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Axitrader

Axitrader Review

By: AxiCorp Financial Services Pty Ltd

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Detailed Review

We have all heard about the forex exchange market (Forex). It determines the foreign exchange rates as it is a global marketplace for trading currencies.

Let us take an example, John is traveling from the USA to Canada, and he plans to spend $1000. He exchanges his cash at a rate of USD/CAD 1.31425. What if the conversion took place the next day when the rate becomes USD/CAD 1.35739? He would have acquired more Canadian dollars.

This is a basic scenario, let us imagine the massive effect of the exchange rates on an MNC dealing with salaries of thousands of its employees. Of course, they will consider making the payout at a time when the rates are convenient for them.

Pros

  • AxiTrader is regulated by ASIC and FCA.
  • They allow traders to easily open digital accounts, which can be a demo or live (Standard or Pro).
  • They do not impose minimum deposits, at least outside of Australia.
  • AxiTrader does not charge inactivity fees on the trader's account. Also, they offer zero withdrawal and deposit fees.
  • They have CFDs offering of cryptocurrencies.
  • They have a 30 days demo account, which allows a new trader to experience real-world forex trading.
  • The MT4 platform is favorite among forex traders.

Cons

  • They offer a limited range of CFDs as compared to other retail brokers.
  • AxiTrader provides no bonus, loyalty programs, or other benefits for the clients who open an account with them.

Introduction

The forex and stock market are both financial instruments, and they have elements of risk. However, stock trading takes place at a stock exchange, e.g., New York Stock Exchange (NYSE).

As for the forex exchange, it is an over the counter market. It is the largest in the world, too, with a daily turnover of $6.6 trillion in April 2019, as per the reports from the Triennial Central Bank Survey.

To enter the stock market, the trader needs to have significant capital. Whereas, it is easier to enter the forex market because it utilizes leverage (AxiTrader offers up to 500:1 leverage.)

Currency pairs in the forex industry are also more liquid than any other financial instrument. The stock dealer receives commissions while the forex brokers will earn a spread (some charge commission too.)

The brokers gain through the spreads due to the difference between the bid and the ask prices. A bid is the highest price at which the broker is willing to buy the base currency and ask is the lowest price for selling it.

Thus, for the trader, the bid price is the price the trader gets for selling a currency, and ask is the price he/she pays for buying a currency. Consistently, the bid remains less than the ask price.

Apart from that, there are 3 FX markets globally, including New York, London, and Tokyo. It is in operation 24/7, except for weekends or holidays.

Axitrader is an Electronic Communications Network (ECN) foreign exchange broker. It started in 2007, with headquarters in Australia. Their logo goes as “founded by traders for traders.”

Who utilizes their services? For the new traders, there is a demo account which acts as a guide to the real-life scenario using the MetaTrader4 (MT4) trading terminal or through their website.

Then the live account is suitable for day traders (buying/selling within the same day), swing (short term trading period), or carry (which is a currency trading strategy.)

Any other trader willing to plunge into the forex market can sign up with AxiTrader and start trading. AxiTrader, AxiPrime, and AxiSelect are all a part of AxiCorp Financial Services Pty Ltd.

They have products such as Forex and commodities & indices, which we will look in detail later on. Forex traders need to come up with strategies to exercise transactions and also consider the risks associated with the market.

Understanding the risk and rewards in Forex

We all know that any kind of investment is risky, hence crucial for the traders to make prudent decisions. To become a successful forex trader, the person needs to develop the correct psychology.

Forex deals with currency exchange, but AxiTrader deals with CFDs and Margin FX, which are leveraged products.

What is the leverage? It is a debt, a type of borrowed capital. If a trader seeks to invest more but lacks the fund, such financial instruments come to their rescue.

However, all that glitters is not gold. The intention is to get high returns, but what about the loss? Both face the same fate; the investment may result in a profit or greater debts.

We can see from the image that the website provides words of warning to all its users regarding the investment risks involved in over-the-counter derivatives.

The homepage has 3 sections, namely traders, partners & institutional and market news &blog.  They have dedicated a section for education, with the divisions of basics, online training, and trading resources.

So, is it safe to use the platform for forex trading? It is not a publicly listed company, but on the bright side, its liquidity providers include combinations of top tier 1 banks and brokerages (average-risk.)

Tier 1 liquidity provider acts as a market maker as they purchase and also sell the forex commodity. They are also capable of extending tightest spreads, hence reduced the cost for the traders.

