XTB Online Trading (XTB) Review 2020

Founded in 2002 as Poland's first leveraged foreign exchange brokerage house, X-Trade morphed into X-Trade Brokers in 2004 to comply with new Polish regulations. It then rebranded to its current incarnation, XTB Online Trading (XTB), in 2009 and went public, listing on the Warsaw Stock Exchange in 2016 under the ticker symbol XTB.

XTB has been steadily making inroads into the highly competitive and ever-changing online brokerage landscape and currently provides access to a variety of markets such as forex, shares, indices, metals, commodities and even cryptocurrencies. The company is regulated in the U.K. and registered with the Financial Conduct Authority (FCA #522157) as well as the Polish Financial Supervision Authority (KNF). Like many forex brokers, XTB does not accept U.S. traders.

XTB's flagship platform is a web-based offering named "xStation 5." This, coupled with the ubiquitous MT4 (downloadable) platform and a functional mobile application, comprises XTB's entire online offering to the consumer. While ancillary costs were on par with industry standards, XTB's consistently lower spreads were hard to ignore as they clearly separated it from the competition. Investopedia's ranking algorithm factored this in when recognizing XTB's appeal to cost-conscious traders.

Who XTB Online Trading (XTB) Is For

XTB is a solid choice for traders that want to minimize their costs, whether it be the inherent cost of placing a trade (bid/ask spread) or not having to be burdened with extraneous costs, such as wire fees. XTB offers maximum leverage of up to 500:1 for non-U.K. accounts while U.K. accounts get up to 30:1 leverage. The firm places an emphasis on customer support and offers relevant educational tools and research amenities that would be well-suited to a novice trader. This company is ranked as the winner of Investopedia's Best Forex Broker for Low Costs.

Pros Explained

• XTB advertises minimum FX spreads of 0.5, and no commission, for "Standard" accounts, and 0.1, with commission, for "Pro" accounts. This is, by far, the best in the retail FX brokerage space.
• XTB Online Trading (XTB) is regulated by the Financial Conduct Authority (FCA #522157) which is one of the main regulatory agencies in the U.K. and is highly regarded globally for being strict in ensuring that market practices are fair for both individuals and businesses. Simply put, being regulated by a reputable government-backed agency goes a long way towards establishing the credibility of a firm. Traders accept the risk that is inherent in markets but they would like the peace of mind knowing that their funds are not subject to risks outside of the ones that they are taking, such as counter-party risk.
• XTB offers "negative balance protection" which has become a fairly important feature that most online brokers are offering these days. The catalyst was most likely the SNB event of January 15, 2015 that roiled the markets, especially the highly leveraged retail FX market.
• XTB places an emphasis on customer service which includes 24/5 telephone support with a dedicated account manager and live chat facility. Being able to readily contact a broker is crucial for anyone engaged in the arena of online trading.

Cons Explained

• XTB does not accept U.S. clients due to regulatory constraints, which precludes it from truly being considered a global broker. This would be a red flag were it not for the fact that the company is regulated by the FCA which, along with U.S. regulatory agencies (NFA, CFTC), is widely considered to be the preeminent regulatory body.
• XTB charges commissions for both cryptocurrency (Pro) and stock CFD (Standard and Pro) transactions, and these are not as advantageous to the client.
• XTB does not offer guaranteed stop losses (GSLO) making it one of the few prominent forex brokers not to do so. GSLOs protect the trader from market gap risk and many brokers are willing to offer it (for an additional charge) and accept the risk themselves.
• XTB's xStation 5 is not equipped with back-testing or automated trading capabilities, leaving MT4 as the only alternative for algorithmic traders.

Costs

The totality of XTB's fee and cost structure is competitive within the online forex brokerage arena. What sets XTB apart is its advertised minimum FX spreads for the different account structures. XTB's "Standard" account quotes a minimum spread of 0.5, while its "Pro" account offers a minimum spread of 0.1. There is, however, a commission of $3.50/lot added for trades on Pro accounts. In retail FX parlance, it is generally understood that one standard lot is 100,000 units of the base currency, so this would translate to a minimum spread of 0.45, still among the best in the industry.

