Founded in 2004, Geneva-based Dukascopy Bank now offers a full range of banking services in an addition to a large brokerage operation focused primarily on contracts for difference (CFDs). They also own and operate the unique Swiss FX Marketplace (SWFX) ECN. Separate divisions in Geneva, Switzerland and Riga, Latvia provide services for Switzerland (which is not an EU member) and the rest of Europe.
The broker does an excellent job disclosing its higher-than-average trading costs and fees in a relatively small product catalog. A generous active trader’s discount program offers an upgrade path to lower commissions and spreads, while a home-grown trading platform is on par with Metatrader 4, which features a subset of currency pairs and higher commissions. That’s unfortunate because neither interface provides all the customization features required by mid- to upper-level account holders. The broker doesn’t offer UK or Irish spread betting, denying clients the special tax advantages that affords.
Proprietary JForex platforms
iOS and Android synch with desktop
Small product catalog
Higher-than-average trading costs
No two-factor authentication
The broker is licensed in Switzerland through Swiss Financial Market Supervisory Authority (FINMA) and in the EU through Financial and Capital Market Commission of Latvia (FCMC). The Swiss division protects clients up to CHF 100,000 in case of broker default while EU protection is limited to EUR 20,000. They offer no additional layers of coverage through private insurers. ESMA rules dictate negative balance protection but no similar commitment was found in the Swiss fine print. Slippage can be controlled through platform settings, but only on the buy side, and they offer no guaranteed stop-loss protection.
Security features are lacking in the Java-based JForex desktop and web platforms as well as mobile apps, with no two-tier authentication, but the Metatrader desktop does permit one-time passwords (OTPs). Extensive documentation on best execution policies and average spreads builds confidence but disclosures admit the broker’s SWFX ECN acts as a counter party to trades, similar to a dealing desk, raising conflict of interest issues.
The proprietary JForex 3 desktop platform includes hundreds of indicators, advanced charting, historical testing, real-time news and embedded customer support. On the other hand, customization is weak, with no ability to pop out charts or build complex desktops and watch lists. The web version of the Java-based software triggers security warnings in Chrome and other browsers but a standalone version requires no Java installation. The web version is also hampered by a reduced feature set that includes less than 50 indicators. Order types are too basic in all platforms, lacking sophisticated conditional routing found at rival European brokers. Metatrader 4 offers an alternative but lists fewer currency pairs while incurring higher commissions.
JForex mobile versions allow easy synching between platforms with well-organized menus but fewer charting features and limited customization. Order types are too basic, like desktop and web versions, with limited conditional routing. There’s no two-tier authentication, and the broker charges fees if clients process more than 20 SMS message alerts per month. This is a throwback to an earlier Internet era, with little or no justification in 2019.
The unique Dukascopy Connect 911 app allows to clients to manage accounts, access community content that’s also available at the website and chat with support. The app is hampered by large quantities of non-financial content that include an anonymous dating function, distracting clients seeking quick answers to market, platform or account-related issues.
The broker offers comprehensive research materials written or streamed by knowledgeable in-house analysts, frequently updated at the web site and within the mobile apps. The impressive Dukascopy TV features hundreds of timely video clips as well as a comprehensive archive, well-organized menus and a dedicated search function. Clients can download tick data, review social sentiment, read news culled through complex content filters and examine dozens of fundamentally or technically-oriented trading ideas. Materials are well-organized but can be overwhelming, raising the need for a single launch page rather than numerous sub menus.
The site contains no dedicated educational section, with the majority of tutorial materials embedded within research content, FAQs or video sections. It’s possible to find that information by hunting and pecking through multiple topics, but the experience is likely to be frustrating for newer traders seeking to build skill sets. Meanwhile, product sections and trading platforms point to limited “how-to” articles and videos about forex, CFD, index and cryptocurrency trading venues.
Traders can execute automated and algo strategies through JForex and FIX APIs. Platforms permit hedging while both JForex and Metatrader support historical back testing. The broker offers no local VPS but Metatrader users can access their hosting program for a monthly fee. Active traders, professionals and institutions can access a suite of products that support direct-market access (DMA) and more advanced charting programs.
The SWFX Sentiment Index compiles buy and sell information on orders passing through the ECN but the JForex platforms do not support social or copy trading, forcing clients to work with Metatrader Expert Advisors or hook up an API. A comprehensive community site is mostly focused on leisure and other non-market topics, making it harder for serious-minded traders to gauge customer sentiment, build skill levels or develop new strategies.
Dukascopy Bank provides a relatively small product catalog, with 61 currency pairs, 500 plus share CFDs, 24 index, bond and commodity CFDs and two cryptocurrency CFDs. Forex is traded only through CFDs and the broker offers no futures contracts, forward contracts, spot markets or options coverage. Orders are routed through the SWFX ECN whenever possible, with that venue accessing multiple liquidity providers through a central marketplace. Although the ECN is designed to avoid conflicts of interest, the fine print states the venue acts as a counter party.
Commissions and Fees
Commissions and spreads are calculated through a declining tier system, with clients categorized by monthly trading volume, net deposit or bottom-line equity. Dukascopy Bank bases segmentation on the highest of the three values in case of a conflict. Commission costs are clearly documented next to each tier on a trading fees page, but finding average spreads requires a review of daily, monthly or quarterly SWFX execution data through a widget. That information should be also documented on the trading fees page because it can represent a healthy reduction in transaction costs.
The broker charges a $20 fee in addition to possible bank or credit card charges for withdrawals, one of the highest among European brokers. Withdrawal fees are disclosed on a fee schedule page that’s separate from the trading fees disclosure. Withdrawal procedures are buried within a supplementary Wiki, which lowers trust levels because it fails to disclose the fee or how long it takes for clients to receive funds.
The broker provides standard 24/5 support through local or toll-free phone, as well as live chat that can be accessed by prospective or active clients. Questions can also be sent via online message function or e-mail. Three chat inquiries at different times of day were answered promptly. They maintain active social media portals as well as a dedicated support forum for JForex and automated trading. Curiously, the web-based forum isn’t linked directly on the web site, forcing a trader to use the search function or access it through the trading platform.
What You Need to Know
Dukascopy Bank offers a great fit for market professionals and high volume traders, with extensive research materials and an excellent discount program to bring bottom-line costs in line with more competitive European brokerages. However, the smaller-than-average product catalog isn’t likely to suit all trading styles. Higher-than-average trading costs could undermine new and small-sized retail account holders, who may have to look elsewhere for build skill levels due to weak educational resources. Even so, smaller traders with growing accounts may wish to stick around, due to the robust community and generous upgrade path to lower costs.
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