Pepperstone Review 2018

By Alan Farley  | January 26, 2018

A Melbourne-based broker-dealer providing forex, index CFDs, commodities, metals, and cryptocurrency trade execution to customers in Australia and the United Kingdom.

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Overall Rating

4.0/
5.0
Products & Fees
3.4
Trust
3.9
Special Features
4.0
Desktop Experience
4.5
Mobile Experience
3.8
Customer Support
4.4
Research & Insights
4.3
Education
4.0

Pepperstone Fast Facts

Pepperstone offers competitive, full-featured trade execution through multiple platforms, including MetaTrader 4, browser-based entry, and mobile devices. Customers can choose among 80 tradable instruments in 72+ asset classes across the globe through a diverse range of account types that include commission-free execution and active trader benefits. An AUD $200 minimum deposit supports small trading accounts; extensive research and educational resources build users' skill levels and profit-opportunity recognition.

Segregated customer funds provide an additional layer of security, and multiple liquidity venues and the absence of a dealing desk generate a more level playing field for smaller accounts. Support options are diverse and well-documented, with 24-hour chat/phone support and clearly stated policies on deposits, withdrawals, and trade disputes. The company's two websites are well-organized and easy to navigate, allowing clients to find answers to most inquiries with a few clicks.

pros

  • Tight Spreads/Low Cost
    EUR/USD and index CFD executions offer industry-leading rates
  • Diverse Trading Platforms
    MetaTrader 4, cTrader, WebTrader, and mobile access
  • Deep Liquidity
    Multiple liquidity venues with no dealing desk to trade against clients

cons

  • Poorly Documented Volume Discounts
    Unclear which volume tiers will reduce execution costs
  • No Single Stock CFDs
    Index CFDs only
  • Commodity Trade Pricing
    Less competitive than other asset classes
2010
Founded
$5.8 Billion
Average Daily Trade Volume
72+
Asset Classes

Products & Fees

3.4

Pepperstone offers "Standard" (no commission) and "Razor" (commission) accounts. Standard accounts carry higher spreads than Razor accounts, forcing customers to consider which option will incur lower overall costs. Documentation on CFD, commodities, and futures commissions/costs are lacking, making it difficult to compute final execution costs.

  • Forex (Standard)
    1.0 pip spread minimum
  • Forex (Razor)
    0.0 to 0.8 avg. pip spread
  • CFDs (Index)
    0.4 to 0.6 spread**
  • Futures (Standard)
    0.3 (USDX) to 16.76 (Cotton) spread
  • Futures (Razor)
    Spread + $3.76 (USD) per lot
  • Commodities (Standard)
    0.5 (Crude in USD) to 1.56 (Silver in EUR)
  • Commodities (Razor)
    Spread + $3.76 per lot (USD)

Trust

3.9

Pepperstone is registered in Australia under ACN 147 055 703 and licensed through the Australian Securities and Investments Commission under AFSL 414530. Licensees must meet strict capital requirements and comply with internal procedures, including risk management, staff training, accounting, and audits.

GBP 50,000
Default Insurance (If Pepperstone defaults)
(Any shortfall of funds of up to GBP 50,000 may be compensated for under the Financial Services Compensation Scheme (FSCS)).
GBP 85,000
Default Insurance (Failed Bank)
If the custodian bank holding client funds goes into liquidation, any shortfall of funds of up to GBP 85,000 may be compensated for under the Financial Services Compensation Scheme (FSCS).

What you need to know

Pepperstone-customer funds are held in segregated accounts. They are registered in England and Wales under Company Number 08965105 and regulated by the U.K.'s Financial Conduct Authority (FCA) under FRN 684312. Australia has no direct security-insurance requirements but requires broker-dealers to meet strict capital-requirement and risk-management controls while following a set of auditable procedures.

Special Features

4.0
Special Features

Pepperstone has engaged NASDAQ-listed firm Equinix to provide a state-of-the-art forex-trading infrastructure located in the New York City metropolitan area. Equinix Financial eXchange offers access to a network of execution venues, including banking and hedge fund servers. The partnership also supports fee-based VPS options, including VPS hosting.

Equinix Financial eXchange
Low Latency and Deep Liquidity
The FX Lounge
Improve Your Trading
(For more trading guides, a new education website dedicated to helping improve your trading)
Social Trading
Follow and Copy Trades
(Pepperstone works with ZuluTrade, MetaTrader 4, Myfxbook, Mirror Trader, and RoboX

What you need to know

The broker offers a broad selection of special features, including low-latency infrastructure, an expert-driven educational website, tutorial library, and historical tick data. The FX Lounge website features numerous educational and research topics led by heavyweights Kathy Lien and Boris Schlossberg. Customers can choose from a wide variety of PC and mobile trading platforms, including industry-standard MetaTrader. A specialized Islamic account features compliance with Sharia law.

Desktop Experience

4.5
Desktop Experience

Pepperstone offers MetaTrader 4 and 5, along with a web-based trading platform and cTrader, which features extensive back-testing functionality and algorithmic trading support.

Pros

Industry-standard MetaTrader supports customizable watchlists, advanced order entry, alerts, research, and news in a high-contrast desktop platform that allows trades to be placed directly on charts. Pepperstone also provides Smart Trader Tools for MT4, a set of add-ons that extend functionality through visual and sentiment analysis, complex alerts, and market calendars. MT's strategy-testing subprogram is powerful, allowing for accelerated trade planning and skills development.