XTB states that "the average spread on EUR/USD for the last quarter was 0.43 (Pro accounts) and 1.02 (Standard accounts)." The 0.43 is the average spread before commission was added, so the actual average EUR/USD spread for Pro accounts would have been 0.78 which, again, is among the best in the online forex brokerage industry, if not the best. XTB charges commissions for cryptocurrency (Pro) and stock CFD (Standard and Pro) transactions, as well.

XTB does charge an inactivity fee of €10 if there is "no opening or closing of the position on the Customer’s account within the last 365 days and no cash deposit within the last 90 days." There are also fees for client withdrawals of less than a specified amount from their cash account, a percentage charge for withdrawal to a credit card, and percentage charges for using e-commerce sites (Skrill, Neteller, SafetyPay). There are, however, no costs for incoming or outgoing wire transfers or for closing an account.

XTB does not have a minimum deposit requirement for customers wishing to open a live account, but logic dictates that this amount will be subject to the margin requirements of the smallest trade size that the customer wishes to place. International clients with high account balances are eligible for cashback rebates and welcome bonuses while high-volume-trading U.K. clients are offered lower spreads.

Trade Experience

xStation 5, XTB's custom trading application, is a streamlined trading platform that is stable and easy to access from any browser (Chrome, Firefox, Safari, or Internet Explorer). User interface is fairly standard with a simplicity that enhances its appeal. It isn't the most feature-rich platform, but its ease of use somehow makes it appear more functional than it actually is.

This is the company's flagship offering and provides an updated look and feel, one-click trading, and full integration across desktop and mobile platforms that should serve traders well. Entering trades, building watchlists and modifying charts all seem simple and intuitive. FAQs and educational resources can also be launched from within the trading application. Traders receive notifications directly on the platform or mobile application.

That being said, there were downsides. The ability to create custom indicators was not an option. Of course, XTB does offer the standard MetaTrader4 platform, which does have this and other features for traders already familiar with the third-party application.

xStation 5 has three basic order types with the option of attaching "take profit" and/or "stop loss" orders to them. Additionally, the trader can choose to make the regular stop loss a trailing stop loss prior to, or after, execution of a trade.

• Market - The simplest order where a trader signals that their trade request should be executed at the prevailing market rate.
• Limit - A pending order where the entry is at a predetermined point below or above the prevailing market rate depending on whether it's a buy or sell. The trader also has the option of selecting the expiration time of this order.
• Stop - A pending order where the entry is at a predetermined point above or below the prevailing market rate depending on whether it's a buy or sell. The trader also has the option of selecting the expiration time of this order.

The mobile version of xStation 5 includes most of the functionality available in the desktop application, except the ability to set price alerts, which seemed like a peculiar oversight. Traders can access XTB's trading instruments, complex order types, account details, and charting from the Android or iPhone apps. A streaming news feed is also available on the mobile application.

XTB does not offer social (or "copy") trading, money manager accounts, or a free VPS service. However, there were a few unique offerings that may be worth a second look by some traders. The inclusion of "market sentiment," "top movers," "stock scanner," and "heat map" tools is impressive.

XTB does not offer ready-made products for back-testing, though clients can create their own back-testing applications as XTB offers an open API both for MT4 and xStation. XTB uses smart-order routing for equities and equity CFDs. However, XTB does not act as a direct member of any exchange as it executes all trades via a third-party broker.

Range of Offerings

XTB provides access to a broad selection of financial instruments across a wide range of different asset classes. The product catalog includes:

• 48 currency pairs
• Over 20 global indexes
• Major commodities
• More than 1,500 global stock CFDs
• 60 ETF and cryptocurrency CFDs

Where the range of offerings does fall short is the lack of spread betting instruments. XTB offers maximum leverage of up to 500:1 for non-U.K. accounts while U.K. accounts get up to 30:1 leverage.

Customer Service

In this day and age, an online broker that does not place a high priority on addressing the needs of its customer in an efficient and satisfactory manner may be doomed to failure. XTB is well aware of this. Contact options cover all the bases, with email for clients and prospective clients, 24/5 local phone support, and a live chat facility. Additionally, clients are assigned an account manager to assist them with relevant account-related matters.

