bank Wire Transfer, etc. Their coverage is quite extensive and adds more flexibility on adding funds into the account


XM covers all deposit and withdrawal transfer fees for payments made via Neteller, Moneybookers and all major credit cards (including VISA, VISA Electron, MasterCard, Maestro and China UnionPay). Additionally, all deposits and withdrawals above 200 USD processed by wire transfer are also included in our zero fees policy.


Conclusion


XM is a EU award-winning broker that offers wide range of trading products and account types on two great platforms under competitive conditions. What is more, it provides Negative Balance Protection, as well as lucrative bonuses to its clients. To sum up the above, here are the advantages and drawbacks with regards to this broker:

 

Pros  Cons
Well-regulated (ASIC and CySEC licenses) No significant disadvantages
Negative Balance Protection  
Low trading costs on the Zero account  
MT4 and MT5 available  
Attractive Promotions  
Fast execution speed  

 

Why XM?

- Licensed in UK and Australia
- Tight Spreads from 1 Pip
- Leverage up to 888:1
- Deposit bonus up to 5000 USD
- 24 Hour Support
- No Requotes
- Personal Account Managers
- Automated Trading
- Loyalty Program
- Phone Trading
- Hedging Allowed
- Islamic Account

Registered with

- FSA, UK 
- BaFin, Germany 
- CNMV, Spain
- AFM, Netherlands
- FI, Sweden
- FIN, Finland
- PSZÁF, Hungary
- CONSOB, Italy
- ACP, France
- KNF, Poland

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