When you regularly use a particular forex trading platform you tend to run into some problems which are the result of your broker causing the forex price to move in the opposite direction of the trade you make. For example let us assume you opened a forex trade and then set a stop loss and the profit level at which you would like to exit the trade. You will find more often than not the price tends to move in a direction not anticipated by you. Generally it could be the result of a natural outcome. But some brokers simply let the price run in the direction of the stop loss. The result is you could loose the trade. This could happen only if the broker you deal with is the type that makes money on the spread. But then most brokers make money on the spread. Where does that leave you? Look out for a broker who doesn’t operate on the width of the spreads. Admittedly there are very few brokers that operate that way. But the fact remains that they exist. Dukascopy is one such broker.
The brokers that operate differently like Dukascopy are the ones that make their money from a commission that is charged per trade. Ideally this is the type of broker you should deal with (but these type of brokers are few), and not one that makes money on the spread, because what if the spreads widen too much? These are ECN (Electronic Communication Network) type of brokers, and Dukascopy for example is an ECN broker in the form of a limited company based in Geneva, Switzerland with share capital of CHF 22 million.
Although Dukascopy launched its forex trading platform in 1999 it was only in 2004 that it became a full-fledged Swiss Brokerage House through the creation of Dukascopy (Suisse) SA which is located in Switzerland and is in conformity to Swiss laws. For example Dukascopy is regulated by ARIF, which is a self regulatory body recognized by the Federal Finance Administration in Switzerland and exercises controls in the area of money laundering.
Surprisingly Dukascopy is headed by a physicist Dr. Andre Duka, and the entire operational structure of the company is well-laid out on their website. The Dukascopy site is accessible in eight different languages namely English, Spanish, Russian, Japanese, German, French, Arabic, and Chinese,
In 2006 Dukascopy (Suisse) SA launched the SWFX Swiss FX Marketplace through which it offers direct access to the Swiss Foreign Exchange Marketplace. You got to remember that this marketplace is the largest pool of interbank spot forex liquidity available for professional traders and institutions worldwide.
Dukascopy combines access to the Swiss Foreign Exchange Marketplace with an enhanced trading platform coupled with strong banking partnerships it has put in place. For example, Dukascopy – SWFX Swiss FX Marketplace (Dukascopy’s proprietary technological solution and registered trademark) continues to set industry standards in forex trading, especially for large players. Why is that so?
For each trade executed over the Dukascopy Trading Platform, SWFX – Swiss Forex Marketplace, there are offsetting over-the-counter transactions: between the buyer and Dukascopy as the seller, and transactions between the seller and Dukascopy as the buyer. This is a unique way of ensuring the genuineness of the forex transactions conducted over the Dukascopy trading platform.
The trading type is ECN which means Electronic Communications Network. 19 currency pairs can be traded and you could do hedging as well, but there is no provision for trading in precious metals and oil. The minimum deposit is $ 50,000 and the minimum trade size is $100000, and the leverage offered is only 100:1. You will not find any fixed spreads with Dukascopy, but only variable spreads. The spread on majors is 0.5 to 1 pips. But the spread will sometimes get as high as 4 pips for GBP/USD.
You are given interest on unused balance in your account and there is no facility for Islamic swap free accounts. You can only deposit money through wire transfer and not through PayPal or credit card.
Setting up a demo account with Dukascopy is easy .You can choose to run either Java or Web-based software platforms of Dukascopy and that’s your choice. The demo is good and comes along with a good PDF tutorial. For starting a real account you will have to download the application, fill it up and mail the documents direct to Dukascopy. For the documentation part, what they ask you normally is a certified copy of your passport or any utility bill showing your residential address.
Once you have set up a real account and funded it, get ready to trade with low spreads, slippage control, real time tick charts, and great customer service whenever you need it.
But remember Dukascopy will charge you a commission at the rate of $20 USD per one million USD traded.
Since Dukascopy is meant for the most serious forex trader with large capital it is a certainty that some of them would prefer Dukascopy Managed Accounts. These managed accounts are handled by professional traders with years of experience in institutional foreign exchange trading. These large managed accounts can even be funded by bank guarantee, and Letter of Credit. If you have a managed account, then you will be charged an additional commission of $20 USD per one million USD traded.
The Dukascopy trading platform is a MetaTrader 4 platform that gives you absolute control over the order execution process and that’s why traders with large capital prefer it. For example clients could trade billions of dollars in an absolutely secure “one-click” trading environment. This platform has the facility of trailing stops but remember you cannot do mobile trading.
Dukascopy platform gives you full depth of the market in terms of real time interbank rates. Besides you have the choice of using either the Web or Java Platform versions. You get the usual limit orders, take profit and stop loss features, plus added slippage control. You could even do hedging, and you always have 24/6 access to the Trade Desk Support. Other features include advanced charting, technical analysis, and streaming news from different sources.
One of the important features of this platform is the fact that it is designed to operate efficiently even with higher lot sizes say over 5 million for instance.
Trader support is one of the excellent features of Dukascopy. For example they have an emergency phone line through which you could connect with them during trading hours. Live chat facility is available. In other words, support is provided by a 24/6 trading desk if clients need to get their doubts on trading cleared. Skype connection is an available option.
There are hardly any advertisements in the site and therefore you don’t get distracted, and so you could easily get whatever information you were looking for. This site is certainly designed for the most discerning forex trader.
Dukascopy have a good platform with good features to protect the clients, they provide good service and they have enough liquidity.
They have low spreads and great slippage control too.
They are well regulated within the Swiss legal system and opening an account is not very cumbersome although it takes a reasonable period of time.
The real account provides the same performance as demo account, and that would mean no surprises when switching from demo to real account.
Outstanding customer support is the key to their functioning.
Since you need a minimum of $50,000 to open a trading account with them, it may unfortunately shut many people out from the experience of trading with Dukascopy. In other words there is no service for small retail clients
The platform does not have enough exotic currency crosses for traders interested in currency crosses.
Another negative is they only allow 100:1 leverage.
On the whole, Dukascopy is one of the most reliable brokers around in terms of execution speed, slippage, and spreads. It is worth remembering that a broker with some of these on the good side is probably a good broker to be dealing with.
Perhaps Dukascopy is the right broker for you if you intend to invest a large capital in forex trading. The vital point to remember is, if you have a good ECN broker, and if they in turn have many liquidity providers, then you could be rest assured of getting the smallest spreads and the best fills on your orders. That’s what forex trading is all about.