Phone support is responsive but the chat experience is a bit more erratic. It isn't uncommon, for example, for live chat requests to be redirected to an email form instead. In the end, though, functional support is rendered. A phone number is easily available on xStation 5 and chat support can be launched from the trading platform, which is very convenient. Online customer support is available in several languages, which enhances XTB's appeal to a broader client base. The broker also runs satellite offices to support licensed operations in several regions.

Education

XTB's educational offerings are on par with the industry standard. That said, it is apparent that the firm has identified this as a priority. The "courses" are divided into four categories—basic, intermediate, expert, and premium—though users can only access the first two through the website. "Premium" courses can be accessed free of charge on the xStation 5 platform, but one will have to sign up for an account (demo / live). The "expert" category has yet to be populated.

Each course includes both basic-level videos and articles. The material does not deviate from the industry norm of providing basic education on forex and CFD markets. Topics included: fundamental and technical analysis, risk management, and macroeconomics. New investors will find some helpful background information, but relying solely on XTB's education to become proficient in the markets is unlikely. That said, the material covers all the major topics that a beginner should need to know.

Outside experts are also used for a few advanced topics and strategy updates, mainly in the free "premium" supplemental education section. Most of the content is well organized in a familiar lesson structure with videos and quizzes. XTB's academy course design is ambitious in that it intends to cover material for people at different stages of the trading spectrum, but as of this review that is still a work in progress.

Portfolio Analysis

Placing a trade on xStation 5 is simple and intuitive. The order ticket is limited to initiating basic market and pending orders with provisions for "stop loss" and "take profit" orders. The trader also has the option of making the stop loss a trailing stop loss, should they so desire. XTB does not provide a trading journal nor do they provide tax accounting tools on the platform.

The client chooses the trade size and the order ticket populates with pertinent information, such as the contract value (in either EUR or GBP), margin required (GBP), spread cost, commission (if any), pip value, and swap costs.

Unlike some competitors' platforms, xStation 5 does not have a built-in tool for analyzing trading activity. This omission dropped them into the lower-ranking tier for this category, as the ability to drill down into one's trading activity beyond the basic metrics can be invaluable to all traders.

Research Amenities

XTB's research amenities are above industry standard. Aside from a standard economic calendar that is intuitive and filterable, XTB offers a functional news feed that can be filtered by "instrument," "trading signal," "economic reports" (fundamental), and "technical analysis."

Additionally, there is a market analysis tab that is comprised of filterable "market sentiment," "top movers," "stock scanner," and "heat map" sections. This is, by far, the most impressive aspect of XTB's analytical tool offerings. Each section is well designed and includes some actionable, or at the very least interesting, information that can add value for traders.

Security

• XTB U.K. is regulated by the Financial Conduct Authority under license number 522157.
• XTB Europe is regulated by CySEC under license number 169/12 as of 2018.
• XTB International is regulated by the Belize International Financial Services Commission under license number IFSC/60/413/TS/19.
• X-Trade Brokers DM SA is authorized by the Polish Securities and Exchange Commission under license number DDM-M-4021-57-1/2005 and supervised by the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego).
• XTB Spain is regulated by the Comisión Nacional del Mercado de Valores under license number 40.
• XTB South Africa is awaiting license approval as of this review.

XTB offers negative balance protection, which is mandated under ESMA rules that went into effect in 2018, but no guaranteed stop loss orders (GSLO). XTB does not have two-factor authentication (2FA) but does offer bio-metric authentication for its mobile application, and requires that passwords include upper/lower case letters, numbers, and characters. While XTB does not have 2FA for its platform mobile offerings, it does offer 2FA for key client office processes such as personal or bank data changes.

Verdict

XTB Online Trading (XTB) offers potential clients many of the tools that are needed to be successful in the online trading arena. What it does better than anyone else is offering clients the lowest forex spread cost in the industry. The costs (spread + commissions) for the other product offerings are more in line with the industry. xStation 5, while limited, is intuitive and functional, and certain features, such as the instrument scanner and heat map, heighten its appeal to any type of trader.

Being FCA regulated lends credibility while negative balance protection gives clients peace of mind. Customer service is slightly above average and the education catalog is adequate. MT4 offers "expert advisors," back-testing, and auto-trading for the more technologically advanced trader. Overall, XTB Online Trading (XTB) is best suited for cost conscious clients wishing to engage in trading the retail foreign exchange markets.