AxiTrader provides financial services, registered by the Financial Services Authority of Saint Vincent and the Grenadines and has an AFS license.

AxiTrader is regulated by bodies such as the Australian Securities and Investments Commission (ASIC) and The Financial Conduct Authority (FCA) in the UK.

They provide deep liquidity due to the high participation of many international market players. It leads to an increase in the transaction volume.

We have banks (commercial, investment), hedge funds, retail traders, market makers, speculators, and others being an integral part of the forex market.

Currency trading

When we hear the word Forex, all we can think about is money exchange, and that is what it is! AxiTrader provides currency trading with over 80 different currency pairs.

The currencies are always denominated using the ISO 4217 currency code. The USD tops the list as the economy is massive, and thus many products are traded using their currency.

Interestingly, the major currency pairs are the most traded, and all of them include the USD. These are EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF, NZD/USD, USD/CAD, etc.

Then there are cross pairs that do not include USD, and they are GBP/JPY or JPY/CAD. We also have a combination of a major currency and that of a developing economy, for example, USD/ZAR or USD/HKD.

We write a currency pair like EUR/USD 1.1050, with EUR being base and USD called the quote currency. It implies that 1 EUR will buy you 1.1050 USD.

The traders speculate on the currency price movement in the market. They decide to buy the pair through the brokers when they expect the base currency to rise in value relative to the quote currency.

In case the base currency depreciates, then the trader takes a short position (sells the base currency and buys quote).

These values keep fluctuating, and the change between the currency pair is expressed using point in percentage (PIP.) Most of the exchange rates have 4 decimal places, except for Japanese yen.

We take our example of EUR/USD and say that the value of 1.1050 moves to 1.1051. The last decimal place changed by 0.0001; hence, we pronounce it as a rise in value by one PIP.

It helps one is establishing the spread, which we get when we take the ask price and subtract the bid price of a currency pair. Of course, the total spread will depend on the number of lots traded.

A low spread is desirable as it interprets low volatility (steady prices) and high liquidity (assets accessible for investing) in the market. It is also high returns for a trader as the broker will not get a big bite out of the transaction.

Let us take an example of EUR/USD with a hypothetical quote of 1.1153/1.1158. The spread will be 0.0005 or 5 pips. Below is the live spreads which display AxiTraders spread against its competitors.

AxiTrader allows one to trade with a minimal size of 0.01 lots, and it indicates the amount of money one would allocate per pip. Depending on the currency pair, the volume of 1.00 lots represents $10 per pip.

Axitrader provides up to 500:1 leverage. What does it mean? It means for every $1 in your account; you can borrow $500. Hence, if you had $1000, then you can trade with a leveraged amount of $500 000.

The broker sets the percentage of the margin (amount required to hold in one’s account) as there are risks involved in the transaction.

If you hold your position, then the trade shall remain open. Otherwise, it will be closed to stop further losses.

There are long and short positions. If one expects the value to increase, then they can opt to remain in a long position (buy). In case the opposite is exact, then one calls for a short/sold position.

Types of order

In forex trading, orders represent how one enters or exits forex transactions. It enables one to enter into a trading position as well in reducing the risk of loss.

A trader needs to come up with strategies to conduct beneficial trading. Knowledge of the different kinds of orders ensures the trader to use the correct one to achieve trading goals.

The market order is the most basic, and it occurs when the trader wishes to enter into the position immediately. Thus, the broker is told to buy/sell the security at the current price.

The limit order occurs when the broker either sells above the market price or buys below market price. The stop orders aim to minimize the loss in a particular transaction.

The trader informs the broker to sell or buy the security once it hits a specific price. It is a sufficient strategy for traders who are unable to monitor the trends for a particular reason.

Trailing stop order is triggered when the market moves against the predefined number of pips set by the trader. It allows you to close your position once the market hits the trailing stop price.

There are various other kinds of orders such as good ’till canceled, good for the day, one triggers the other, if/then and many more.

The experienced traders can play around with various order types; however, the new traders need to be cautious. They need to understand the broker's order entry system too.

The trader also needs to figure out additional order information such as rollover fees when the position gets to hold for more extended periods.

The rollover rate refers to the net interest earned while holding the position overnight. It is interchangeable with the swap rate, which is the differential interest rates between a currency pair.

Let us now find out what else AxiTrader has to offer for trading apart from the forex exchange.

