IC Markets leverage spread

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IC Markets Leverage Spread Comparison

IC Markets offer the highest leverage level of up to 500:1 from its offshore FSA regulatory division in the Seychelles. This leverage varies across the broker’s 65 currency pairs and other CFDs (such as cryptocurrencies). The brokers offshore branch offers the following leverage:

  • Forex, gold and commodities 500:1
  • Indices, futures and bonds 200:1
  • Shares 20:1
  • Cryptocurrency 5:1

If you sign up to the brokers Australian branch regulated by ASIC,  or trade through the CySEC branch, the maximum leverage is significantly lower:

  • Major forex pairs 30:1
  • Minor forex pairs 20:1
  • Gold and major indices = 20:1
  • Other commodities, futures and minor indices = 10:1
  • Shares (stocks) and bonds 5:1
  • Cryptocurrencies = 2:1

So What Is Leverage?

Leverage is effectively the amount a forex broker allows a trader to borrow when trading CFDs and forex. It’s a multiple of the deposit so for the maximum of 500:1 leverage this means you can trade up to 500 times the initial capital. For example, a $200 deposit can lead to $100,000 worth of currency being traded on currency markets.

Forex Trading Leverage Example:

  • A trader has a $100 deposit and selects leverage of 100:1 for the AUD/USD pairing.
  • The markets move in the trader’s favour by 0.4% and the position is closed
  • The trader will make $100 * 100 * 0.004
  • The total profit is $400 (or 40%)

Why Is High Leverage Important?

Currency markets normally have relatively small movements each day compared to other financial products. If you use a conventional forex exchange service (eg purchasing USD currency) the returns would be normally very modest. To amplify these movements, leverage is offered to retail traders to make it easy to make a profit (or loss) from smaller price movements.

High leverage is particularly suited for forex traders who have a high-risk tolerance when scalping or using expert advisors, or trade currency pairings with low volatility (or during a low volatility period). The high risk of losing funds means that lower leverage may be more suited to certain traders like beginners.

Risk Management Tools

As IC Markets provide the highest leverage of 500:1 offshore, it is important to manage the high risk of forex trading. High leverage is ideal for retail traders with a high-risk appetite or those using third-party tools such as expert advisors, while beginners should be cautious.

While high leverage can magnify returns, all levels of trading experience can utilise IC Markets risk management tools to reduce the high risk of losing money.

1) Guaranteed Stop-Loss Orders

A guaranteed stop-loss order such as that offered by Plus500 is when you can pre-set the maximum amount your willing to lose on an individual trade. Regardless of market conditions, this predetermined entry or exit price selected is guaranteed with no chance of slippage.

This differs from icmarkets.com stop-loss order facility, which allows a trader to set the maximum loss. But in high volatility environments, losses may exceed this amount.

>>> IC Markets MT5 review explained

2) Negative Balance Protection

IC Markets provide an advanced margin call facility that detects when a trader is approaching a $0 balance and exits the trader automatically. The key issue is that in extreme market events (i.e. the floating of the Swiss Franc) this software may not have the ability to exit the market fast. This can lead to losses exceeding deposits, and the Australian forex broker may request for the outstanding debt to be paid.

Overall, IC is an ECN-style broker which means faster execution speeds and lower spreads, yet does not offer the extensive risk management features that market maker brokers offer. You can view our comparison with easyMarkets to compare an ECN broker vs market maker broker.

Customer Support Levels

IC offers 24/7 customer support via a range of contact methods. Local customer support is available from their Sydney office at Level 6 309 Kent Street Sydney, NSW 2000. CFD traders can reach them through different channels like email, Skype or by phone. Their Sydney response time is within 15 minutes based on our enquiries with the most complex issues solved within a day.

Live chat customer service is also offered by the CFD provider. The company is dedicated to providing a high quality educational centre (video journals and articles) that is great for those who have no previous knowledge in trading forex and CFDs. Pepperstone is one of the few fx brokers that has won more awards for customer support than IC Markets.

Research

IC offers various research tools and support when forex trading, including:

  • A blog offering fundamental and technical analysis
  • Content from 3rd parties including Trading Central
  • An economic calendar
  • Myfxbook news headlines
  • ZuluTrade social copy trading
  • FX Blue LLP Advanced Trading Tools

Outside of these features, our IC Markets review found the forex broker doesn’t offer advanced research features such as new headlines and pattern-recognition tools.

>>> How to open IC Markers account

>>> User Guide IC Markets

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