Cons

Chart customization is poorly organized and lacks contextual functionality, forcing users to menu-hunt to locate needed features. Predefined time frames limit analysis, and chart windows can't be detached for placement outside the platforms. Users can't adjust or replace drawing tools (trendlines, Fibonacci retracements, and more) by default once they're applied. Object anchors can be difficult to see and manipulate, even on large screens. The lack of font control/adjustment for charts or text windows limits accessibility for visually impaired and older customers.

Mobile Experience

3.8
Mobile Experience

Full-featured mobile apps are available for iOS, Android, and tablets. Apps come in two formats, one for industry-standard MetaTrader and a second for cTrader, Pepperstone's new high-end trading platform.

Pros

The easy-to-read quotes screen and contextual menu support one- or two-click trade execution. The quotes screen also has both simple and advanced modes, which adds flexibility. A tick chart integrated with the trade-execution screen improves the visual experience in fast-moving markets. Deviation bands can be placed on both bid and ask sides to improve risk management and slippage control. Surprisingly robust charting includes a wide variety of indicators, settings, and views. The performance screen offers easy access to balance, margin, and equity in real time.

Cons

Pepperstone's mobile apps lack customized watchlists, and users can't set alerts. The news screen doesn't support advanced filtering or organization, and ticker-specific news can't be accessed from the quotes screen. The history screen doesn't display open positions, and the trade screen lacks sophisticated order types, including trailing stops. Settings don't support basic security features, including automatic timeout or secondary token, although one-time passwords can be used. Plus, there's no way to access account history through the mobile application.

Customer Support

4.4

The diverse knowledge base and support resources can address most inquiries and trade issues. Live support through chat and phone as well as in person exceed industry benchmarks. Comprehensive FAQs cover major account issues.

What you need to know

Pepperstone offers diverse 24-hour contact and support options, including in-person support at local offices. An international number is provided for U.K. customers. Twenty-four-hour live chat is available to both active and prospective customers, with knowledgeable representatives providing useful answers to inquiries. Account requirements, obligations, and procedures are complete and well-organized, avoiding legalese and other common broker smokescreens.

Research & Insights

4.3

The majority of forex research and insight is provided through the Pepperstone YouTube channel and the The FX Lounge website, with an extensive library of research, market reports, and educational tutorials by forex industry heavyweights Kathy Lien and Boris Schlossberg.

The FX Lounge
Website dedicated to market research and analysis
Pepperstone YouTube Channel
Daily market updates and software tutorials
Autochartist Plug-in
Pattern-recognition software
Daily Market Reports
Execute trades directly from e-mail
Market Review
Daily analysis on major markets
Webinars
Regular research and educational presentations

Pros

Pepperstone delivers an overwhelming variety of daily analysis resources, presented by industry professionals. Topics are evenly divided between analysis of market-moving events and in-depth market reviews, with a sharp focus on highlighted currency pairs. Information is current, easy to digest, and constantly updated, with an eye to exposing the most profitable short-term trading opportunities.

Cons

Research offerings lack material on indices, futures, metals, and commodities, even though Pepperstone features those market venues. MetaTrader lacks basic research tools, forcing traders to exit the program and utilize web-based sources. The FX Lounge and YouTube presentations overlap on some topics, making systematic information-building more difficult. Research venues lack sophisticated search functions, often pulling up superfluous results.

Education

4.0

An extensive Trading Guides library on the main website supplements time-specific offerings available on the FX Lounge website and YouTube channel. Educational topics range from basic to advanced, allowing customers to develop comprehensive skill sets.

"The FX Lounge"
Dedicated Technical Analysis Section
Trading Guides
Beginner to Advanced Tutorials
"Learn to Trade Forex"
Introduction to Currency Pairs

What you need to know

A "Learn to Trade Forex" section adds to an already impressive suite of educational materials. The Trading Guides cover a wide variety of subject matter, featuring technical and fundamental analysis as well as sentiment and expert advice. Introductions to algorithmic and scalping strategies provide a foundation for traders to pursue additional research. On the downside, overall themes are marred by a myopic focus on forex markets, often ignoring indices, futures, metals, and commodities, even though many customers trade those venues.

Bottom Line

Pepperstone has constructed an impressive and functional broker-dealer operation, with industry-standard MetaTrader and a variety of alternative trading platforms. Competitive pricing, account diversity, and state-of-the-art technology support fast and accurate execution, and two well-organized websites provide customers with a treasure trove of educational and research offerings. Legal obligations are clearly stated, avoiding conflicts while supporting a team approach underpinned by the absence of a dealing desk that trades against clients.

The impressive buildout could outgrow MetaTrader functionality in coming years, requiring a switch to a platform that more closely matches ambitious company objectives. Broadening its educational and research offerings would benefit customers interested in indices, futures, metals, and commodities trading. In addition, active-trader volume discounts should be clearly stated in the fee structure rather than requiring customers to inquire by phone. Despite these shortcomings, the company sets a high standard that shines a less favorable light on its forex and CFD competitors.

Alan Farley
Reviewed by Alan Farley

Alan Farley is a private trader and author of the McGraw-Hill best-sellers "The Master Swing Trader" and "The Master Swing Trader Toolkit",  He's been on the market scene for well over two decades as a trader, advisor, and author.

 

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