Trading of CFD

The contract for difference (CFD) is a contract that establishes the exchange of a financial instrument based on the difference between prices during the time of opening and closing of the agreement.

The mechanism is similar to forex exchange; the trader purchases the CFDs when they speculate a rise in the prices and sell it when they expect a fall.

There is no physical market; its operation is electronically and over the counter with a network of banks and other institutions.

The trader does not have ownership in both the instruments, as they only speculate the changes in the prices to benefit from it.

The contracts also have long and short positions, and the profit and loss get established by the difference in the pricing multiplied by the number of CFDs.

However, forex deals with currency only, whereas CFD involves various types of contracts related to energy, metals, indices, etc. AxiTrader offers shares, commodities, and index CFDs.

Commodities include gold, silver, and oil trading. The indices include the stock market, and the top ones are available for trading, e.g., FTSE, Dow Jones, and S&P.

Cryptocurrencies are also a part of AxiTrader CFDs, and they offer Bitcoin (BTCUSD) with a trade size of a minimum of 1 Lot and a maximum of 10.

The trading takes place via the MT4 platform, and it involves low margins, tight spreads, and flexible leverage. Hence the trader can exercise control over the risks associated with the contracts.

We are aware of the products offered by AxiTrader, now we venture into their demo account and discuss the MT4 platform.

Getting started with a demo account

The homepage of the platform provides a user with 2 options, either to try a free demo or to open an account.

The free demo lasts for 30 days. It is used by inexperienced traders who need first to understand how the system works before investing real money.

So, what does the demo offer? It allows the user to experience a live trading environment. That is why they provide virtual funds amounting to $50 000.

Furthermore, they avail of the trading terminal of MetaTrader4 (MT4), which is a duplicate of the real forex market environment.

As visible from the above image, we need to go through the 3 steps to create our demo account. We need to fill out the form first, which leads us to a page that displays the next steps in the procedure.

It includes checking the email so that we can retrieve the demo login details, which will make MT4 accessible. They also provide a link to access the trading platform.

One can choose to use the MT4 WebTrader or download the desktop apps for it. It is available for PC, Mac, and mobiles.

Hence, the user can log in and start exploring the MT4. The other way to become a trader using AxiTrader is to signup with their live account.

Creating a live account is also a few steps procedure. It requires the user to fill out the application form, confirm one’s identity electronically, and deposit funds in the account.

The live account has 2 plans; MT4 Standard and MT4 Pro. The standard account is suitable for a retail trader who is new and needs to gain experience.

The pro plan suits the professional traders as it offers a commission of $7 round trip per standard lot (100K units), and there is a difference in spreads as well.

We downloaded the desktop application for testing, and that will be our next point of discussion.

The MT4 desktop application

AxiTrader, as well as many other retail brokers, use MT4 as it widely used in currency trading. It is available for free and compatible with PC, Web, Mac, and Mobile.

We have seen the web version (MT4 WebTrader under the previous heading.) To get the desktop application, we need to download the file, set it up, and log in with the password and username provided by the system.

At first glance, one can get overwhelmed with all the tabs and the information available within the platform. However, we can start exploring it by looking at the navigator.

It appears below the market watch and holds personal account information (multiple account’s name and number).

The navigator displays tools such as indicators, expert advisors, and scripts. Automated trading is possible when one turns on the EAs (expert advisors) feature.

Let us figure out how to place orders using the MT4; the trader is aware of the currency pairs to be traded and the type of order to initiate. AxiTrader also avails the one-click order placement feature.

One can choose to enter into market execution, which opens a trading position at the current prices. The pending orders occur in the future when the market situation meets the pre-defined conditions.

In the above image, we opted to trade EUR/USD and clicked the new order button. The order window displays the related information used in exchanging the currency pair.

The symbol indicates the name of the pair, the volume is the lot size (amount per pip one is willing to invest), and then there is the type of transaction.

We can buy/sell the base currency with the market execution or pending order. All the trading positions entered by the trader appear on the terminal, positioned at the bottom panel.

The terminal has tabs of trade, exposure, account history, news, alert, mailbox, mail, signals, and others. The trade section displays information column-wise with the order number, time, type, size, symbol, price, S/L, T/P, commission, swap, and profit.

Setting up stop loss (S/L) for the manually placed order prevents one from facing severe losses as the position gets closed when rates met the predefined levels.

The Stop Loss, Take Profit, or Trailing Stop orders predictably close or open the position depending on the market price and your predefined level. However, the trader can also manually close a trade.

