DirectFX is the brand name of Direct Capital Market Ltd – a company, registered in St. Vincent and the Grenadines. Direct Capital Market Ltd describes itself as one of the most popular forex brokerage companies. However, we couldn’t find any information about licensing and authorizing, so this is a typical offshore brokerage firm that is not licensed and authorized by any financial body.
DirectFX claims to offer over 70 currency pairs. However, the “markets” section of the website shows only 7 of them. Since there is no option to open a demo account, we could not say for sure how many pairs are available. In addition, you can trade 10 global indices, and 3 commodities (Crude Oil, Brent Oil and Natural Gas) as futures. There is a discrepancy compared to the “Account” section, where shares and metals are also added under “Trading Instruments”.
Clients can open two types of accounts – Standard and Premium. The Standard account requires USD100 to open and offers floating spreads with a minimum value of 1 pip for the EUR/USD pair. All forex trades are free of charge. The Premium account requires a minimum deposit of USD500 and offers fixed spreads, commission free as well. As a non-regulated brokerage company, DirectFX provides up to 1:400 leverage for currency pairs. As we always say, the greater the leverage, the greater the risk of complete loss.
Customers can trade through the MetaTrader 4 (MT4) terminal, which offers one of the most comprehensive charts and analytics packages currently available on the market. This makes it the preferred platform for beginners and professionals. With MetaTrader 4, traders can analyze financial markets, perform advanced trading operations, and run trading robots (Expert Advisors). This terminal is available as an application on GooglePlay store and AppStore, as well as a desktop platform for Windows based PCs.
Unfortunately, DirectFX gives no information regarding the payment options that can be used for depositing and withdrawing. This is another sign to pay special attention to this company, especially if you plan to deal with it.
Let us look at the legal documents the company provides. Under the “Leverage Effect” section of the “Risk Disclosure” document it is written that in case of the market movement against the client’s position he may incur loss in the amount of the original (guaranteed) deposit and additional assets deposited by him for supporting the open positions. The “Client Agreement” file reveals that there are risks of reducing the amount of the client’s funds, including the amount of the margin deposit, up to the total loss of the latter. So, it is not clearly stated whether you are covered by the negative balance protection policy. Nothing is mentioned about the slippage and the stop loss orders. The only clue we can see is the account description where we see that the company uses market execution to fulfill customer orders. This means that they are subject to slippage and stop loss orders are not guaranteed. The last thing we want to share is that DirectFX says nothing about how it executes these orders. Most probably it is the counterparty to each client transaction and acts as a market maker.
We can summarize that DirectFX is a typical offshore company that is not regulated and authorized by any serious financial institution. Although the company may claim that customers’ money is protected, there is no institution to monitor and regulate it. If you want to take the maximum risk, you can do it here with a 1:400 leverage, but keep in mind you may never have a chance to withdraw.