The option to enter into pending orders has different types of orders, such as buy limit, sell limit, buy stop, and sell stop.

The trader needs to place a price at which the order can get executed. Keep in mind the order can fail if the market conditions do not meet the defined pricing values.

The market watch provides all the offerings of AxiTrader. It includes currency exchange, indices, and commodities.

The trader can enter in a long or short position in any of the instruments and use their knowledge and skills to earn profits from the financial instruments.

Customization of the charts and the templates

The default page of MT4, as we witness earlier, can cause panic as there are charts all over the body of the platform.

However, the trader is allowed to change the chart types and style of display. The window tab on the MT4 lets the trader tile the charts horizontally or vertically.

Charts allow the trader to pick up trends over time as they interpret the history and the current situation of the market.

They are supposed to be uncluttered and refined so that the trader can read and make trading decisions from them.

So how can we modify the charts? MT4 has chart offers of bar, candle, and line charts. Let us start from here, and the widely used chart type is candlestick. It has 4 points, namely open, high, low, and close prices of any financial instrument for a certain period.

Next, we can change the color of the candlesticks, which is done by right-clicking on the chart and accessing properties.

The most common color used in a down candle is red, while the candle moving upwards is green. The red body of the candlestick is when the closing price is below the opening price; the green reflects the opposite.

The thin lines appearing on both upper and lower body are known as shadows representing the highest and lowest prices.

Candlesticks form different patterns used by the trader to make decisions. It includes the hammer, double tops, Doji, morning star, among others.

Apart from the colors, there is a section of common under properties that allow one to select various settings. One can enable/disable gridlines, period separators, volumes, object description, OHLC, etc.

The trader comes up with the chart that suits him/her, and now we can save it as a template. This way, we can apply the same settings on all the other charts we have in our account.

MT4 allows backtesting, whereby historical data over some time is used to gauge the likelihood of a trading strategy in the future.

It is possible after enabling the EA on the platform. There is an option of strategy tester under the view tab on the navigation panel.

To make it better, the trader can install the app on the mobile can use it anytime and anywhere. The Pro plan also offers a Multi-Account Manager (MAM).            

MAM allows the trader to carry out block trading on all the accounts available under the master account.

We can thus comment that AxiTrader has strategized various initiatives to provide better trading services using the MT4 platform.

Analysis & tracking tools (MT4 plugins) and Autochartist

Technical analysis is vital as it enables the trader to predict future trends in pricing after studying historical charts.

The analysis establishes the support and the resistance points, hence enabling traders to determine the correct time and price at which to enter or exit the market.

MT4 and MT5 allow plugins such as Autochartist, which provide automated technical analysis. It thus makes it easy for the trader to view all the trading opportunities available.

The trader receives automatic notifications after its algorithm analyzes the market by recognizing the chart patterns such as Triangles, Wedges, Tops, and Bottoms.

It uses various technical indicators such as the Ichimoku Cloud, Bollinger bands, and Fibonacci retracements.

Autochartist also delivers free market reports via Market Snapshot emails. These highlight the market in the coming 24-48 hours.

AxiTrader permits traders to subscribe to third party Virtual Private Server (VPS), which is a link that connects the trading terminal to a broader network.

It thus facilitates network connectivity and automated trading. The backups provide security against system failures.

Furthermore, one can utilize management tools including, Signal Trader, PsyQuation, Myfxbook, ZuluTrade, Forex Signals, and Tradeworks.

Conclusion

The interested trader can make use of the demo account of AxiTrader before creating a live account. Upon creating a real account, there are no minimum deposits outside Australia or withdrawal fees.

However, the trader needs to fund their account to initiate trading in forex or CFDs. They can use Debit and Credit Cards, Neteller, Skrill/Moneybookers, Global Collect (only for Australian clients), Bank Transfers, and others to fund their accounts.

AxiTrader also allocates a dedicated account manager for its clients. Their customer service is accessible via phone calls, emails, and live chat.

They currently have helplines for 11 countries. They also have an education section that allows traders to learn more about forex and CFDs.

However, they lack live webinars, which many brokers provide to their traders. AxiTrader is available in many countries, but it still doesn’t function in the USA or Canada.

AxiTrader is a respected retail broker platform due to its years of experience. It’s Pro account offers commission, and low average spreads hence attractive.

For a newbie trader, who plans on trading using the recognized MT4 platform, can give AxiTrader a try with their 30 days demo account.

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